Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jul. 31, 2019 | Sep. 05, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 31, 2019 | |
Entity Registrant Name | ASPEN GROUP, INC. | |
Entity Central Index Key | 0001487198 | |
Current Fiscal Year End Date | --04-30 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 18,914,242 | |
Entity File Number | 001-38175 | |
Entity Incorporation, State or Country Code | DE |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 |
Current assets: | ||
Cash | $ 7,243,580 | $ 9,519,352 |
Restricted cash | 452,021 | 448,400 |
Accounts receivable, net of allowance of $1,484,559 and $1,247,031, respectively | 10,786,265 | 10,656,470 |
Prepaid expenses | 546,767 | 410,745 |
Other receivables | 1,435 | 2,145 |
Total current assets | 19,030,068 | 21,037,112 |
Property and equipment: | ||
Call center equipment | 245,715 | 193,774 |
Computer and office equipment | 330,267 | 327,621 |
Furniture and fixtures | 1,430,349 | 1,381,271 |
Software | 4,765,597 | 4,314,198 |
Total | 6,771,928 | 6,216,864 |
Less accumulated depreciation and amortization | (2,083,277) | (1,825,524) |
Total property and equipment, net | 4,688,651 | 4,391,340 |
Goodwill | 5,011,432 | 5,011,432 |
Intangible assets, net | 8,266,667 | 8,541,667 |
Courseware, net | 145,063 | 161,930 |
Accounts receivable, secured - net of allowance of $625,963 and $625,963, respectively | 45,329 | 45,329 |
Long term contractual accounts receivable | 4,249,969 | 3,085,243 |
Debt issue cost, net | 271,162 | 300,824 |
Right of use lease asset | 7,996,585 | |
Deposits and other assets | 562,594 | 629,626 |
Total assets | 50,267,520 | 43,204,503 |
Current liabilities: | ||
Accounts payable | 1,588,331 | 1,699,221 |
Accrued expenses | 577,755 | 651,418 |
Deferred revenue | 2,681,037 | 2,456,865 |
Refunds due students | 1,591,632 | 1,174,501 |
Deferred rent, current portion | 53,140 | 47,436 |
Convertible notes payable | 50,000 | 50,000 |
Right of use lease liability, current portion | 1,100,411 | |
Other current liabilities | 279,411 | 270,786 |
Total current liabilities | 7,921,717 | 6,350,227 |
Senior secured loan payable, net of discount of $287,626 and $353,328 respectively | 9,712,374 | 9,646,672 |
Right of use lease liability | 7,095,695 | |
Deferred rent | 704,689 | 746,176 |
Total liabilities | 25,434,475 | 16,743,075 |
Commitments and contingencies - see Note 10 | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 1,000,000 shares authorized, 0 issued and outstanding at July 31, 2019 and April 30, 2019 | ||
Common stock, $0.001 par value; 40,000,000 shares authorized 18,913,527 issued and 18,896,443 outstanding at July 31, 2019 18,665,551 issued and 18,648,884 outstanding at April 30, 2019 | 18,914 | 18,666 |
Additional paid-in capital | 69,146,123 | 68,562,727 |
Treasury stock (16,667 shares) | (70,000) | (70,000) |
Accumulated deficit | (44,261,992) | (42,049,965) |
Total stockholders' equity | 24,833,045 | 26,461,428 |
Total liabilities and stockholders' equity | $ 50,267,520 | $ 43,204,503 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 |
Assets | ||
Allowance for doubtful accounts, current accounts receivables | $ 1,484,559 | $ 1,247,031 |
Allowance for doubtful accounts, noncurrent accounts receivables | 625,963 | 625,963 |
Discount senior secured loan payable | $ 287,626 | $ 353,328 |
Stockholders' Equity: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 18,913,527 | 18,665,551 |
Common stock, shares outstanding | 18,896,443 | 18,648,884 |
Treasury stock, shares | 16,667 | 16,667 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Income Statement [Abstract] | ||
Revenues | $ 10,357,982 | $ 7,221,305 |
Operating expenses | ||
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 4,353,058 | 3,752,392 |
General and administrative | 7,037,150 | 5,824,132 |
Depreciation and amortization | 606,574 | 498,105 |
Total operating expenses | 11,996,782 | 10,074,629 |
Operating loss | (1,638,800) | (2,853,324) |
Other income (expense) | ||
Other income | 22,802 | 56,401 |
Interest expense | (423,689) | (40,353) |
Total other income/(expense), net | (400,887) | 16,048 |
Loss before income taxes | (2,039,687) | (2,837,276) |
Income tax expense | 35,595 | |
Net loss | $ (2,075,282) | $ (2,837,276) |
Net loss per share allocable to common stockholders - basic and diluted | $ (0.11) | $ (0.15) |
Weighted average number of common stock outstanding - basic and diluted | 18,733,317 | 18,317,830 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Total |
Balance at Apr. 30, 2018 | $ 18,334 | $ 66,557,005 | $ (70,000) | $ (32,771,748) | $ 33,733,591 |
Balance, shares at Apr. 30, 2018 | 18,333,521 | ||||
Stock-based compensation | 209,976 | 209,976 | |||
Common stock issued for cashless stock options exercised | $ 5 | (5) | |||
Common stock issued for cashless stock options exercised, shares | 5,230 | ||||
Common stock issued for stock options exercised for cash | $ 2 | 7,815 | 7,817 | ||
Common stock issued for stock options exercised for cash, shares | 2,689 | ||||
Purchase of treasury stock, net of broker fees | (7,370,000) | (7,370,000) | |||
Re-sale of treasury stock, net of broker fees | 7,370,000 | 7,370,000 | |||
Fees associated with equity raise | (29,832) | (29,832) | |||
Net loss | (2,837,276) | (2,837,276) | |||
Balance at Jul. 31, 2018 | $ 18,341 | 66,744,959 | (70,000) | (35,609,024) | 31,084,276 |
Balance, shares at Jul. 31, 2018 | 18,341,440 | ||||
Balance at Apr. 30, 2019 | $ 18,666 | 68,562,727 | (70,000) | (42,049,965) | 26,461,428 |
Balance, shares at Apr. 30, 2019 | 18,665,551 | ||||
Stock-based compensation | 498,417 | 498,417 | |||
Common stock issued for cashless stock options exercised | $ 102 | (102) | |||
Common stock issued for cashless stock options exercised, shares | 101,894 | ||||
Common stock issued for stock options exercised for cash | $ 22 | 45,168 | 45,190 | ||
Common stock issued for stock options exercised for cash, shares | 21,876 | ||||
Common stock issued for cashless warrant exercise | $ 19 | (19) | |||
Common stock issued for cashless warrant exercise, shares | 19,403 | ||||
Amortization of warrant based cost | 9,440 | 9,440 | |||
Amortization of restricted stock issued for service | 30,597 | 30,597 | |||
Restricted Stock Issued for Services, subject to vesting | $ 105 | (105) | |||
Restricted Stock Issued for Services, subject to vesting, shares | 104,803 | ||||
Cumulative effect of Adoption of ASC 842 | (136,745) | (136,745) | |||
Net loss | (2,075,282) | (2,075,282) | |||
Balance at Jul. 31, 2019 | $ 18,914 | $ 69,146,123 | $ (70,000) | $ (44,261,992) | $ 24,833,045 |
Balance, shares at Jul. 31, 2019 | 18,913,527 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (2,075,282) | $ (2,837,276) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Bad debt expense | 240,899 | 121,805 |
Depreciation and amortization | 606,574 | 498,105 |
Stock-based compensation | 498,417 | 209,976 |
Warrants issued for services | 9,440 | |
Loss on asset disposition | 20,240 | |
Amortization of debt discounts | 65,702 | |
Amortization of debt issue costs | 29,662 | |
Amortization of prepaid shares for services | 8,285 | |
Non-cash payments to investor relations firm | 30,597 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,535,420) | (1,592,941) |
Prepaid expenses | (136,022) | (229,168) |
Other receivables | 710 | 173,475 |
Other assets | 67,032 | |
Accounts payable | (110,890) | (728,230) |
Accrued expenses | (73,663) | 10,401 |
Deferred rent | (35,783) | 217,433 |
Refunds due students | 417,131 | 302,609 |
Deferred revenue | 224,172 | 430,015 |
Right of use assets, net | 62,776 | |
Other liabilities | 8,625 | 27,301 |
Net cash used in operating activities | (1,685,083) | (3,388,210) |
Cash flows from investing activities: | ||
Purchases of courseware and accreditation | (2,275) | (42,917) |
Purchases of property and equipment | (629,983) | (735,757) |
Net cash used in investing activities | (632,258) | (778,674) |
Cash flows from financing activities: | ||
Disbursements for equity offering costs | (29,832) | |
Proceeds of stock options exercised and warrants exercised | 45,190 | 7,817 |
Purchase of treasury stock, net of broker fees | (7,370,000) | |
Re-sale of treasury stock, net of broker fees | 7,370,000 | |
Net cash provided by (used in) financing activities | 45,190 | (22,015) |
Net (decrease) in cash and cash equivalents | (2,272,151) | (4,188,899) |
Cash, restricted cash, and cash equivalents at beginning of period | 9,967,752 | 14,803,065 |
Cash and cash equivalents at end of period | 7,695,601 | 10,614,166 |
Supplemental disclosure cash flow information | ||
Cash paid for interest | 324,861 | |
Cash paid for income taxes | ||
Supplemental disclosure of non-cash investing and financing activities | ||
Common stock issued for services | $ 178,447 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Statement of Cash Flows [Abstract] | ||
Cash | $ 7,243,580 | $ 10,423,660 |
Restricted cash | 452,021 | 190,506 |
Total cash and restricted cash | $ 7,695,601 | $ 10,614,166 |
Nature of Operations and Liquid
Nature of Operations and Liquidity | 3 Months Ended |
Jul. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Liquidity | Note 1. Nature of Operations and Liquidity Overview Aspen Group, Inc. (together with its subsidiaries, the “Company,” “Aspen,” or “AGI”) is a holding company, which has three subsidiaries. They are Aspen University Inc. (“Aspen University”) organized in 1987, Aspen Nursing, Inc. (“ANI”) (a subsidiary of Aspen University) formed in July 2018 and United States University, Inc. (“USU”) formed in May 2017. USU was the vehicle we used to acquire United States University on December 1, 2017. (See Note 4). When we refer to USU in this Report, we refer to either the online university which has operated under the name United States University or our subsidiary which operates this university, as the context implies. AGI is an education technology holding company that leverages its infrastructure and expertise to allow its two universities, Aspen 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. AGI’s primary focus relative to future growth is to target the high growth nursing profession, currently 82% of all students across both universities are degree-seeking nursing students. Since 1993, Aspen University has been nationally accredited by the Distance Education and Accrediting Council (“DEAC”), a national accrediting agency recognized by the U.S. Department of Education (the “DOE”). In February 2019, the DEAC informed Aspen 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 Company’s 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 31, 2019 and 2018, our cash flows for the three months ended July 31, 2019 and 2018, and our financial position as of July 31, 2019 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 30, 2019 as filed with the SEC on July 9, 2019. The April 30, 2019 balance sheet is derived from those statements. Liquidity At July 31, 2019, the Company had a cash balance of $7,243,580 with an additional $452,021 in restricted cash. 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) In March 2019, the Company entered into two loan agreements for a principal amount of $5 million each and received total proceeds of $10 million. 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 subject to paying a 1% one-time extension fee. (See Note 6) During the quarter ended July 31, 2019 the Company used cash of $2,272,151, which included using $1,685,083 in operating activities. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2. Significant Accounting Policies Principles of Consolidation The unaudited consolidated financial statements include the accounts of AGI and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of the unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates. Significant estimates in the accompanying unaudited consolidated financial statements include the allowance for doubtful accounts and other receivables, the valuation of collateral on certain receivables, estimates of the fair value of assets acquired and liabilities assumed in a business combination, amortization periods and valuation of courseware, intangibles and software development costs, estimates of the valuation of initial right of use assets and corresponding lease liabilities, valuation of beneficial conversion features in convertible debt, valuation of goodwill, valuation of loss contingencies, valuation of stock-based compensation and the valuation allowance on deferred tax assets. Cash, Cash Equivalents, and Restricted Cash For the purposes of the unaudited consolidated statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents at July 31, 2019 and April 30, 2019. The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits of $250,000 per financial institution. The Company has not experienced any losses in such accounts from inception through July 31, 2019. As of July 31, 2019 and April 30, 2019, the Company maintained deposits totaling $7,323,630 and $9,359,208, respectively, held in two separate institutions greater Restricted cash was $452,021 as of July 31, 2019 and consisted of $122,262 which is collateral for a letter of credit issued by the bank and required under the USU facility operating lease. Also, included was $71,932 and an additional $257,827, which was collateral for a letter of credit issued by the bank and related to USU’s receipt of Title IV funds as required by DOE in connection with the change of control of USU. Restricted cash as of April 30, 2019 was $448,400. Goodwill and Intangibles Goodwill currently represents the excess of the purchase price of USU over the fair market value of assets acquired and liabilities assumed from Educacion Significativa, LLC. Goodwill has an indefinite life and is not amortized. Goodwill is tested annually for impairment. Intangible assets represent both indefinite lived and definite lived assets. Accreditation, regulatory approvals, trade name and trademarks are deemed to have indefinite useful lives and accordingly are not amortized but are tested annually for impairment. Student relationships and curriculums are deemed to have definite lives and are amortized accordingly. Fair Value Measurements Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy: Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets; Level 2—Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and Level 3—Unobservable inputs that are supported by little or no market activity that are significant to the fair value of assets or liabilities. The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. Accounts Receivable and Allowance for Doubtful Accounts Receivable All students are required to select both a primary and secondary payment option with respect to amounts due to Aspen for tuition, fees and other expenses. The monthly payment plan represents approximately 68% of the payments that are made by students, making it the most common payment type. In instances where a student selects financial aid as the primary payment option, he or she often selects personal cash as the secondary option. If a student who has selected financial aid as his or her primary payment option withdraws prior to the end of a course but after the date that Aspen’s institutional refund period has expired, the student will have incurred the obligation to pay the full cost of the course. If the withdrawal occurs before the date at which the student has earned 100% of his or her financial aid, Aspen may have to return all or a portion of the Title IV funds to the DOE and the student will owe Aspen all amounts incurred that are in excess of the amount of financial aid that the student earned, and that Aspen is entitled to retain. In this case, Aspen must collect the receivable using the student’s second payment option. For accounts receivable from students, Aspen records an allowance for doubtful accounts for estimated losses resulting from the inability, failure or refusal of its students to make required payments, which includes the recovery of financial aid funds advanced to a student for amounts in excess of the student’s cost of tuition and related fees. Aspen determines the adequacy of its allowance for doubtful accounts using an allowance method based on an analysis of its historical bad debt experience, current economic trends, and the aging of the accounts receivable and each student’s status. Aspen estimates the amounts to increase the allowance based upon the risk presented by the age of the receivables and student status. Aspen writes off accounts receivable balances at the time the balances are deemed uncollectible. Aspen continues to reflect accounts receivable with an offsetting allowance as long as management believes there is a reasonable possibility of collection. For accounts receivable from primary payors other than students, Aspen estimates its allowance for doubtful accounts by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations, such as bankruptcy proceedings and receivable amounts outstanding for an extended period beyond contractual terms. In these cases, Aspen uses assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are re-evaluated and adjusted as additional information is received. The amounts calculated are analyzed to determine the total amount of the allowance. Aspen may also record a general allowance as necessary. Direct write-offs are taken in the period when Aspen has exhausted its efforts to collect overdue and unpaid receivables or otherwise evaluate other circumstances that indicate that Aspen should abandon such efforts. (See Note 8) When a student signs up for the monthly payment plan, there is a contractual amount that the Company can expect to earn over the life of the student’s program. This contractual amount cannot be recorded as an accounts receivable because, the student does have the option to stop attending. As a student takes a class, revenue is earned over the class term. Some students accelerate their program, taking two or more classes every eight week period, which increases the student’s accounts receivable balance. If any portion of that balance will be paid in a period greater than 12 months, that portion is reflected as long-term accounts receivable. At July 31, 2019 and April 30, 2019, those balances were $4,249,969 and $3,085,243, respectively. The Company has determined that the long term accounts receivable do not constitute a significant financing component as the list price, cash selling price and promised consideration are equal. Further, the interest free financing portion of the monthly payment plans are not considered significant to the contract. Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets per the following table. Category Useful Life Call center equipment 5 years Computer and office equipment 5 years Furniture and fixtures 7 years Library (online) 3 years Software 5 years Costs incurred to develop internal-use software during the preliminary project stage are expensed as incurred. Internal-use software development costs are capitalized during the application development stage, which is after: (i) the preliminary project stage is completed; and (ii) management authorizes and commits to funding the project and it is probable the project will be completed and used to perform the function intended. Capitalization ceases at the point the software project is substantially complete and ready for its intended use, and after all substantial testing is completed. Upgrades and enhancements are capitalized if it is probable that those expenditures will result in additional functionality. Depreciation is provided for on a straight-line basis over the expected useful life of five years of the internal-use software development costs and related upgrades and enhancements. When existing software is replaced with new software, the unamortized costs of the old software are expensed when the new software is ready for its intended use. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful lives of the leasehold improvements. Upon the retirement or disposition of property and equipment, the related cost and accumulated depreciation are removed and a gain or loss is recorded in the consolidated statements of operations. Repairs and maintenance costs are expensed in the period incurred. Courseware and Accreditation The Company records the costs of courseware and accreditation in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350 “Intangibles - Goodwill and Other”. Generally, costs of courseware creation and enhancement are capitalized. Accreditation renewal or extension costs related to intangible assets are capitalized as incurred. Courseware is stated at cost less accumulated amortization. Amortization is provided for on a straight-line basis over the expected useful life of five years. Long-Lived Assets The Company assesses potential impairment to its long-lived assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include, but are not limited to: significant changes in performance relative to expected operating results, significant changes in the use of the assets, significant negative industry or economic trends, a significant decline in the Company’s stock price for a sustained period of time, and changes in the Company’s business strategy. An impairment loss is recorded when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Any required impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds fair value and is recorded as a reduction in the carrying value of the related asset and an expense to operating results. Refunds Due Students The Company receives Title IV funds from the Department of Education to cover tuition and living expenses. After deducting tuition and fees, the Company sends checks for the remaining balances to the students. Leases The Company enters into various lease agreements in conducting its business. At the inception of each lease, the Company evaluates the lease agreement to determine whether the lease is an operating or capital lease. Leases may contain initial periods of free rent and/or periodic escalations. When such items are included in a lease agreement, the Company records rent expense on a straight-line basis over the initial term of a lease. The difference between the rent payment and the straight-line rent expense is recorded as additional amortization. The Company expenses any additional payments under its operating leases for taxes, insurance or other operating expenses as incurred. The Company implemented ASU 2016-02 as of May 1, 2019. There were no material changes to our unaudited consolidated financial statements other than additional assets and off-setting liabilities. In February 2016, the Financial Accounting Standards Board, of FASB, issued Accounting Standards Update, or ASU, No. 2016-02, Leases (Topic 842). This standard requires entities to recognize most operating leases on their balance sheets as right-of-use assets with a corresponding lease liability, along with disclosing certain key information about leasing arrangements. The Company adopted the standard effective May 1, 2019 using the cumulative effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted the following practical expedients and elected the following accounting policies related to this standard: · Carry forward of historical lease classification; · Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and lease liabilities for leases with a term of 12 months or less; and · Not separate lease and non-lease components for office space and campus leases. The adoption of this standard resulted in the recognition of operating lease right-of-use assets (“ROU’s”) and corresponding lease liabilities of approximately $8.0 million and $8.2 million, respectively Disclosures related to the amount, timing, and uncertainty of cash flows arising from leases are included in Note 9. Treasury Stock Purchases and sales of treasury stock are accounted for using the cost method. Under this method, shares acquired are recorded at the acquisition price directly to the treasury stock account. Upon sale, the treasury stock account is reduced by the original acquisition price of the shares and any difference is recorded in equity. This method does not allow the company to recognize a gain or loss to income from the purchase and sale of treasury stock. Revenue Recognition and Deferred Revenue On May 1, 2018, the Company adopted Accounting Standards Codification 606 (ASC 606). ASC 606 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASC also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer purchase orders, including significant judgments. Our adoption of this ASC, resulted in no change to our results of operations or our balance sheet. Revenues consist primarily of tuition and course fees derived from courses taught by the Company online as well as from related educational resources and services that the Company provides to its students. Under ASC 606, the tuition and course fee revenue is recognized pro-rata over the applicable period of instruction and are not considered separate performance obligations. Non-tuition related revenue and fees are recognized as services are provided or when the goods are received by the student. (See Note 8) The Company had revenues from students outside the United States representing 1.48% and 1.9% of the revenues for the quarters ended July 31, 2019 and 2018 respectively. Cost of Revenues Cost of revenues consists of two categories, instructional costs and services, and marketing and promotional costs. Instructional Costs and Services Instructional costs and services consist primarily of costs related to the administration and delivery of the Company's educational programs. This expense category includes compensation costs associated with online faculty, technology license costs and costs associated with other support groups that provide services directly to the students and are included in cost of revenues. Marketing and Promotional Costs Marketing and promotional costs include costs associated with producing marketing materials and advertising. Such costs are generally affected by the cost of advertising media, the efficiency of the Company's marketing and recruiting efforts, and expenditures on advertising initiatives for new and existing academic programs. Non-direct response advertising activities are expensed as incurred, or the first time the advertising takes place, depending on the type of advertising activity. Total marketing and promotional costs were $2,209,239 and $2,187,456 for the fiscal quarters ended July 31, 2019 and 2018, respectively and are included in cost of revenues. General and Administrative General and administrative expenses include compensation of employees engaged in corporate management, finance, human resources, information technology, academic operations, compliance and other corporate functions. General and administrative expenses also include professional services fees, bad debt expense related to accounts receivable, financial aid processing costs, non-capitalizable courseware and software costs, travel and entertainment expenses and facility costs. Legal Expenses All legal costs for litigation are charged to expense as incurred. Income Tax The Company uses the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial statement amounts. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. The Company has deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets are subject to periodic recoverability assessments. Realization of the deferred tax assets, net of deferred tax liabilities, is principally dependent upon achievement of projected future taxable income. The Company records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company accounts for uncertainty in income taxes using a two-step approach for evaluating tax positions. Step one, recognition, occurs when the Company concludes that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. Step two, measurement, is only addressed if the position is more likely than not to be sustained. Under step two, the tax benefit is measured as the largest amount of benefit, determined on a cumulative probability basis, which is more likely than not to be realized upon ultimate settlement. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. Stock-Based Compensation Stock-based compensation expense is measured at the grant date of the award and is expensed over the requisite service period. For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes option pricing model. Determining the fair value of stock-based awards at the grant date under this model requires judgment, including estimating volatility, employee stock option exercise behaviors and forfeiture rates. The assumptions used in calculating the fair value of stock-based awards represent the Company's best estimates, but these estimates involve inherent uncertainties and the application of management judgment. For non-employee stock-based awards, the Company has early adopted ASU 2018-07, which substantially aligns share based compensation for employees and non-employees. Business Combinations We include the results of operations of businesses we acquire from the date of the respective acquisition. We allocate the purchase price of acquisitions to the assets acquired and liabilities assumed at fair value. The excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed is recorded as goodwill. We expense transaction costs associated with business combinations as incurred. Net Loss Per Share Net loss per share of common stock is based on the weighted average number of shares of common stock outstanding during each period. Options to purchase 3,237,840 and 3,515,070 shares of common stock, warrants to purchase 687,292 and 650,847 shares of common stock, unvested restricted stock of 99,803 and 0, and $50,000 and $50,000 of convertible debt (convertible into 4,167 and 4,167 shares of common stock) were outstanding at July 31, 2019 and July 31, 2018, respectively, but were not included in the computation of diluted net loss per share because the effects would have been anti-dilutive. The options, warrants and convertible debt are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share of common stock when their effect is dilutive. Segment Information The Company operates in one reportable segment as a single educational delivery operation using a core infrastructure that serves the curriculum and educational delivery needs of its online students regardless of geography. The Company's chief operating decision makers, its Chief Executive Officer and Chief Academic Officer, manage the Company's operations as a whole, and no revenue, expense or operating income information is evaluated by the chief operating decision makers on any component level. Recent Accounting Pronouncements Financial Accounting Standards Board, Accounting Standard Updates which are not effective until after July 31, 2019, are not expected to have a significant effect on the Company’s consolidated financial position or results of operations. ASU 2016-02 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Jul. 31, 2019 | |
Property and equipment: | |
Property and Equipment | Note 3. Property and Equipment As property and equipment reach the end of their useful lives, the fully expired asset is written off against the associated accumulated depreciation. There is no expense impact for such write offs. Property and equipment consisted of the following at July 31, 2019 and April 30, 2019: July 31, April 30, 2019 2019 Call center hardware $ 245,715 $ 193,774 Computer and office equipment 330,267 327,621 Furniture and fixtures 1,430,349 1,381,271 Software 4,765,597 4,314,198 6,771,928 6,216,864 Accumulated depreciation (2,083,277 ) (1,825,524 ) Property and equipment, net $ 4,688,651 $ 4,391,340 Software consisted of the following at July 31, 2019 and April 30, 2019: July 31, 2019 April 30, 2019 Software $ 4,765,597 $ 4,314,198 Accumulated depreciation (1,517,765 ) (1,351,193 ) Software, net $ 3,247,832 $ 2,963,005 Depreciation expense and amortization for all Property and Equipment as well as the portion for just software is presented below for the three months ended July 31, 2019 and 2018: Three Months Ended July 31, 2019 2018 Depreciation and amortization Expense $ 312,432 $ 204,335 Software amortization Expense $ 170,189 $ 143,774 The following is a schedule of estimated future amortization expense of software at July 31, 2019: Year Ending July 31, Future Expense 2020 $ 689,009 2021 854,804 2022 765,330 2023 605,091 2024 315,809 Thereafter 17,789 Total $ 3,247,832 |
USU Goodwill and Intangibles
USU Goodwill and Intangibles | 3 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
USU Goodwill and Intangibles | Note 4. USU Goodwill and Intangibles On December 1, 2017, USU acquired United States University and assumed certain liabilities from Educacion Significativa, LLC (“ESL”). USU is a wholly owned subsidiary of AGI and was formed for the purpose of completing the asset purchase transaction. For purposes of purchase accounting, AGI is referred to as the acquirer. AGI acquired the assets and assumed certain liabilities of ESL. The acquisition was accounted for by AGI in accordance with the acquisition method of accounting pursuant to ASC 805 “Business Combinations” and pushdown accounting was applied to record the fair value of the assets acquired and liabilities assumed on United States University, Inc. Under this method, the purchase price is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the amount paid over the estimated fair values of the identifiable net assets was $5,011,432 which has been reflected in the consolidated balance sheet as goodwill. The goodwill resulting from the acquisition may become deductible for tax purposes in the future. The goodwill resulting from the acquisition is principally attributable to the future earnings potential associated with enrollment growth and other intangibles that do not qualify for separate recognition such as the assembled workforce. We have selected an April 30 th We assigned an indefinite useful life to the accreditation and regulatory approvals and the trade name and trademarks as we believe they have the ability to generate cash flows indefinitely. In addition, there are no legal, regulatory, contractual, economic or other factors to limit the intangibles’ useful life and we intend to renew the intangibles, as applicable, and renewal can be accomplished at little cost. We determined all other acquired intangibles are finite-lived and we are amortizing them on either a straight-line basis or using an accelerated method to reflect the pattern in which the economic benefits of the assets are expected to be consumed. Amortization expense for the three months ended July 31, 2019 and 2018 were $275,000 and $275,000 respectively. Intangible assets consisted of the following at July 31, 2019 and April 30, 2019: July 31, April 30, 2019 2019 Intangible assets $ 10,100,000 $ 10,100,000 Accumulated amortization (1,833,333 ) (1,558,333 ) Net intangible assets $ 8,266,667 $ 8,541,667 |
Courseware and Accreditation
Courseware and Accreditation | 3 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Courseware and Accreditation | Note 5. Courseware and Accreditation Courseware costs capitalized were $1,525 for the three months ended July 31, 2019 and $34,422 for the year ended April 30, 2019. As courseware reaches the end of its useful life, it is written off against the accumulated amortization. There is no expense impact for such write-offs. Courseware consisted of the following at July 31, 2019 and April 30, 2019: July 31, 2019 April 30, 2019 Courseware $ 324,512 $ 325,987 Accreditation 57,850 57,100 Accumulated amortization (237,299 ) (221,157) Courseware, net $ 145,063 $ 161,930 The Company had capitalized accreditation costs of $750 and $57,100 for the three months ended July 31, 2019 and year ended April 30, 2019. Amortization expense of courseware for the three months ended July 31, 2019 and 2018: Three Months Ended July 31, 2019 2018 Amortization expense $ 19,142 $ 15,371 The following is a schedule of estimated future amortization expense of courseware at July 31, 2019: Year Ending July 31, Future Expense 2020 $ 44,847 2021 37,100 2022 29,213 2023 23,673 2024 10,171 Thereafter 59 Total $ 145,063 |
Debt
Debt | 3 Months Ended |
Jul. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Note 6. Debt Convertible Notes On February 29, 2012, a loan payable of $50,000 was converted into a two-year convertible promissory note, interest of 0.19% per annum. Beginning March 31, 2012, the note was convertible into shares of common stock of the Company at the conversion price of $12.00 per share (taking into account the one-for-12 reverse stock split of the Company’s common stock). The Company evaluated the convertible note and determined that, for the embedded conversion option, there was no beneficial conversion value to record as the conversion price is considered to be the fair market value of the common stock on the note issue date. This loan (now a convertible promissory note) was originally due in February 2014. The amount due under this note has been reserved for payment upon the note being tendered to the Company by the note holder. However, this $50,000 note is derived from $200,000 of loans made to Aspen University prior to 2011, which was prior to the merger of Aspen University and EGC, the acquisition vehicle led by Michael Mathews, the Company’s current Chairman and Chief Executive Officer. The bankruptcy judge in the HEMG bankruptcy proceedings has recently ruled that the Company may pursue remedies for these undisclosed loans. Revolving Credit Facility On November 5, 2018, the Company entered into a loan agreement (the “Credit Facility Agreement”) with the Leon and Toby Cooperman Family Foundation (the “Foundation”). The Credit Facility Agreement provides for a $5,000,000 revolving credit facility (the “Facility”) evidenced by a revolving promissory note (the “Revolving Note”). Borrowings under the Credit Facility Agreement will bear interest at 12% per annum. The Facility matures on November 4, 2021. Pursuant to the terms of the Credit Facility Agreement, the Company paid to the Foundation a $100,000 one-time upfront Facility fee. The Company also is paying the Foundation a commitment fee, payable quarterly at the rate of 2% per annum on the undrawn portion of the Facility. As of July 31, 2019, the Company has not borrowed any sum under the Facility. The Credit Facility Agreement contains customary representations and warranties, events of default and covenants. Pursuant to the Loan Agreement and the Revolving Note, all future or contemporaneous indebtedness incurred by the Company, other than indebtedness expressly permitted by the Credit Facility Agreement and the Revolving Note, and the senior term loans described below will be subordinated to the Facility. Pursuant to the Credit Facility Agreement, on November 5, 2018 the Company issued to the Foundation warrants to purchase 92,049 shares of the Company’s common stock exercisable for five years from the date of issuance at the exercise price of $5.85 per share which were deemed to have a relative fair value of $255,071. The relative fair value of the warrants along with the Facility fee were treated as debt issue costs, as the facility has not been drawn on, assets to be amortized over the term of the loan. On March 6, 2019, in connection with entering into the Senior Secured Loans, the Company amended and restated the Credit Facility Agreement (the “Amended and Restated Facility Agreement”) and the Revolving Note. The Amended and Restated Facility Agreement provides among other things that the Company’s obligations thereunder are secured by a first priority lien in the Collateral, on a pari passu basis with the Lenders. Senior Secured Term Loans On March 6, 2019, the Company entered into two loan agreements (each a “Loan Agreement” and together, the “Loan Agreements”) with the Foundation, of which Mr. Leon Cooperman, a stockholder of the Company, is the trustee, and another stockholder of the Company (each a “Lender” and together, the “Lenders”). Each Loan Agreement provides for a $5,000,000 term loan (each a “Loan” and together, the “Loans”), evidenced by a term promissory note and security agreement (each a “Term Note” and together, the “Term Notes”), for combined total proceeds of $10,000,000 million. The Company borrowed $5,000,000 from each Lender that day. The Term Notes bear interest at 12% per annum and mature on September 6, 2020, subject to one 12-month extension upon the Company’s option, and upon payment of a 1% one-time extension fee. Pursuant to the Loan Agreements and the Term Notes, all future or contemporaneous indebtedness incurred by the Company, other than indebtedness expressly permitted by the Loan Agreements and the Term Notes, will be subordinated to the Loans. The Company’s obligations under the Loan Agreements are secured by a first priority lien in certain deposit accounts of the Company, all current and future accounts receivable of Aspen University and USU, certain of the deposit accounts of Aspen University and USU, and all of the outstanding capital stock of Aspen University and USU (the “Collateral”). Pursuant to the Loan Agreements, on March 6, 2019 the Company issued to each Lender warrants to purchase 100,000 shares of the Company’s common stock exercisable for five years from the date of issuance at the exercise price of $6.00 per share. The two warrants were deemed to have a combined relative fair value of $360,516. The relative fair value along with closing costs of $33,693 were treated as debt discounts to be amortized over the term of the Loans. On March 6, 2019, in connection with entering into the Loan Agreements, the Company also entered into an intercreditor agreement (the “Intercreditor Agreement”) among the Company, the Lenders and the Foundation, individually. The Intercreditor Agreement provides among other things that the Company’s obligations under this agreement, and the security interests in the Collateral granted pursuant to, the Loan Agreements and the Amended and Restated Facility Agreement shall rank pari passu |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Jul. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Note 7. Stockholders’ Equity Preferred Stock On June 28, 2019, the Company amended its Certificate of Incorporation, as amended, to reduce in the number of shares of common stock the Company is authorized to issue from 250,000,000 to 40,000,000 shares, and the number of shares of preferred stock the Company is authorized to issue from 10,000,000 to 1,000,000 shares. The stockholders of the Company had previously approved the Amendment at a special meeting of stockholders held on June 28, 2019. The Company is authorized to issue 1,000,000 shares of “blank check” preferred stock with designations, rights and preferences as may be determined from time to time by our Board of Directors. As of July 31, 2019 and April 30, 2019, we had no shares of preferred stock issued and outstanding. Common Stock The Company is authorized to issue 40,000,000 shares of common stock. During the three months ended July 31, 2019, the Company issued 101,894 shares of common stock upon the cashless exercise of stock options. During the three months ended July 31, 2019, the Company issued 19,403 shares of common stock upon the cashless exercise of 43,860 warrants. During the three months ended July 31, 2019, the Company issued 21,876 shares of common stock upon the exercise of stock options for cash and received proceeds of $45,190. Restricted Stock There were 99,803 unvested shares of restricted common stock outstanding at July 31, 2019. Total unrecognized compensation expense related to the unvested common stock as of July 31, 2019 amounted to approximately $1.6 million which will be amortized over the remaining vesting periods. During the three months ended July 31, 2019, the Company issued 30,131 shares of restricted common stock to certain directors with a fair value of $122,332. On June 18, 2019, in order to correct errors in a third party software system used to track stock options, the Company granted Andrew Kaplan, a current director, 5,131 shares of restricted common stock and two former directors (not recipients of the May 2019 stock options mentioned above) a total of 25,000 shares of restricted common stock. During fiscal 2019, the Company granted 25,000 shares to its investor relations firm, of which 5,000 were vested with the balance vesting quarterly over one year, subject to continued service. The total value was $122,250 which will be recognized over the service period. The Board approved a grant of 25,000 shares of restricted stock to the Chief Financial Officer in September 2018. The stock vests over 36 months and the stock price was $7.15 on the date of the grant. The value of the compensation was approximately $180,000 and will be recognized over 36 months. On December 24, 2018, the Company granted a total of 24,672 shares to certain directors with a value of $126,320 which will be recognized over 36 months. Warrants A summary of the Company’s warrant activity during the three months ended July 31, 2019 is presented below: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Shares Price Term Value Balance Outstanding, April 30, 2019 731,152 $ 5.28 3.29 $ 413,296 Granted — — — — Exercised (43,860 ) — — — Surrendered — — — — Expired — — — — Balance Outstanding, July 31, 2019 687,292 $ 5.47 3.24 $ 244,286 Exercisable, July 31, 2019 637,292 $ 5.52 3.13 $ 244,286 ALL WARRANTS EXERCISABLE WARRANTS Weighted Weighted Weighted Average Outstanding Average Average Exercisable Exercise Exercise No. of Exercise Remaining Life No. of Price Price Warrants Price In Years Warrants $1.86 $1.86 88,710 $1.86 0.09 88,710 $2.28 $2.28 32,359 $2.28 0.10 32,359 $4.89 $4.89 50,000 $4.89 4.70 — $5.85 $5.85 92,049 $5.85 4.27 92,049 $6.00 $6.00 200,000 $6.00 4.60 200,000 $6.87 $6.87 224,174 $6.87 2.99 224,174 687,292 637,292 On June 3, 2019, a former director elected a cashless exercise of 21,930 warrants, receiving 9,806 shares. On June 7, 2019, the CEO elected a cashless exercise for the same amount receiving 9,597 shares. Stock Incentive Plan and Stock Option Grants to Employees and Directors On March 13, 2012, the Company adopted the Aspen Group, Inc. 2012 Equity Incentive Plan (the “2012 Plan”) that provides for the grant of 3,500,000 shares in the form of incentive stock options, non-qualified stock options, restricted shares, stock appreciation rights and restricted stock units to employees, consultants, officers and directors. As of July 31, 2019, there were 229,238 shares remaining available for future issuance under the 2012 Plan. On December 13, 2018, the stockholders of the Company approved the Aspen Group, Inc. 2018 Equity Incentive Plan (the “2018 Plan”) that provides for the grant of 500,000 shares in the form of incentive stock options, non-qualified stock options, restricted shares, stock appreciation rights and restricted stock units to employees, consultants, officers and directors. As of July 31, 2019, there were 10,852 shares remaining available for future issuance under the 2018 Plan. The Company estimates the fair value of share-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables such as the expected option term, expected volatility of the Company’s stock price over the expected term, expected risk-free interest rate over the expected option term, expected dividend yield rate over the expected option term, and an estimate of expected forfeiture rates. The Company believes this valuation methodology is appropriate for estimating the fair value of stock options granted to employees and directors which are subject to ASC Topic 718 requirements. These amounts are estimates and thus may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes compensation on a straight-line basis over the requisite service period for each award. The following table summarizes the assumptions the Company utilized to record compensation expense for stock options granted to employees during the period ended. July 31, April 30, 2019 2019 Expected life (years) 3 3.5 Expected volatility 46 % 50.1 % Risk-free interest rate 2.18 % 2.63 % Dividend yield 0.00 % 0.00 % Expected forfeiture rate n/a n/a The Company utilized the simplified method to estimate the expected life for stock options granted to employees. The simplified method was used as the Company does not have sufficient historical data regarding stock option exercises. The expected volatility is based on historical volatility. The risk-free interest rate is based on the U.S. Treasury yields with terms equivalent to the expected life of the related option at the time of the grant. Dividend yield is based on historical trends. While the Company believes these estimates are reasonable, the compensation expense recorded would increase if the expected life was increased, a higher expected volatility was used, or if the expected dividend yield increased. A summary of the Company’s stock option activity for employees and directors during the three months ended July 31, 2019, is presented below: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Shares Price Term Value Balance Outstanding, April 30, 2019 3,408,154 $ 4.44 2.90 $ 6,880,644 Granted 30,000 4.12 — — Exercised (191,147 ) 1.88 — — Forfeited (9,167 ) 7.62 — — Expired — — — — Balance Outstanding, July 31, 2019 3,237,840 $ 4.57 2.90 $ 6,880,644 Exercisable, July 31, 2019 2,057,324 $ 3.50 2.79 $ 5,130,588 ALL OPTIONS EXERCISABLE OPTIONS Weighted Weighted Weighted Average Outstanding Average Average Exercisable Exercise Exercise No. of Exercise Remaining Life No. of Price Price Options Price In Years Options $1.57 to $2.10 $1.98 736,577 $1.98 2.29 736,577 $2.28 to $2.76 $2.31 462,747 $2.31 1.09 456,287 $3.24 to $4.38 $3.86 363,223 $3.90 2.30 274,127 $4.50 to $5.20 $4.93 714,792 $4.90 2.79 336,833 $5.95 to $6.28 $6.07 80,417 $6.13 2.93 36,806 $7.17 to $7.55 $7.39 662,417 $7.51 3.91 144,139 $8.57 to $9.07 $8.98 217,667 $8.98 3.44 72,555 Options only 3,237,840 2,057,324 Effective May 13, 2019, the Company granted a total of 30,000 five-year non-qualified stock options to certain former directors exercisable at $4.12 per share. During the three months ended July 31, 2019, the Company issued 101,894 shares of common stock upon the cashless exercise of stock options. During the three months ended July 31, 2019, the Company issued 21,876 shares of common stock upon the exercise of stock options for cash and received proceeds of $45,190. The Company recorded a compensation expense of $498,417 for the fiscal quarter ended July 31, 2019 in connection with stock options and restricted stock grants. As of July 31, 2019, there was $1,576,081 of unrecognized compensation costs related to non-vested share-based option arrangements. That cost is expected to be recognized over a weighted-average period of approximately 2.0 years. |
Revenue
Revenue | 3 Months Ended |
Jul. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 8. Revenue Revenues consist primarily of tuition and fees derived from courses taught by the Company online as well as from related educational resources that the Company provides to its students, such as access to our online materials and learning management system. The CompanyÂ’s educational programs have starting and ending dates that differ from its fiscal quarters. Therefore, at the end of each fiscal quarter, a portion of revenue from these programs is not yet earned and is therefore deferred. The Company also charges students fees for library and technology costs, which are recognized over the related service period and are not considered separate performance obligations. Other services, books, and exam fees are recognized as services are provided or when goods are received by the student. The CompanyÂ’s contract liabilities are reported as deferred revenue and refunds due students. Deferred revenue represents the amount of tuition, fees, and other student invoices in excess of the portion recognized as revenue and it is included in current liabilities in the accompanying unaudited consolidated balance sheets. The following table represents our revenues disaggregated by the nature and timing of services: Three Months Ended July 31, 2019 2018 Tuition - recognized over period of instruction $ 9,290,952 $ 6,633,840 Course fees - recognized over period of instruction 925,954 461,211 Book fees - recognized at a point in time 20,785 24,214 Exam fees - recognized at a point in time 60,100 52,240 Service fees - recognized at a point in time 60,191 49,800 $ 10,357,982 $ 7,221,305 Contract Balances and Performance Obligations The Company recognizes deferred revenue as a student participates in a course which continues past the balance sheet date. Deferred revenue at July 31, 2019 was $2,681,037 which is future revenue that has not yet been earned for courses in progress. The Company has $1,591,632 of refunds due students, which mainly represents Title IV funds due to students after deducting their tuition payments Of the total revenue earned during the three months ended July 31, 2019, approximately $2.5 million came from revenues which were deferred at April 30, 2019. The Company begins providing the performance obligation by beginning instruction in a course, a contract receivable is created, resulting in accounts receivable. The Company accounts for receivables in accordance with ASC 310, Receivables. The Company uses the portfolio approach, as discussed below. Aspen records an allowance for doubtful accounts for estimated losses resulting from the inability, failure or refusal of its students to make required payments, which includes the recovery of financial aid funds advanced to a student for amounts in excess of the studentÂ’s cost of tuition and related fees. Aspen determines the adequacy of its allowance for doubtful accounts using an allowance method based on an analysis of its historical bad debt experience, current economic trends, and the aging of the accounts receivable and student status. Aspen applies reserves to its receivables based upon an estimate of the risk presented by the age of the receivables and student status. Aspen writes off accounts receivable balances at the time the balances are deemed uncollectible. Aspen continues to reflect accounts receivable with an offsetting allowance as long as management believes there is a reasonable possibility of collection . Cash Receipts Our students finance costs through a variety of funding sources, including, among others, monthly payment plans, installment plans, federal loan and grant programs (Title IV), employer reimbursement, and various veterans and military funding and grants, and cash payments. Most students elect to use our monthly payment plan. This plan allows them to make continuous monthly payments during the length of their program and through the length of their payment plan. Title IV and military funding typically arrives during the period of instruction. Students who receive reimbursement from employers typically do so after completion of a course. Students who choose to pay cash for a class typically do so before beginning the class. Significant Judgments We analyze revenue recognition on a portfolio approach under ASC 606-10-10-4. Significant judgment is utilized in determining the appropriate portfolios to assess for meeting the criteria to recognize revenue under ASC Topic 606. We have determined that all of our students can be grouped into one portfolio. Students behave similarly, regardless of their payment method or academic program. Enrollment agreements and refund policies are similar for all of our students. We do not expect that revenue earned for the portfolio is significantly different as compared to revenue that would be earned if we were to assess each student contract separately. The Company maintains institutional tuition refund policies, which provides for all or a portion of tuition to be refunded if a student withdraws during stated refund periods. Certain states in which students reside impose separate, mandatory refund policies, which override the CompanyÂ’s policy to the extent in conflict. If a student withdraws at a time when a portion or none of the tuition is refundable, then in accordance with its revenue recognition policy, the Company recognizes as revenue the tuition that was not refunded. Since the Company recognizes revenue pro-rata over the term of the course and because, under its institutional refund policy, the amount subject to refund is never greater than the amount of the revenue that has been deferred, under the CompanyÂ’s accounting policies revenue is not recognized with respect to amounts that could potentially be refunded. The Company had revenues from students outside the United States representing 1.48% and 1.9% of the revenues for the year ended July 31, 2019 and 2018 respectively. |
Leases
Leases | 3 Months Ended |
Jul. 31, 2019 | |
Lessee Disclosure [Abstract] | |
Leases | Note 9. Leases Operating lease assets are right-of-use assets, which represent the right to use an underlying asset for the lease term. Operating lease liabilities represent the obligation to make lease payments arising from the lease. Operating leases are included in the Operating Lease Assets, net, and Operating Lease Liabilities, Current and Long-term on the unaudited Consolidated Balance Sheet at July 31, 2019. These assets and lease liabilities are recognized based on the present value of remaining lease payments over the lease term. When the lease does not provide an implicit interest rate, the Company uses an incremental borrowing rate to determine the present value of the lease payments. The right-of-use asset includes all lease payments made and excludes lease incentives. Lease expense for operating leases is recognized on a straight-line basis over the lease term. There are no variable lease payments. Lease expense for the three month period ended July 31, 2019 was $612,597. These costs are primarily related to long-term operating leases, but also include amounts for short-term leases with terms greater than 30 days that are not material. The following is a schedule by years of future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of July 31, 2019. Lease Payments Maturity of Lease Liabilities 2020 (remaining) $ 1,693,602 2021 2,293,382 2022 2,225,348 2023 1,663,434 2024 1,474,175 2025 1,134,718 2026 and beyond 779,287 Total future minimum lease payments 11,263,946 Less imputed interest (3,067,840 ) Present value of operating lease liabilities $ 8,196,106 Balance Sheet Classification Operating lease liabilities, current $ 1,100,411 Operating lease liabilities, long-term 7,095,695 Total operating lease liabilities $ 8,196,106 Other Information Weighted average remaining lease term (in years) 5.3 Weighted average discount rate 12.0 % Cash Flows An initial ROU asset of $8.0 million was recognized as a non-cash asset addition with the adoption of the standard. There were no additional ROU assets recognized as non-cash asset additions during the quarter ended July 31, 2019. Cash paid for amounts included in the present value of operating lease liabilities at adoption and for the quarter ended July 31, 2019 was $1.7 million and $0.5 million, respectively, and is included in operating cash flows. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10. Commitments and Contingencies Regulatory Matters The Company’s subsidiaries, Aspen University and United States University, are subject to extensive regulation by Federal and State governmental agencies and accrediting bodies. In particular, the Higher Education Act (the “HEA”) and the regulations promulgated thereunder by the DOE subject the subsidiaries to significant regulatory scrutiny on the basis of numerous standards that schools must satisfy to participate in the various types of federal student financial assistance programs authorized under Title IV of the HEA. On August 22, 2017, the DOE informed Aspen University of its determination that the institution has qualified to participate under the HEA and the Federal student financial assistance programs (Title IV, HEA programs) and set a subsequent program participation agreement reapplication date of March 31, 2021. USU currently has provisional certification to participate in the Title IV Programs due to its acquisition by the Company. The provisional certification allows the school to continue to receive Title IV funding as it did prior to the change of ownership. The HEA requires accrediting agencies to review many aspects of an institution's operations in order to ensure that the education offered is of sufficiently high quality to achieve satisfactory outcomes and that the institution is complying with accrediting standards. Failure to demonstrate compliance with accrediting standards may result in the imposition of probation, the requirements to provide periodic reports, the loss of accreditation or other penalties if deficiencies are not remediated. Because our subsidiaries operate in a highly regulated industry, each may be subject from time to time to audits, investigations, claims of noncompliance or lawsuits by governmental agencies or third parties, which allege statutory violations, regulatory infractions or common law causes of action. Return of Title IV Funds An institution participating in Title IV Programs must correctly calculate the amount of unearned Title IV Program funds that have been disbursed to students who withdraw from their educational programs before completion and must return those unearned funds in a timely manner, no later than 45 days of the date the school determines that the student has withdrawn. Under the DOE regulations, failure to make timely returns of Title IV Program funds for 5% or more of students sampled on the institution's annual compliance audit in either of its two most recently completed fiscal years can result in the institution having to post a letter of credit in an amount equal to 25% of its required Title IV returns during its most recently completed fiscal year. If unearned funds are not properly calculated and returned in a timely manner, an institution is also subject to monetary liabilities or an action to impose a fine or to limit, suspend or terminate its participation in Title IV Programs. Delaware Approval to Confer Degrees Aspen University is a Delaware corporation. Delaware law requires an institution to obtain approval from the Delaware Department of Education (“Delaware DOE”) before it may incorporate with the power to confer degrees. The Delaware DOE granted full approval to operate with degree-granting authority in the State of Delaware until July 1, 2020. Aspen University is authorized by the Colorado Commission on Education to operate in Colorado as a degree granting institution. USU is also a Delaware corporation and received initial approval from the Delaware DOE to confer degrees through June 2023. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jul. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11. Subsequent Event Exercise of stock options On August 20, 2019, the Company issued a former director 17,382 shares of common stock upon a cashless exercise of stock options granted on November 20, 2015 and May 19, 2016. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The unaudited consolidated financial statements include the accounts of AGI and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates. Significant estimates in the accompanying unaudited consolidated financial statements include the allowance for doubtful accounts and other receivables, the valuation of collateral on certain receivables, estimates of the fair value of assets acquired and liabilities assumed in a business combination, amortization periods and valuation of courseware, intangibles and software development costs, estimates of the valuation of initial right of use assets and corresponding lease liabilities, valuation of beneficial conversion features in convertible debt, valuation of goodwill, valuation of loss contingencies, valuation of stock-based compensation and the valuation allowance on deferred tax assets. |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash For the purposes of the unaudited consolidated statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents at July 31, 2019 and April 30, 2019. The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits of $250,000 per financial institution. The Company has not experienced any losses in such accounts from inception through July 31, 2019. As of July 31, 2019 and April 30, 2019, the Company maintained deposits totaling $7,323,630 and $9,359,208, respectively, held in two separate institutions greater Restricted cash was $452,021 as of July 31, 2019 and consisted of $122,262 which is collateral for a letter of credit issued by the bank and required under the USU facility operating lease. Also, included was $71,932 and an additional $257,827, which was collateral for a letter of credit issued by the bank and related to USUÂ’s receipt of Title IV funds as required by DOE in connection with the change of control of USU. Restricted cash as of April 30, 2019 was $448,400. |
Goodwill and Intangibles | Goodwill and Intangibles Goodwill currently represents the excess of the purchase price of USU over the fair market value of assets acquired and liabilities assumed from Educacion Significativa, LLC. Goodwill has an indefinite life and is not amortized. Goodwill is tested annually for impairment. Intangible assets represent both indefinite lived and definite lived assets. Accreditation, regulatory approvals, trade name and trademarks are deemed to have indefinite useful lives and accordingly are not amortized but are tested annually for impairment. Student relationships and curriculums are deemed to have definite lives and are amortized accordingly. |
Fair Value Measurements | Fair Value Measurements Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy: Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets; Level 2—Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and Level 3—Unobservable inputs that are supported by little or no market activity that are significant to the fair value of assets or liabilities. The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. |
Accounts Receivable and Allowance for Doubtful Accounts Receivable | Accounts Receivable and Allowance for Doubtful Accounts Receivable All students are required to select both a primary and secondary payment option with respect to amounts due to Aspen for tuition, fees and other expenses. The monthly payment plan represents approximately 68% of the payments that are made by students, making it the most common payment type. In instances where a student selects financial aid as the primary payment option, he or she often selects personal cash as the secondary option. If a student who has selected financial aid as his or her primary payment option withdraws prior to the end of a course but after the date that AspenÂ’s institutional refund period has expired, the student will have incurred the obligation to pay the full cost of the course. If the withdrawal occurs before the date at which the student has earned 100% of his or her financial aid, Aspen may have to return all or a portion of the Title IV funds to the DOE and the student will owe Aspen all amounts incurred that are in excess of the amount of financial aid that the student earned, and that Aspen is entitled to retain. In this case, Aspen must collect the receivable using the studentÂ’s second payment option. For accounts receivable from students, Aspen records an allowance for doubtful accounts for estimated losses resulting from the inability, failure or refusal of its students to make required payments, which includes the recovery of financial aid funds advanced to a student for amounts in excess of the studentÂ’s cost of tuition and related fees. Aspen determines the adequacy of its allowance for doubtful accounts using an allowance method based on an analysis of its historical bad debt experience, current economic trends, and the aging of the accounts receivable and each studentÂ’s status. Aspen estimates the amounts to increase the allowance based upon the risk presented by the age of the receivables and student status. Aspen writes off accounts receivable balances at the time the balances are deemed uncollectible. Aspen continues to reflect accounts receivable with an offsetting allowance as long as management believes there is a reasonable possibility of collection. For accounts receivable from primary payors other than students, Aspen estimates its allowance for doubtful accounts by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations, such as bankruptcy proceedings and receivable amounts outstanding for an extended period beyond contractual terms. In these cases, Aspen uses assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are re-evaluated and adjusted as additional information is received. The amounts calculated are analyzed to determine the total amount of the allowance. Aspen may also record a general allowance as necessary. Direct write-offs are taken in the period when Aspen has exhausted its efforts to collect overdue and unpaid receivables or otherwise evaluate other circumstances that indicate that Aspen should abandon such efforts. (See Note 8) When a student signs up for the monthly payment plan, there is a contractual amount that the Company can expect to earn over the life of the studentÂ’s program. This contractual amount cannot be recorded as an accounts receivable because, the student does have the option to stop attending. As a student takes a class, revenue is earned over the class term. Some students accelerate their program, taking two or more classes every eight week period, which increases the studentÂ’s accounts receivable balance. If any portion of that balance will be paid in a period greater than 12 months, that portion is reflected as long-term accounts receivable. At July 31, 2019 and April 30, 2019, those balances were $4,249,969 and $3,085,243, respectively. The Company has determined that the long term accounts receivable do not constitute a significant financing component as the list price, cash selling price and promised consideration are equal. Further, the interest free financing portion of the monthly payment plans are not considered significant to the contract. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets per the following table. Category Useful Life Call center equipment 5 years Computer and office equipment 5 years Furniture and fixtures 7 years Library (online) 3 years Software 5 years Costs incurred to develop internal-use software during the preliminary project stage are expensed as incurred. Internal-use software development costs are capitalized during the application development stage, which is after: (i) the preliminary project stage is completed; and (ii) management authorizes and commits to funding the project and it is probable the project will be completed and used to perform the function intended. Capitalization ceases at the point the software project is substantially complete and ready for its intended use, and after all substantial testing is completed. Upgrades and enhancements are capitalized if it is probable that those expenditures will result in additional functionality. Depreciation is provided for on a straight-line basis over the expected useful life of five years of the internal-use software development costs and related upgrades and enhancements. When existing software is replaced with new software, the unamortized costs of the old software are expensed when the new software is ready for its intended use. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful lives of the leasehold improvements. Upon the retirement or disposition of property and equipment, the related cost and accumulated depreciation are removed and a gain or loss is recorded in the consolidated statements of operations. Repairs and maintenance costs are expensed in the period incurred. |
Courseware and Accreditation | Courseware and Accreditation The Company records the costs of courseware and accreditation in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350 “Intangibles - Goodwill and Other”. Generally, costs of courseware creation and enhancement are capitalized. Accreditation renewal or extension costs related to intangible assets are capitalized as incurred. Courseware is stated at cost less accumulated amortization. Amortization is provided for on a straight-line basis over the expected useful life of five years. |
Long-Lived Assets | Long-Lived Assets The Company assesses potential impairment to its long-lived assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include, but are not limited to: significant changes in performance relative to expected operating results, significant changes in the use of the assets, significant negative industry or economic trends, a significant decline in the CompanyÂ’s stock price for a sustained period of time, and changes in the CompanyÂ’s business strategy. An impairment loss is recorded when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Any required impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds fair value and is recorded as a reduction in the carrying value of the related asset and an expense to operating results. |
Refunds Due Students | Refunds Due Students The Company receives Title IV funds from the Department of Education to cover tuition and living expenses. After deducting tuition and fees, the Company sends checks for the remaining balances to the students. |
Leases | Leases The Company enters into various lease agreements in conducting its business. At the inception of each lease, the Company evaluates the lease agreement to determine whether the lease is an operating or capital lease. Leases may contain initial periods of free rent and/or periodic escalations. When such items are included in a lease agreement, the Company records rent expense on a straight-line basis over the initial term of a lease. The difference between the rent payment and the straight-line rent expense is recorded as additional amortization. The Company expenses any additional payments under its operating leases for taxes, insurance or other operating expenses as incurred. The Company implemented ASU 2016-02 as of May 1, 2019. There were no material changes to our unaudited consolidated financial statements other than additional assets and off-setting liabilities. In February 2016, the Financial Accounting Standards Board, of FASB, issued Accounting Standards Update, or ASU, No. 2016-02, Leases (Topic 842). This standard requires entities to recognize most operating leases on their balance sheets as right-of-use assets with a corresponding lease liability, along with disclosing certain key information about leasing arrangements. The Company adopted the standard effective May 1, 2019 using the cumulative effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted the following practical expedients and elected the following accounting policies related to this standard: · Carry forward of historical lease classification; · Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and lease liabilities for leases with a term of 12 months or less; and · Not separate lease and non-lease components for office space and campus leases. The adoption of this standard resulted in the recognition of operating lease right-of-use assets (“ROU’s”) and corresponding lease liabilities of approximately $8.0 million and $8.2 million, respectively Disclosures related to the amount, timing, and uncertainty of cash flows arising from leases are included in Note 9. |
Treasury Stock | Treasury Stock Purchases and sales of treasury stock are accounted for using the cost method. Under this method, shares acquired are recorded at the acquisition price directly to the treasury stock account. Upon sale, the treasury stock account is reduced by the original acquisition price of the shares and any difference is recorded in equity. This method does not allow the company to recognize a gain or loss to income from the purchase and sale of treasury stock. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue On May 1, 2018, the Company adopted Accounting Standards Codification 606 (ASC 606). ASC 606 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASC also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer purchase orders, including significant judgments. Our adoption of this ASC, resulted in no change to our results of operations or our balance sheet. Revenues consist primarily of tuition and course fees derived from courses taught by the Company online as well as from related educational resources and services that the Company provides to its students. Under ASC 606, the tuition and course fee revenue is recognized pro-rata over the applicable period of instruction and are not considered separate performance obligations. Non-tuition related revenue and fees are recognized as services are provided or when the goods are received by the student. (See Note 8) The Company had revenues from students outside the United States representing 1.48% and 1.9% of the revenues for the quarters ended July 31, 2019 and 2018 respectively. |
Cost of Revenues | Cost of Revenues Cost of revenues consists of two categories, instructional costs and services, and marketing and promotional costs. |
Instructional Costs and Services | Instructional Costs and Services Instructional costs and services consist primarily of costs related to the administration and delivery of the Company's educational programs. This expense category includes compensation costs associated with online faculty, technology license costs and costs associated with other support groups that provide services directly to the students and are included in cost of revenues. |
Marketing and Promotional Costs | Marketing and Promotional Costs Marketing and promotional costs include costs associated with producing marketing materials and advertising. Such costs are generally affected by the cost of advertising media, the efficiency of the Company's marketing and recruiting efforts, and expenditures on advertising initiatives for new and existing academic programs. Non-direct response advertising activities are expensed as incurred, or the first time the advertising takes place, depending on the type of advertising activity. Total marketing and promotional costs were $2,209,239 and $2,187,456 for the fiscal quarters ended July 31, 2019 and 2018, respectively and are included in cost of revenues. |
General and Administrative | General and Administrative General and administrative expenses include compensation of employees engaged in corporate management, finance, human resources, information technology, academic operations, compliance and other corporate functions. General and administrative expenses also include professional services fees, bad debt expense related to accounts receivable, financial aid processing costs, non-capitalizable courseware and software costs, travel and entertainment expenses and facility costs. |
Legal Expenses | Legal Expenses All legal costs for litigation are charged to expense as incurred. |
Income Tax | Income Tax The Company uses the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial statement amounts. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. The Company has deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets are subject to periodic recoverability assessments. Realization of the deferred tax assets, net of deferred tax liabilities, is principally dependent upon achievement of projected future taxable income. The Company records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company accounts for uncertainty in income taxes using a two-step approach for evaluating tax positions. Step one, recognition, occurs when the Company concludes that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. Step two, measurement, is only addressed if the position is more likely than not to be sustained. Under step two, the tax benefit is measured as the largest amount of benefit, determined on a cumulative probability basis, which is more likely than not to be realized upon ultimate settlement. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is measured at the grant date of the award and is expensed over the requisite service period. For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes option pricing model. Determining the fair value of stock-based awards at the grant date under this model requires judgment, including estimating volatility, employee stock option exercise behaviors and forfeiture rates. The assumptions used in calculating the fair value of stock-based awards represent the Company's best estimates, but these estimates involve inherent uncertainties and the application of management judgment. For non-employee stock-based awards, the Company has early adopted ASU 2018-07, which substantially aligns share based compensation for employees and non-employees. |
Business Combinations | Business Combinations We include the results of operations of businesses we acquire from the date of the respective acquisition. We allocate the purchase price of acquisitions to the assets acquired and liabilities assumed at fair value. The excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed is recorded as goodwill. We expense transaction costs associated with business combinations as incurred. |
Net Loss Per Share | Net Loss Per Share Net loss per share of common stock is based on the weighted average number of shares of common stock outstanding during each period. Options to purchase 3,237,840 and 3,515,070 shares of common stock, warrants to purchase 687,292 and 650,847 shares of common stock, unvested restricted stock of 99,803 and 0, and $50,000 and $50,000 of convertible debt (convertible into 4,167 and 4,167 shares of common stock) were outstanding at July 31, 2019 and July 31, 2018, respectively, but were not included in the computation of diluted net loss per share because the effects would have been anti-dilutive. The options, warrants and convertible debt are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share of common stock when their effect is dilutive. |
Segment Information | Segment Information The Company operates in one reportable segment as a single educational delivery operation using a core infrastructure that serves the curriculum and educational delivery needs of its online students regardless of geography. The Company's chief operating decision makers, its Chief Executive Officer and Chief Academic Officer, manage the Company's operations as a whole, and no revenue, expense or operating income information is evaluated by the chief operating decision makers on any component level. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Financial Accounting Standards Board, Accounting Standard Updates which are not effective until after July 31, 2019, are not expected to have a significant effect on the CompanyÂ’s consolidated financial position or results of operations. ASU 2016-02 |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Property and Equipment Useful Lives | Depreciation is computed using the straight-line method over the estimated useful lives of the related assets per the following table. Category Useful Life Call center equipment 5 years Computer and office equipment 5 years Furniture and fixtures 7 years Library (online) 3 years Software 5 years |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Jul. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |
Schedule of Property and Equipment | Property and equipment consisted of the following at July 31, 2019 and April 30, 2019: July 31, April 30, 2019 2019 Call center hardware $ 245,715 $ 193,774 Computer and office equipment 330,267 327,621 Furniture and fixtures 1,430,349 1,381,271 Software 4,765,597 4,314,198 6,771,928 6,216,864 Accumulated depreciation (2,083,277 ) (1,825,524 ) Property and equipment, net $ 4,688,651 $ 4,391,340 |
Schedule of Depreciation and Amortization Expense | Depreciation expense and amortization for all Property and Equipment as well as the portion for just software is presented below for the three months ended July 31, 2019 and 2018: Three Months Ended July 31, 2019 2018 Depreciation and amortization Expense $ 312,432 $ 204,335 Software amortization Expense $ 170,189 $ 143,774 |
Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Schedule of Intangible Asset | Software consisted of the following at July 31, 2019 and April 30, 2019: July 31, 2019 April 30, 2019 Software $ 4,765,597 $ 4,314,198 Accumulated depreciation (1,517,765 ) (1,351,193 ) Software, net $ 3,247,832 $ 2,963,005 |
Schedule of Estimated Future Amortization Expense | The following is a schedule of estimated future amortization expense of software at July 31, 2019: Year Ending July 31, Future Expense 2020 $ 689,009 2021 854,804 2022 765,330 2023 605,091 2024 315,809 Thereafter 17,789 Total $ 3,247,832 |
USU Goodwill and Intangibles (T
USU Goodwill and Intangibles (Tables) | 3 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following at July 31, 2019 and April 30, 2019: July 31, April 30, 2019 2019 Intangible assets $ 10,100,000 $ 10,100,000 Accumulated amortization (1,833,333 ) (1,558,333 ) Net intangible assets $ 8,266,667 $ 8,541,667 |
Courseware and Accreditation (T
Courseware and Accreditation (Tables) - Courseware [Member] | 3 Months Ended |
Jul. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |
Schedule of Intangible Asset | Courseware consisted of the following at July 31, 2019 and April 30, 2019: July 31, 2019 April 30, 2019 Courseware $ 324,512 $ 325,987 Accreditation 57,850 57,100 Accumulated amortization (237,299 ) (221,157) Courseware, net $ 145,063 $ 161,930 |
Schedule of Amortization Expense of Intangible Assets | Amortization expense of courseware for the three months ended July 31, 2019 and 2018: Three Months Ended July 31, 2019 2018 Amortization expense $ 19,142 $ 15,371 |
Schedule of Estimated Future Amortization Expense | The following is a schedule of estimated future amortization expense of courseware at July 31, 2019: Year Ending July 31, Future Expense 2020 $ 44,847 2021 37,100 2022 29,213 2023 23,673 2024 10,171 Thereafter 59 Total $ 145,063 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Jul. 31, 2019 | |
Schedule of Warrants Activity | A summary of the Company’s warrant activity during the three months ended July 31, 2019 is presented below: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Shares Price Term Value Balance Outstanding, April 30, 2019 731,152 $ 5.28 3.29 $ 413,296 Granted — — — — Exercised (43,860 ) — — — Surrendered — — — — Expired — — — — Balance Outstanding, July 31, 2019 687,292 $ 5.47 3.24 $ 244,286 Exercisable, July 31, 2019 637,292 $ 5.52 3.13 $ 244,286 |
Stock Incentive Plan and Stock Option Grants to Employees and Directors [Member] | |
Schedule of Options and Warrants by Exercise Price Range | ALL OPTIONS EXERCISABLE OPTIONS Weighted Weighted Weighted Average Outstanding Average Average Exercisable Exercise Exercise No. of Exercise Remaining Life No. of Price Price Options Price In Years Options $1.57 to $2.10 $1.98 736,577 $1.98 2.29 736,577 $2.28 to $2.76 $2.31 462,747 $2.31 1.09 456,287 $3.24 to $4.38 $3.86 363,223 $3.90 2.30 274,127 $4.50 to $5.20 $4.93 714,792 $4.90 2.79 336,833 $5.95 to $6.28 $6.07 80,417 $6.13 2.93 36,806 $7.17 to $7.55 $7.39 662,417 $7.51 3.91 144,139 $8.57 to $9.07 $8.98 217,667 $8.98 3.44 72,555 Options only 3,237,840 2,057,324 |
Schedule of Assumptions Used In Valuing Stock Options | The following table summarizes the assumptions the Company utilized to record compensation expense for stock options granted to employees during the period ended. July 31, April 30, 2019 2019 Expected life (years) 3 3.5 Expected volatility 46 % 50.1 % Risk-free interest rate 2.18 % 2.63 % Dividend yield 0.00 % 0.00 % Expected forfeiture rate n/a n/a |
Schedule of Stock Option Activity | A summary of the Company’s stock option activity for employees and directors during the three months ended July 31, 2019, is presented below: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Shares Price Term Value Balance Outstanding, April 30, 2019 3,408,154 $ 4.44 2.90 $ 6,880,644 Granted 30,000 4.12 — — Exercised (191,147 ) 1.88 — — Forfeited (9,167 ) 7.62 — — Expired — — — — Balance Outstanding, July 31, 2019 3,237,840 $ 4.57 2.90 $ 6,880,644 Exercisable, July 31, 2019 2,057,324 $ 3.50 2.79 $ 5,130,588 |
Warrant [Member] | |
Schedule of Options and Warrants by Exercise Price Range | ALL WARRANTS EXERCISABLE WARRANTS Weighted Weighted Weighted Average Outstanding Average Average Exercisable Exercise Exercise No. of Exercise Remaining Life No. of Price Price Warrants Price In Years Warrants $1.86 $1.86 88,710 $1.86 0.09 88,710 $2.28 $2.28 32,359 $2.28 0.10 32,359 $4.89 $4.89 50,000 $4.89 4.70 — $5.85 $5.85 92,049 $5.85 4.27 92,049 $6.00 $6.00 200,000 $6.00 4.60 200,000 $6.87 $6.87 224,174 $6.87 2.99 224,174 687,292 637,292 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Jul. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue | The following table represents our revenues disaggregated by the nature and timing of services: Three Months Ended July 31, 2019 2018 Tuition - recognized over period of instruction $ 9,290,952 $ 6,633,840 Course fees - recognized over period of instruction 925,954 461,211 Book fees - recognized at a point in time 20,785 24,214 Exam fees - recognized at a point in time 60,100 52,240 Service fees - recognized at a point in time 60,191 49,800 $ 10,357,982 $ 7,221,305 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Jul. 31, 2019 | |
Lessee Disclosure [Abstract] | |
Schedule of Maturities of Operating Lease Liabilities | The following is a schedule by years of future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of July 31, 2019. Lease Payments Maturity of Lease Liabilities 2020 (remaining) $ 1,693,602 2021 2,293,382 2022 2,225,348 2023 1,663,434 2024 1,474,175 2025 1,134,718 2026 and beyond 779,287 Total future minimum lease payments 11,263,946 Less imputed interest (3,067,840 ) Present value of operating lease liabilities $ 8,196,106 |
Schedule of Balance Sheet Information Related to Leases | Balance Sheet Classification Operating lease liabilities, current $ 1,100,411 Operating lease liabilities, long-term 7,095,695 Total operating lease liabilities $ 8,196,106 |
Schedule of Other Information Related to Leases | Other Information Weighted average remaining lease term (in years) 5.3 Weighted average discount rate 12.0 % |
Nature of Operations and Liqu_2
Nature of Operations and Liquidity (Liquidity) (Details) - USD ($) | Mar. 06, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | Apr. 30, 2019 | Nov. 05, 2018 |
Product Information [Line Items] | |||||
Approximate cash position | $ 7,243,580 | $ 10,423,660 | $ 9,519,352 | ||
Restricted cash | 452,021 | $ 448,400 | |||
Cash used in operating activities | 1,685,083 | 3,388,210 | |||
Cash used during period | $ 2,272,151 | $ 4,188,899 | |||
Loan Agreements [Member] | Leon and Toby Cooperman Family Foundation [Member] | |||||
Product Information [Line Items] | |||||
Proceeds from debt | $ 10,000,000 | ||||
Commitment fee percentage, payable quarterly | 1.00% | ||||
Loan Agreement One [Member] | |||||
Product Information [Line Items] | |||||
Loan agreement principal amount | $ 5,000,000 | ||||
Loan Agreement Two [Member] | |||||
Product Information [Line Items] | |||||
Loan agreement principal amount | $ 5,000,000 | ||||
Revolving Credit Facility [Member] | |||||
Product Information [Line Items] | |||||
Line of credit maximum borrowing capacity | $ 5,000,000 |
Significant Accounting Polici_4
Significant Accounting Policies (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Apr. 30, 2019 | |
Cash equivalents | |||
Cash insured by FDIC | 250,000 | 250,000 | |
Amount of cash balance uninsured by FDIC | 7,323,630 | 9,359,208 | |
Marketing and promotional costs | 2,209,239 | $ 2,187,456 | |
Long term accounts receivable | 4,249,969 | 3,085,243 | |
Restricted cash | 452,021 | 448,400 | |
Letter of credit issued by bank | 71,932 | ||
Right of use lease asset | 7,996,585 | ||
Right of use lease liability | $ 7,095,695 | ||
Employee Stock Option [Member] | |||
Antidilutive securities | 3,237,840 | 3,515,070 | |
Warrant [Member] | |||
Antidilutive securities | 687,292 | 650,847 | |
Unvested Restricted Stock [Member] | |||
Antidilutive securities | 99,803 | 0 | |
Convertible Debt [Member] [Default Label] | |||
Antidilutive securities | 4,167 | 4,167 | |
Convertible debt | $ 50,000 | $ 50,000 | |
Sales Revenue, Net [Member] | Non-US [Member] | |||
Percentage of revenues from students outside the United States | 1.48% | 1.90% | |
Letter of Credit [Member] | |||
Restricted cash | $ 122,262 | ||
Letter of credit issued by bank | $ 257,827 |
Significant Accounting Polici_5
Significant Accounting Policies (Schedule of Property and Equipment Useful Lives) (Details) | 3 Months Ended |
Jul. 31, 2019 | |
Call center equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 5 years |
Computer And Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 5 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 7 years |
Library (online) [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 3 years |
Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 5 years |
Property and Equipment (Schedul
Property and Equipment (Schedule of Property and Equipment) (Details) - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 6,771,928 | $ 6,216,864 |
Accumulated depreciation | (2,083,277) | (1,825,524) |
Total property and equipment, net | 4,688,651 | 4,391,340 |
Call center equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 245,715 | 193,774 |
Computer And Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 330,267 | 327,621 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,430,349 | 1,381,271 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,765,597 | $ 4,314,198 |
Property and Equipment (Sched_2
Property and Equipment (Schedule of Software, Net) (Details) - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 |
Property, Plant and Equipment [Line Items] | ||
Intangible asset, gross | $ 8,266,667 | $ 8,541,667 |
Intangible asset, net | 145,063 | 161,930 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Intangible asset, gross | 4,765,597 | 4,314,198 |
Accumulated depreciation | (1,517,765) | (1,351,193) |
Intangible asset, net | $ 3,247,832 | $ 2,963,005 |
Property and Equipment (Sched_3
Property and Equipment (Schedule Of Depreciation And Amortization Expense) (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Property and equipment: | ||
Depreciation and amortization Expense | $ 312,432 | $ 204,335 |
Software amortization Expense | $ 170,189 | $ 143,774 |
Property and Equipment (Sched_4
Property and Equipment (Schedule of Estimated Amortization Expense of Software) (Details) - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 |
Property, Plant and Equipment [Line Items] | ||
Intangible asset, net | $ 145,063 | $ 161,930 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
2020 | 689,009 | |
2021 | 854,804 | |
2022 | 765,330 | |
2023 | 605,091 | |
2024 | 315,809 | |
Thereafter | 17,789 | |
Intangible asset, net | $ 3,247,832 | $ 2,963,005 |
USU Goodwill and Intangibles (N
USU Goodwill and Intangibles (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Apr. 30, 2019 | |
Goodwill recognized | $ 5,011,432 | $ 5,011,432 | |
Educacion Significativa, LLC [Member] | |||
Amortization of intangible assets | $ 275,000 | $ 275,000 |
USU Goodwill and Intangibles (S
USU Goodwill and Intangibles (Schedule of Intangible Assets) (Details) - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 |
Business Acquisition [Line Items] | ||
Intangible assets | $ 8,266,667 | $ 8,541,667 |
Intangible asset, net | 145,063 | 161,930 |
Educacion Significativa, LLC [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets | 10,100,000 | 10,100,000 |
Accumulated amortization | (1,833,333) | (1,558,333) |
Intangible asset, net | $ 8,266,667 | $ 8,541,667 |
Courseware and Accreditation (N
Courseware and Accreditation (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | Apr. 30, 2019 | |
Courseware [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Courseware costs capitalized | $ 1,525 | $ 34,422 | |
Amortization expense | 19,142 | $ 15,371 | |
Accreditation [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Courseware costs capitalized | $ 750 | $ 57,100 |
Courseware and Accreditation (S
Courseware and Accreditation (Schedule of Courseware, Net) (Details) - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | $ 8,266,667 | $ 8,541,667 |
Intangible asset, net | 145,063 | 161,930 |
Courseware [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | 324,512 | 325,987 |
Accreditation [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | 57,850 | 57,100 |
Courseware and Accreditation [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | (237,299) | (221,157) |
Intangible asset, net | $ 145,063 | $ 161,930 |
Courseware and Accreditation _2
Courseware and Accreditation (Schedule of Estimated Future Amortization Expense) (Details) - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, net | $ 145,063 | $ 161,930 |
Courseware and Accreditation [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
2020 | 44,847 | |
2021 | 37,100 | |
2022 | 29,213 | |
2023 | 23,673 | |
2024 | 10,171 | |
Thereafter | 59 | |
Intangible asset, net | $ 145,063 | $ 161,930 |
Debt (Details)
Debt (Details) - USD ($) | Mar. 06, 2019 | Nov. 05, 2018 | Feb. 09, 2012 | Feb. 28, 2019 | Feb. 29, 2012 |
Loan Agreements [Member] | |||||
Debt Instrument [Line Items] | |||||
Shares issued for convertible debt | 100,000 | ||||
Debt maturity period | 5 years | ||||
Warrants granted, exercise price | $ 6 | ||||
Loan Agreements [Member] | Warrant [Member] | |||||
Debt Instrument [Line Items] | |||||
Warrants issued as part of senior secured term loans | $ 360,516 | ||||
Closing costs of senior secured loans | $ 33,693 | ||||
Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit, maximum borrowing capacity | $ 5,000,000 | ||||
HEMG [Member] | |||||
Debt Instrument [Line Items] | |||||
Notes payable | $ 200,000 | ||||
Leon and Toby Cooperman Family Foundation [Member] | Loan Agreements [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 12.00% | ||||
Maturity date | Sep. 6, 2020 | ||||
Proceeds from debt | $ 10,000,000 | ||||
Commitment fee percentage, payable quarterly | 1.00% | ||||
Senior Secured Loans | $ 5,000,000 | ||||
One-time extension fee | 1.00% | ||||
Convertible Promissory Note Dated February 29, 2012 [Member] | |||||
Debt Instrument [Line Items] | |||||
Reverse stock split | one-for-12 | ||||
Face value of loan | $ 50,000 | ||||
2 Year Promissory Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 0.19% | ||||
Debt conversion, price per share | $ 12 | ||||
Credit Facility Agreement [Member] | Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity date | Nov. 4, 2021 | ||||
Line of credit, maximum borrowing capacity | $ 5,000,000 | ||||
Interest rate | 12.00% | ||||
Upfront payment of facility fee | $ 100,000 | ||||
Commitment fee percentage, payable quarterly | 2.00% | ||||
Common stock issuable from warrants | 92,049 | ||||
Warrant exercise price | $ 5.85 | ||||
Warrant term | 5 years | ||||
Fair value of warrants | $ 255,071 |
Stockholders' Equity (Preferred
Stockholders' Equity (Preferred Stock, Common Stock and Warrants Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Jun. 18, 2019 | Dec. 24, 2018 | Sep. 30, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Apr. 30, 2019 | Jun. 28, 2019 | Jun. 07, 2019 | Jun. 03, 2019 | |
Stockholders Equity [Line Items] | |||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |||||||
Common stock, shares authorized | 40,000,000 | 40,000,000 | |||||||
Proceeds from options exercised | $ 45,190 | $ 7,817 | |||||||
Common stock, shares issued | 18,913,527 | 18,665,551 | |||||||
Restricted stock issued, value | |||||||||
Payment of origination fees | $ 29,832 | ||||||||
Compensation cost of unvested shares yet to be recognized, period of recognition | 2 years | ||||||||
Per share price | $ 0.001 | $ 0.001 | |||||||
Investor [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Restricted shares granted | 25,000 | ||||||||
Restricted shares granted, value | $ 122,250 | ||||||||
Common Stock [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Restricted stock issued, shares | 104,803 | ||||||||
Restricted stock issued, value | $ 105 | ||||||||
Common Stock [Member] | Maximum [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Preferred stock, shares authorized | 250,000,000 | ||||||||
Common Stock [Member] | Minimum [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Preferred stock, shares authorized | 40,000,000 | ||||||||
Preferred Stock [Member] | Maximum [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Preferred stock, shares authorized | 10,000,000 | ||||||||
Preferred Stock [Member] | Minimum [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Preferred stock, shares authorized | 1,000,000 | ||||||||
Warrant [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Compensation cost of unvested shares yet to be recognized | $ 1,600,000 | ||||||||
Nonvested shares outstanding | 99,803 | ||||||||
Director [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Restricted stock issued, shares | 30,131 | ||||||||
Restricted stock issued, value | $ 122,332 | ||||||||
Former Director [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Common stock, shares issued | 9,806 | ||||||||
Former Director [Member] | Warrant [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Common stock, shares issued | 21,930 | ||||||||
Chairman and Chief Executive Officer [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Common stock, shares issued | 9,597 | ||||||||
Restricted Stock [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Award vesting period | 36 months | ||||||||
Shares granted | 24,672 | ||||||||
Restricted Stock [Member] | Investor [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Number of shares vested | 5,000 | ||||||||
Restricted Stock [Member] | Andrew Kaplan Current Director [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Options granted | 5,131 | ||||||||
Restricted Stock [Member] | Two former directors [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Options granted | 25,000 | ||||||||
Restricted Stock [Member] | Director [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Restricted shares granted, value | $ 126,320 | ||||||||
Restricted Stock [Member] | Chief Financial Officer [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Restricted shares granted | 25,000 | ||||||||
Award vesting period | 36 months | ||||||||
Compensation cost of unvested shares yet to be recognized | $ 180,000 | ||||||||
Compensation cost of unvested shares yet to be recognized, period of recognition | 36 months | ||||||||
Market price of company stock | $ 7.15 | ||||||||
Warrant Transaction One [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Stock issued during period from exercise of warrants | 101,894 | ||||||||
Warrant Transaction Two [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Stock issued during period from exercise of warrants | 19,403 | ||||||||
Proceeds from exercise of warrants | $ 43,860 | ||||||||
Warrant Transaction Three [Member] | |||||||||
Stockholders Equity [Line Items] | |||||||||
Stock issued during period from exercise of warrants | 21,876 | ||||||||
Proceeds from exercise of warrants | $ 45,190 |
Stockholders' Equity (Stock Opt
Stockholders' Equity (Stock Options Narrative) (Details) - USD ($) | May 13, 2019 | Jul. 31, 2019 | Dec. 13, 2018 | Mar. 13, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 1,576,081 | |||
Weighted average recognition period | 2 years | |||
Share based compensation expense | $ 498,417 | |||
Non-qualified stock options to certain former directors [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted | 30,000 | |||
Options term | P5Y | |||
Exercisable price per share | $ 4.12 | |||
Equity Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity Incentive Plan, shares authorized | 500,000 | 3,500,000 | ||
Equity Incentive Plan, available shares remaining for issuance | 229,238 | |||
Shares remaining available for future issuance | 10,852 |
Stockholders' Equity (Schedule
Stockholders' Equity (Schedule of Warrants) (Details) - Warrant [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Jul. 31, 2019 | Apr. 30, 2019 | |
Number of Shares | ||
Balance Outstanding, April 30, 2019 | 731,152 | |
Granted | ||
Exercised | (43,860) | |
Surrendered | ||
Expired | ||
Balance Outstanding, July 31, 2019 | 687,292 | 731,152 |
Exercisable, July 31, 2019 | 637,292 | |
Weighted Average Exercise Price | ||
Balance Outstanding, April 30, 2019 | $ 5.28 | |
Granted | ||
Exercised | ||
Surrendered | ||
Expired | ||
Balance Outstanding, July 31, 2019 | 5.47 | $ 5.28 |
Exercisable, July 31, 2019 | $ 5.52 | |
Weighted Average Remaining Contractual Term | ||
Balance Outstanding, April 30, 2019 | 3 years 2 months 27 days | 3 years 3 months 15 days |
Exercisable, July 31, 2019 | 3 years 1 month 16 days | |
Aggregate Intrinsic Value | ||
Balance Outstanding, April 30, 2019 | $ 413,296 | |
Balance Outstanding, July 31, 2019 | 244,286 | $ 413,296 |
Exercisable, July 31, 2019 | $ 244,286 |
Stockholders' Equity (Schedul_2
Stockholders' Equity (Schedule of All Warrants and Exercisable Warrants) (Details) | 3 Months Ended |
Jul. 31, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL WARRANTS, Outstanding No. of Warrants | shares | 3,237,840 |
EXERCISABLE WARRANTS, Exercisable No. of Warrants | shares | 2,057,324 |
Warrant [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL WARRANTS, Outstanding No. of Warrants | shares | 687,292 |
EXERCISABLE WARRANTS, Exercisable No. of Warrants | shares | 637,292 |
Warrant [Member] | $1.86 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL WARRANTS, Exercise Price Upper Range | $ 1.86 |
ALL WARRANTS, Weighted Average Exercise Price | $ 1.86 |
ALL WARRANTS, Outstanding No. of Warrants | shares | 88,710 |
EXERCISABLE WARRANTS, Weighted Average Exercise Price | $ 1.86 |
EXERCISABLE WARRANTS, Weighted Average Remaining Life In Years | 1 month 2 days |
EXERCISABLE WARRANTS, Exercisable No. of Warrants | shares | 88,710 |
Warrant [Member] | $2.28 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL WARRANTS, Exercise Price Upper Range | $ 2.28 |
ALL WARRANTS, Weighted Average Exercise Price | $ 2.28 |
ALL WARRANTS, Outstanding No. of Warrants | shares | 32,359 |
EXERCISABLE WARRANTS, Weighted Average Exercise Price | $ 2.28 |
EXERCISABLE WARRANTS, Weighted Average Remaining Life In Years | 1 month 6 days |
EXERCISABLE WARRANTS, Exercisable No. of Warrants | shares | 32,359 |
Warrant [Member] | $4.89 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL WARRANTS, Exercise Price Upper Range | $ 4.89 |
ALL WARRANTS, Weighted Average Exercise Price | $ 4.89 |
ALL WARRANTS, Outstanding No. of Warrants | shares | 50,000 |
EXERCISABLE WARRANTS, Weighted Average Exercise Price | $ 4.89 |
EXERCISABLE WARRANTS, Weighted Average Remaining Life In Years | 4 years 8 months 12 days |
EXERCISABLE WARRANTS, Exercisable No. of Warrants | shares | |
Warrant [Member] | $5.85 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL WARRANTS, Exercise Price Upper Range | $ 5.85 |
ALL WARRANTS, Weighted Average Exercise Price | $ 5.85 |
ALL WARRANTS, Outstanding No. of Warrants | shares | 92,049 |
EXERCISABLE WARRANTS, Weighted Average Exercise Price | $ 5.85 |
EXERCISABLE WARRANTS, Weighted Average Remaining Life In Years | 4 years 3 months 8 days |
EXERCISABLE WARRANTS, Exercisable No. of Warrants | shares | 92,049 |
Warrant [Member] | $6.00 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL WARRANTS, Exercise Price Upper Range | $ 6 |
ALL WARRANTS, Weighted Average Exercise Price | $ 6 |
ALL WARRANTS, Outstanding No. of Warrants | shares | 200,000 |
EXERCISABLE WARRANTS, Weighted Average Exercise Price | $ 6 |
EXERCISABLE WARRANTS, Weighted Average Remaining Life In Years | 4 years 7 months 6 days |
EXERCISABLE WARRANTS, Exercisable No. of Warrants | shares | 200,000 |
Warrant [Member] | $6.87 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL WARRANTS, Exercise Price Upper Range | $ 6.87 |
ALL WARRANTS, Weighted Average Exercise Price | $ 6.87 |
ALL WARRANTS, Outstanding No. of Warrants | shares | 224,174 |
EXERCISABLE WARRANTS, Weighted Average Exercise Price | $ 6.87 |
EXERCISABLE WARRANTS, Weighted Average Remaining Life In Years | 2 years 11 months 26 days |
EXERCISABLE WARRANTS, Exercisable No. of Warrants | shares | 224,174 |
Stockholders' Equity (Schedul_3
Stockholders' Equity (Schedule of Assumptions Used to Value Stock Options) (Details) - Stock Incentive Plan and Stock Option Grants to Employees and Directors [Member] | 3 Months Ended | 12 Months Ended |
Jul. 31, 2019 | Apr. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (years) | 3 years | 3 years 6 months |
Expected volatility | 46.00% | 50.10% |
Risk-free interest rate | 2.18% | 2.63% |
Dividend yield | 0.00% | 0.00% |
Expected forfeiture rate |
Stockholders' Equity (Schedul_4
Stockholders' Equity (Schedule of Stock Options Activity) (Details) | 3 Months Ended |
Jul. 31, 2019USD ($)$ / sharesshares | |
Number of Shares | |
Balance Outstanding, July 31, 2019 | 3,237,840 |
Exercisable, July 31, 2019 | 2,057,324 |
Stock Incentive Plan and Stock Option Grants to Employees and Directors [Member] | |
Number of Shares | |
Balance Outstanding, April 30, 2019 | 3,408,154 |
Granted | 30,000 |
Exercised | (191,147) |
Forfeited | (9,167) |
Expired | |
Balance Outstanding, July 31, 2019 | 3,237,840 |
Exercisable, July 31, 2019 | 2,057,324 |
Weighted Average Exercise Price | |
Balance Outstanding, April 30, 2019 | $ / shares | $ 4.44 |
Granted | $ / shares | 4.12 |
Exercised | $ / shares | 1.88 |
Forfeited | $ / shares | 7.62 |
Expired | $ / shares | |
Balance Outstanding, July 31, 2019 | $ / shares | 4.57 |
Exercisable, July 31, 2019 | $ / shares | $ 3.50 |
Weighted Average Remaining Contractual Term | |
Balance Outstanding, April 30, 2019 | 2 years 10 months 25 days |
Balance Outstanding, July 31, 2019 | 2 years 10 months 25 days |
Exercisable, July 31, 2019 | 2 years 9 months 14 days |
Aggregate Intrinsic Value | |
Balance Outstanding, April 30, 2019 | $ | $ 6,880,644 |
Granted | $ | |
Forfeited | $ | |
Balance Outstanding, July 31, 2019 | $ | 6,880,644 |
Exercisable, July 31, 2019 | $ | $ 5,130,588 |
Stockholders' Equity (Schedul_5
Stockholders' Equity (Schedule of All Options and Exercisable Options) (Details) | 3 Months Ended |
Jul. 31, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL OPTIONS, Outstanding No. of Options | shares | 3,237,840 |
EXERCISABLE OPTIONS, Exercisable No. of Options | shares | 2,057,324 |
$1.57 to $2.10 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL OPTIONS, Exercise Price Lower Range | $ 1.57 |
ALL OPTIONS, Exercise Price Upper Range | 2.10 |
ALL OPTIONS, Weighted Average Exercise Price | $ 1.98 |
ALL OPTIONS, Outstanding No. of Options | shares | 736,577 |
EXERCISABLE OPTIONS, Weighted Average Exercise Price | $ 1.98 |
EXERCISABLE OPTIONS, Weighted Average Remaining Life In Years | 2 years 3 months 15 days |
EXERCISABLE OPTIONS, Exercisable No. of Options | shares | 736,577 |
$2.28 to $2.76 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL OPTIONS, Exercise Price Lower Range | $ 2.28 |
ALL OPTIONS, Exercise Price Upper Range | 2.76 |
ALL OPTIONS, Weighted Average Exercise Price | $ 2.31 |
ALL OPTIONS, Outstanding No. of Options | shares | 462,747 |
EXERCISABLE OPTIONS, Weighted Average Exercise Price | $ 2.31 |
EXERCISABLE OPTIONS, Weighted Average Remaining Life In Years | 1 year 1 month 2 days |
EXERCISABLE OPTIONS, Exercisable No. of Options | shares | 456,287 |
$3.24 to $4.38 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL OPTIONS, Exercise Price Lower Range | $ 3.24 |
ALL OPTIONS, Exercise Price Upper Range | 4.38 |
ALL OPTIONS, Weighted Average Exercise Price | $ 3.86 |
ALL OPTIONS, Outstanding No. of Options | shares | 363,223 |
EXERCISABLE OPTIONS, Weighted Average Exercise Price | $ 3.90 |
EXERCISABLE OPTIONS, Weighted Average Remaining Life In Years | 2 years 3 months 19 days |
EXERCISABLE OPTIONS, Exercisable No. of Options | shares | 274,127 |
$4.50 to $5.20 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL OPTIONS, Exercise Price Lower Range | $ 4.50 |
ALL OPTIONS, Exercise Price Upper Range | 5.20 |
ALL OPTIONS, Weighted Average Exercise Price | $ 4.93 |
ALL OPTIONS, Outstanding No. of Options | shares | 714,792 |
EXERCISABLE OPTIONS, Weighted Average Exercise Price | $ 4.90 |
EXERCISABLE OPTIONS, Weighted Average Remaining Life In Years | 2 years 9 months 14 days |
EXERCISABLE OPTIONS, Exercisable No. of Options | shares | 336,833 |
$5.95 to $6.28 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL OPTIONS, Exercise Price Lower Range | $ 5.95 |
ALL OPTIONS, Exercise Price Upper Range | 6.28 |
ALL OPTIONS, Weighted Average Exercise Price | $ 6.07 |
ALL OPTIONS, Outstanding No. of Options | shares | 80,417 |
EXERCISABLE OPTIONS, Weighted Average Exercise Price | $ 6.13 |
EXERCISABLE OPTIONS, Weighted Average Remaining Life In Years | 2 years 11 months 4 days |
EXERCISABLE OPTIONS, Exercisable No. of Options | shares | 36,806 |
$7.17 to $7.55 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL OPTIONS, Exercise Price Lower Range | $ 7.17 |
ALL OPTIONS, Exercise Price Upper Range | 7.55 |
ALL OPTIONS, Weighted Average Exercise Price | $ 7.39 |
ALL OPTIONS, Outstanding No. of Options | shares | 662,417 |
EXERCISABLE OPTIONS, Weighted Average Exercise Price | $ 7.51 |
EXERCISABLE OPTIONS, Weighted Average Remaining Life In Years | 3 years 10 months 28 days |
EXERCISABLE OPTIONS, Exercisable No. of Options | shares | 144,139 |
$8.57 to $9.07 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
ALL OPTIONS, Exercise Price Lower Range | $ 8.57 |
ALL OPTIONS, Exercise Price Upper Range | 9.07 |
ALL OPTIONS, Weighted Average Exercise Price | $ 8.98 |
ALL OPTIONS, Outstanding No. of Options | shares | 217,667 |
EXERCISABLE OPTIONS, Weighted Average Exercise Price | $ 8.98 |
EXERCISABLE OPTIONS, Weighted Average Remaining Life In Years | 3 years 5 months 9 days |
EXERCISABLE OPTIONS, Exercisable No. of Options | shares | 72,555 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Apr. 30, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Deferred revenue | $ 2,681,037 | $ 2,456,865 | |
Refunds due students | $ 1,591,632 | $ 1,174,501 | |
Sales Revenue, Net [Member] | Non-US [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of revenues from students outside the United States | 1.48% | 1.90% |
Revenue (Schedule of Disaggrega
Revenue (Schedule of Disaggregated Revenue) (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 10,357,982 | $ 7,221,305 |
Tuition [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 9,290,952 | 6,633,840 |
Course Fees [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 925,954 | 461,211 |
Book Fees [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 20,785 | 24,214 |
Exam Fees [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 60,100 | 52,240 |
Service Fees [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 60,191 | $ 49,800 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Jul. 31, 2019 | Apr. 30, 2019 | Jul. 31, 2018 | |
Lessee Disclosure [Abstract] | |||
Lease expense | $ 612,597 | ||
Right of use lease asset | 7,996,585 | ||
Operating lease liabilities | $ 1,100,411 | $ 500,000 |
Leases (Schedule of Maturities
Leases (Schedule of Maturities of Lease Liabilities) (Details) | Jul. 31, 2019USD ($) |
Operating leases | |
2020 (remaining) | $ 1,693,602 |
2021 | 2,293,382 |
2022 | 2,225,348 |
2023 | 1,663,434 |
2024 | 1,474,175 |
2025 | 1,134,718 |
2026 and beyond | 779,287 |
Total future minimum lease payments | 11,263,946 |
Less imputed interest | (3,067,840) |
Total operating lease liabilities | $ 8,196,106 |
Leases (Schedule of Balance She
Leases (Schedule of Balance Sheet Information Related to Leases) (Details) - USD ($) | Jul. 31, 2019 | Apr. 30, 2019 | Jul. 31, 2018 |
Operating leases | |||
Operating lease liabilities current | $ 1,100,411 | $ 500,000 | |
Operating lease liabilities, long-term | 7,095,695 | ||
Total operating lease liabilities | $ 8,196,106 |
Leases (Schedule of Other Infor
Leases (Schedule of Other Information Related to Leases) (Details) | Jul. 31, 2019 |
Lessee Disclosure [Abstract] | |
Weighted average remaining lease term (in years) | 5 years 3 months 19 days |
Weighted average discount rate | 12.00% |
Subsequent Events (Details)
Subsequent Events (Details) | Aug. 20, 2019shares |
Subsequent Event [Member] | Former Director [Member] | |
Subsequent Event [Line Items] | |
Stock issued from exercise of stock options | 17,382 |