Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 15, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Legacy Education Alliance, Inc. | |
Entity Central Index Key | 1,561,880 | |
Trading Symbol | LEAI | |
Amendment Flag | true | |
Amendment Description | Legacy Education Alliance, Inc., the “Company,” is filing this Amendment No. 1 on Form 10-Q/A (this “Amendment”) to amend and restate in their entirety the following items of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017 (the “Original Form 10-Q”): (i) Item 1 of Part I “Financial Information,” (ii) Item 2 of Part I, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” (iii) Item 4 of Part I, “Controls and Procedures,” and (iv) Item 6 of Part II, “Exhibits.” We have also updated the signature page, the certifications of our Chief Executive Officer and Chief Financial Officer in Exhibits 31.1, 31.2, 32.1 and 32.2, and our financial statements formatted in Extensible Business Reporting Language (XBRL) in Exhibits 101. No other sections were affected, but for the convenience of the reader, this report on Form 10-Q/A restates in its entirety, as amended, our Original Form 10-Q. This Amendment should be read in conjunction with the Original Form 10-Q and the Company’s other filings with the Securities and Exchange Commission (the “SEC”). Except as stated herein, this Amendment does not reflect events occurring after the filing of the Original Form 10-Q with the SEC on May 15, 2017 and no attempt has been made in this Amendment to modify or update other disclosures as presented in the Original Form 10-Q. We have determined that our previously reported results for the quarter ended March 31, 2017 overstated Revenue, understated Direct Course Expense, Total Operating Costs and Expenses, overstated Income from Operations, Income Before Income Taxes, Net Income, Basic and Diluted Earnings Per Share, on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) and Deferred Course Expenses, Total Current Assets, Total Assets, understated Deferred Revenue (current portion), Total Current Liabilities, and Total Liabilities on the Condensed Consolidated Balance Sheets (Unaudited). We have made necessary conforming changes in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” resulting from the correction of these errors. | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 22,630,927 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 2,973 | $ 1,711 |
Restricted cash | 3,669 | 3,148 |
Deferred course expenses | 9,784 | 9,067 |
Prepaid expenses and other current assets | 3,707 | 3,458 |
Inventory | 363 | 348 |
Total current assets | 20,496 | 17,732 |
Property and equipment, net | 1,179 | 1,130 |
Deferred tax asset, net | 1,508 | 1,295 |
Other assets | 286 | 207 |
Total assets | 23,469 | 20,364 |
Current liabilities: | ||
Accounts payable | 3,226 | 3,344 |
Royalties payable | 322 | 175 |
Accrued course expenses | 2,296 | 1,082 |
Accrued salaries, wages and benefits | 857 | 840 |
Other accrued expenses | 2,406 | 2,052 |
Long-term debt, current portion | 11 | 11 |
Deferred revenue, current portion | 56,118 | 54,389 |
Total current liabilities | 65,236 | 61,893 |
Long-term debt, net of current portion | 28 | 31 |
Deferred revenue, net of current portion | 688 | 235 |
Other liabilities | 248 | 379 |
Total liabilities | 66,200 | 62,538 |
Commitments and contingencies (Note 10) | ||
Stockholders' deficit: | ||
Preferred stock, $0.0001 par value, 20,000,000 shares authorized, none issued | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized, 22,630,927 and 22,630,927 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 2 | 2 |
Additional paid-in capital | 11,124 | 11,073 |
Cumulative foreign currency translation adjustment | 2,370 | 2,668 |
Accumulated deficit | (56,227) | (55,917) |
Total stockholders' deficit | (42,731) | (42,174) |
Total liabilities and stockholders' deficit | $ 23,469 | $ 20,364 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 22,630,927 | 22,630,927 |
Common stock, shares outstanding | 22,630,927 | 22,630,927 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Revenue | $ 21,965 | $ 22,738 |
Operating costs and expenses: | ||
Direct course expenses | 12,863 | 11,654 |
Advertising and sales expenses | 4,591 | 5,267 |
Royalty expenses | 893 | 973 |
General and administrative expenses | 4,341 | 4,059 |
Total operating costs and expenses | 22,688 | 21,953 |
Income (loss) from operations | (723) | 785 |
Other income (expense): | ||
Interest expense, net | 3 | 3 |
Other income (expense), net | 83 | (179) |
Total other income (expense), net | 80 | (182) |
Income (loss) before income taxes | (643) | 603 |
Income tax benefit (expense) | 333 | (10) |
Net income (loss) | $ (310) | $ 593 |
Basic earnings (loss) per common share | $ (0.01) | $ 0.03 |
Diluted earnings (loss) per common share | $ (0.01) | $ 0.03 |
Basic weighted average common shares outstanding | 22,631 | 20,961 |
Diluted weighted average common shares outstanding | 22,631 | 21,846 |
Comprehensive income/(loss): | ||
Net income (loss) | $ (310) | $ 593 |
Foreign currency translation adjustments, net of tax of $0 | (298) | 485 |
Total comprehensive income (loss) | $ (608) | $ 1,078 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations and Comprehensive Income Loss (Unaudited) (Parenthetical) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Income Statement [Abstract] | |
Foreign currency translation adjustments | $ 0 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Changes in Stockholders' Deficit (Unaudited) - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Cumulative foreign currency translation adjustment | Accumulated deficit |
Balance at Dec. 31, 2016 | $ (42,174) | $ 2 | $ 11,073 | $ 2,668 | $ (55,917) |
Balance, Shares at Dec. 31, 2016 | 22,631 | ||||
Share-based compensation expense | 51 | 51 | |||
Foreign currency translation adjustment, net of tax of $0 | (298) | (298) | |||
Net Loss (Restated) | (310) | (310) | |||
Balance at Mar. 31, 2017 | $ (42,731) | $ 2 | $ 11,124 | $ 2,370 | $ (56,227) |
Balance (Restated), Shares at Mar. 31, 2017 | 22,631 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Changes in Stockholders' Deficit (Unaudited) (Parenthetical) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Foreign currency translation adjustments | $ 0 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income (loss) | $ (310) | $ 593 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 33 | 39 |
Gain on change in fair value of derivatives | (72) | (5) |
Share-based compensation | 51 | 37 |
Deferred income taxes | (555) | |
Changes in operating assets and liabilities: | ||
Restricted cash | (502) | (454) |
Deferred course expenses | (717) | (54) |
Prepaid expenses and other receivable | (229) | (261) |
Inventory | (12) | 30 |
Other assets | (27) | |
Accounts payable-trade | (143) | 1,509 |
Royalties payable | 146 | 144 |
Accrued course expenses | 1,205 | 628 |
Accrued salaries, wages and benefits | 16 | (271) |
Other accrued expenses | 432 | (589) |
Deferred revenue | 1,832 | (1,034) |
Other liabilities | 212 | |
Net cash provided by operating activities | 1,360 | 312 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (81) | (20) |
Net cash used in investing activities | (81) | (20) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Principal payments on debt | (3) | (2) |
Net cash used in financing activities | (3) | (2) |
Effect of exchange rate differences on cash | (14) | 513 |
Net increase in cash and cash equivalents | 1,262 | 803 |
Cash and cash equivalents, beginning of period | 1,711 | 4,881 |
Cash and cash equivalents, end of period | 2,973 | 5,684 |
Supplemental disclosures: | ||
Cash paid during the period for interest | 3 | 3 |
Cash paid during the period for income taxes, net of refunds received |
General
General | 3 Months Ended |
Mar. 31, 2017 | |
General [Abstract] | |
General | Note 1 - General Business Description. Rich Dad Poor Dad. Martin Roberts, The Independent Woman, Women in Wealth, Brick Buy Brick Elite Business Star Basis of Presentation. The accompanying unaudited condensed consolidated financial statements presented herein are for us and our consolidated subsidiaries, each of which is a wholly-owned subsidiary. The accompanying condensed consolidated balance sheet as of December 31, 2016 was derived from our audited consolidated financial statements and does not include all disclosures required under United States of America generally accepted accounting principles (“U.S. GAAP”), for annual financial statements. All significant intercompany transactions have been eliminated. These interim financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 and reflect all normal recurring adjustments that are, in the opinion of management, necessary to present fairly our results of operations and financial position. Amounts reported in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) are not necessarily indicative of amounts expected for the respective annual periods or any other interim period. Significant Accounting Policies. Note 2 - Significant Accounting Policies Use of Estimates. Income Tax in Interim Periods. Losses from jurisdictions for which no benefit can be realized and the income tax effects of unusual and infrequent items are excluded from the estimated annual effective tax rate. Valuation allowances are provided against the future tax benefits that arise from the losses in jurisdictions for which no benefit can be realized. The effects of unusual and infrequent items are recognized in the impacted interim period as discrete items. The estimated annual effective tax rate may be affected by nondeductible expenses and by our projected earnings mix by tax jurisdiction. Adjustments to the estimated annual effective income tax rate are recognized in the period during which such estimates are revised. We have established valuation allowances against our deferred tax assets, including net operating loss carryforwards and income tax credits. Valuation allowances take into consideration our expected ability to realize these deferred tax assets and reduce the value of such assets to the amount that is deemed more likely than not to be realizable. Our ability to realize these deferred tax assets is dependent on achieving our forecast of future taxable operating income over an extended period of time. We review our forecast in relation to actual results and expected trends on a quarterly basis. A change in our valuation allowance would impact our income tax expense/benefit and our stockholders’ deficit and could have a significant impact on our results of operations or financial condition in future periods. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
New Accounting Pronouncements [Abstract] | |
New Accounting Pronouncements | Note 2 - New Accounting Pronouncements Adoption of Accounting Standards We have implemented all new accounting pronouncements that are in effect and that management believes would materially affect our financial statements. New Accounting Standards In January 2017, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2017-01, “ Business Combinations, In November 2016, the FASB issued ASU 2016-18, “ Statement of Cash Flows: Restricted Cash, In October 2016, the FASB issued ASU 2016-16, “ Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory, In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments In March 2016, FASB issued ASU No 2016-09 “ Compensation – Stock compensation In February 2016, the FASB issued ASU No 2016-02 “Leases” (Topic 842) In January 2016, the FASB issued ASU No 2016-01, “ Recognition and Measurement of Financial Assets and Financial Liabilities,” Financial Instruments – Overall (Subtopic 825-10) |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | Note 3 - Share-Based Compensation We account for share-based awards under the provisions of ASC 718, “ Compensation—Stock Compensation Share-based compensation expenses related to our restricted stock grants were $51.0 thousand and $37.0 thousand for the three months ended March 31, 2017 and 2016, respectively, which are reported as a separate line item in the condensed consolidated statement of changes in stockholders’ deficit. See Note 6 - Share-Based Compensation |
Earnings Per Share ("EPS") (Res
Earnings Per Share ("EPS") (Restated) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share ("EPS") (Restated) [Abstract] | |
Earnings Per Share ("EPS") (Restated) | Note 4 - Earnings Per Share (“EPS”) (Restated) Basic EPS is computed by dividing net income by the basic weighted-average number of shares outstanding during the period. Diluted EPS is computed by dividing net income by the diluted weighted-average number of shares outstanding during the period and, accordingly, reflects the potential dilution that could occur if securities or other agreements to issue common stock, such as stock options, were exercised, settled or converted into common stock and were dilutive. The diluted weighted-average number of shares used in our diluted EPS calculation is determined using the treasury stock method. Unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as our restricted stock awards, are considered to be participating securities, and therefore, the two-class method is used for purposes of calculating EPS. Under the two-class method, a portion of net income is allocated to these participating securities and is excluded from the calculation of EPS allocated to common stock. Our restricted stock awards are subject to forfeiture and restrictions on transfer until vested and have identical voting, income and distribution rights to the unrestricted common shares outstanding. Our weighted average unvested restricted stock awards outstanding were 1,346,746 and 885,486 for the three months ended March 31, 2017 and 2016, respectively. The calculations of basic and diluted EPS are as follows: Three Months Ended March 31, 2017 Three Months Ended March 31, 2016 Net Loss Weighted Average Shares Outstanding Loss Net Income Weighted Average Shares Outstanding Earnings (in thousands, except per share data) (in thousands, except per share data) Basic: As reported $ (310 ) 22,631 $ 593 21,846 Amounts allocated to unvested restricted shares (24 ) (885 ) Amounts available to common stockholders $ (310 ) 22,631 $ (0.01 ) $ 569 20,961 $ 0.03 Diluted: Amounts allocated to unvested restricted shares — 24 — Non participating share units 885 Amounts reallocated to unvested restricted shares — — — Amounts available to stockholders and assumed conversions $ (310 ) 22,631 $ (0.01 ) $ 593 21,846 $ 0.03 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 5 - Fair Value Measurements ASC 820, “Fair Value Measurements and Disclosures” ASC 820 defines fair value as 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 on the measurement date. ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. In accordance with ASC 820, these two types of inputs have created the following fair value hierarchy: ● Level 1-Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets; ● Level 2-Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including: ● Quoted prices for similar assets or liabilities in active markets ● Quoted prices for identical or similar assets or liabilities in markets that are not active ● Inputs other than quoted prices that are observable for the asset or liability ● Inputs that are derived principally from or corroborated by observable market data by correlation or other means; and ● Level 3-Inputs that are unobservable and reflect our assumptions used in pricing the asset or liability based on the best information available under the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows). The following table presents the derivative financial instruments, our only financial liabilities measured and recorded at fair value on our condensed consolidated balance sheets on a recurring basis, and their level within the fair value hierarchy as of March 31, 2017 and December 31, 2016: Fair Value Measurements at Amount Quoted Significant Significant As of March 31, 2017 Warrant derivative liabilities $ 37,008 $ - $ - $ 37,008 As of December 31, 2016 Warrant derivative liabilities $ 108,809 $ - $ - $ 108,809 Financial Instruments. See Note – 6 Derivative Liability, |
Derivative Liability
Derivative Liability | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Liability [Abstract] | |
Derivative Liability | Note 6 - Derivative Liability In June 2015, we granted warrants to purchase 959,924 shares of the Company’s common stock through a private offering of units (“Units”). Each Unit included one share of Common Stock, par value $0.0001 per share, and a three-year Warrant to purchase one share of Common Stock at an initial exercise price per share equal to $0.75, subject to adjustment for certain corporate transactions such as a merger, stock-split or stock dividend and, if the Company does not continue to be a reporting company under the Securities Exchange Act of 1934 during the two-year period after closing, the exercise price will be reduced to $0.01 per share. Each Unit includes limited registration rights for the investors for the shares of Common Stock and the shares of Common Stock that would be issued upon the exercise of a Warrant ("Underlying Shares") when and if we register our shares of Common Stock in a different offering, subject to certain excluded registered offerings. The Company has also issued to the placement agent warrants to purchase our shares of Common Stock equal to 10% of the total shares sold in the offering, or 95,992 shares. Because these warrants have full reset adjustments that would preclude the instrument from being considered as index to the Company’s stock, it is subject to derivative liability treatment under ASC 815-40-15 Key assumptions used to determine the fair value of the warrants follows: At Issuance March 31, 2017 December 31, 2016 Market value of stock on measurement date $ 0.55 $ 0.42 $ 0.42 Risk-free interest rate 1.12 % 1.03 % 1.20 % Dividend yield 0 % 0 % 0 % Volatility factor 55 % 66.4 % 68.8 % Term 3 years 1.25 years 1.5 years As of March 31, 2017 and December 31, 2016, the fair value of the total warrants' derivative liability is $37,008 and $108,809, respectively, and recorded in other accrued expenses in the Condensed Consolidated Balance Sheets. We recognized a gain on the derivative liability of $71,801 and $5,186 for the three months ended March 31, 2017 and 2016, which is recorded in other income, net in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The following table summarizes the derivative liability included in other accrued expenses in the Condensed Consolidated Balance Sheets: Balance at December 31, 2016 $ 108,809 Gain on change of fair value (71,801 ) Balance at March 31, 2017 $ 37,008 The following table summarizes information about warrants outstanding as of March 31, 2017: Total # of warrants issued and outstanding 1,055,916 Weighted-average exercise price $ 0.75 Remaining life (in years) 1.25 |
Income Taxes (Restated)
Income Taxes (Restated) | 3 Months Ended |
Mar. 31, 2017 | |
Income Taxes (Restated) [Abstract] | |
Income Taxes (Restated) | Note 7 - Income Taxes (Restated) The company recorded an income tax benefit of $333.0 thousand and an income tax expense of $10.0 thousand for the three months ended March 31, 2017 and 2016, respectively. Our effective tax rate was (51.8)% and 1.7% for the three months ended March 31, 2017 and 2016, respectively. Our effective tax rates differed from the U.S. statutory corporate tax rate of 35.0% primarily because of the mix of pre-tax income or loss earned in certain jurisdictions and the change in our valuation allowance. During the three months ended December 31, 2016, we determined that valuation allowances against U.S. and U.K. (Rich Dad Education Limited only) deferred taxes were no longer required. Release of these valuation allowances resulted in a $2.4 million tax benefit, partially offset by tax on current period book income and other permanent and timing differences resulting in an income tax benefit. Release of the valuation allowances decreased our effective tax rate by 83.1%. We record a valuation allowance when it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. As of March 31, 2017 and December 31, 2016, valuation allowances of $4.5 million have been provided against net operating loss carryforwards and other deferred tax assets. Our valuation allowance decreased by $0.5 million for the three months ended March 31, 2016. There was no change in valuation allowance during the three months ended March 31, 2017. As of March 31, 2017 and December 31, 2016, we had total unrecognized tax benefits of $1.7 million, related to foreign and domestic tax positions. Of this amount, the Company estimates that $0.6 million, of the unrecognized tax benefits, if recognized, would impact the effective tax rate. A substantial portion of our liability for uncertain tax benefits is recorded as a reduction of net operating losses and tax credit carryforwards. During the three months ended March 31, 2017 and 2016, we had no material changes in uncertain tax positions. We record interest and penalties related to unrecognized tax benefits within the provision for income taxes. We believe that no current tax positions that have resulted in unrecognized tax benefits will significantly increase or decrease within one year. We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. The company was notified by the Internal Revenue Service that its federal income tax returns for the years 2013-2015 were selected for examination. The company believes its provision for income taxes is adequate; however any assessment would affect the company’s results of operations and possibly cash flows. We were also notified by the Canadian Revenue Agency that our 2014-2016 goods and services tax (GST) and harmonized sales tax (HST) returns are being audited. |
Concentration of Risk
Concentration of Risk | 3 Months Ended |
Mar. 31, 2017 | |
Concentration of Risk [Abstract] | |
Concentration of Risk | Note 8 - Concentration of Risk Cash and cash equivalents Revenue. A significant portion of our revenue is derived from the Rich Dad brands. Revenue derived from the Rich Dad brands as a percentage of total revenue was 73.0% and 74.0% for the three months ended March 31, 2017 and 2016, respectively. In addition, we have operations in the U.S., Canada, the United Kingdom and other foreign markets (see Note 9 — Segment Information |
Segment Information (Restated)
Segment Information (Restated) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Information (Restated) [Abstract] | |
Segment Information (Restated) | Note 9 - Segment Information (Restated) We manage our business in four operating segments based on geographic location for which operating managers are responsible to the Chief Operations Officer. As such, operating results, as reported below, are reviewed regularly by our Chief Operating Officer, or Chief Operating Decision Maker (“CODM”) and other members of the executive team. The proportion of our total revenue attributable to each segment is as follows: Three Months Ended As a percentage of total revenue 2017 2016 U.S. 54.8 % 63.4 % Canada 2.9 % 5.1 % U.K. 24.4 % 22.2 % Other foreign markets 17.9 % 9.3 % Total consolidated revenue 100 % 100 % Operating results for the segments are as follows: Three Months Ended Segment revenue 2017 2016 (In thousands) United States $ 12,044 $ 14,424 Canada 638 1,155 U.K. 5,355 5,049 Other foreign markets 3,928 2,110 Total consolidated revenue $ 21,965 $ 22,738 Three Months Ended 2017 2016 Segment gross profit contribution * (In thousands) United States $ 1,593 $ 3,706 Canada (40 ) 195 U.K. 1,770 1,479 Other foreign markets 295 (536 ) Total consolidated gross profit $ 3,618 $ 4,844 * Segment gross profit is calculated as revenue less direct course expenses, advertising and sales expenses and royalty expense. Three Months Ended 2017 2016 Depreciation and amortization expenses (In thousands) United States $ 28 $ 33 Canada 1 1 U.K. 4 5 Other foreign markets — — Total consolidated depreciation and amortization expenses $ 33 $ 39 March 31, December 31, 2017 2016 Segment identifiable assets (In thousands) United States $ 12,011 $ 12,331 Canada 827 730 U.K. 9,618 3,508 Other foreign markets 1,013 3,795 Total consolidated identifiable assets $ 23,469 $ 20,364 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 10 - Commitments and Contingencies Licensing agreements Custodial and Counterparty Risk . We are subject to custodial and other potential forms of counterparty risk in respect to a variety of contractual and operational matters. In the course of ongoing Company-wide risk assessment, management monitors our arrangements that involve potential counterparty risk, including the custodial risk associated with amounts prepaid to certain vendors and deposits with credit card and other payment processors. Deposits held by our credit card processors at March 31, 2017 and December 31, 2016, were $3.6 million and $3.1 million, respectively. These balances are included on the Condensed Consolidated Balance Sheets in restricted cash. While these balances reside in major financial institutions, they are only partially covered by federal deposit insurance and are subject to the financial risk of the parties holding these funds. When appropriate, we utilize Certificate of Deposit Account Registry Service (CDARS) to reduce banking risk for a portion of our cash in the United States. A CDAR consists of numerous individual investments, all below the FDIC limits, thus fully insuring that portion of our cash. At March 31, 2017 and December 31, 2016, we did not have a CDAR balance. Purchase commitments Litigation. A substantial settlement payment or judgment in excess of our accruals could have a material adverse effect on our financial position, results of operations or cash flows. While the outcome of these proceedings cannot be predicted with certainty, we do not expect any of these existing matters, individually or in the aggregate, to have a material adverse effect upon our financial position, results of operations or cash flows. There have been no material changes to the legal proceedings disclosed in the litigation section of Note 15 - Commitments and Contingencies Watson v. Whitney Education Group, Inc. Russ Whitney, United Mortgage Corporation, Gulfstream Realty and Development, Inc. Douglas Realty, Inc. and Paradise Title Services, Inc. th Huron River Area Credit Union v. Jeffrey Watson/ Watson v. Whitney Education Group, Inc. and Russell Whitney Huron River Area Credit Union v. Jeffrey Watson/ Watson v. Whitney Education Group, Inc. and Russell Whitney, th |
Restatements
Restatements | 3 Months Ended |
Mar. 31, 2017 | |
Restatements [Abstract] | |
Restatements | Note 11 - Restatements The Company is restating its Condensed Consolidated Balance Sheet as of March 31, 2017, and the Condensed Consolidated Statement of Operations and Comprehensive Income (Loss), Condensed Consolidated Statement of Changes in Stockholders' Deficit, and Condensed Consolidated Statement of Cash Flow for the period ended March 31, 2017. The restatement shows the previously filed financial statements, the restatement adjustments and as restated columns for the Condensed Consolidated Balance Sheet as of March 31, 2017, and the Condensed Consolidated Statement of Operations and Comprehensive Income (Loss), Condensed Consolidated Statement of Changes in Stockholders' Deficit, and Condensed Consolidated Statement of Cash Flow for the period ended March 31, 2017. The restatement of our financial statements in this Form 10-Q/A reflects the correction of certain identified errors related to revenue, deferred revenue, and deferred expenses that affected the timing of our recognition of revenue and deferred transactions that impacted the first quarter of 2017. The errors relate to our assessment of revenue recognition, deferred revenue, and deferred expenses associated with our student attendance (i.e. fulfillment) and expired contracts. The restatement also reflects the correction of errors related to the income tax effects of such revenue errors as well as the correction of certain other tax items in the quarter ended March 31, 2017. The following table represents the Condensed Consolidated Balance Sheet as previously reported, restatement adjustments, and as restated as of March 31, 2017: LEGACY EDUCATION ALLIANCE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share data) As Previously Reported Restatement Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 2,973 $ $ 2,973 Restricted cash 3,669 3,669 Deferred course expenses 9,818 (34 ) 9,784 Prepaid expenses and other current assets 3,707 3,707 Inventory 363 363 Total current assets 20,530 (34 ) 20,496 Property and equipment, net 1,179 1,179 Deferred tax asset, net 1,497 11 1,508 Other assets 286 286 Total assets $ 23,492 $ (23 ) $ 23,469 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 3,226 $ $ 3,226 Royalties payable 322 322 Accrued course expenses 2,296 2,296 Accrued salaries, wages and benefits 857 857 Other accrued expenses 2,406 2,406 Long-term debt, current portion 11 11 Deferred revenue, current portion 55,268 850 56,118 Total current liabilities 64,386 850 65,236 Long-term debt, net of current portion 28 28 Deferred revenue, net of current portion 688 688 Other liabilities 591 (343 ) 248 Total liabilities 65,693 507 66,200 Commitments and contingencies (Note 10) Stockholders’ deficit: Preferred stock, $0.0001 par value, 20,000,000 shares authorized, none issued — — — Common stock, $0.0001 par value, 200,000,000 shares authorized, 22,630,927 and 22,630,927 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively 2 2 Additional paid-in capital 11,124 11,124 Cumulative foreign currency translation adjustment 2,370 2,370 Accumulated deficit (55,697 ) (530 ) (56,227 ) Total stockholders’ deficit (42,201 ) (530 ) (42,731 ) Total liabilities and stockholders’ deficit $ 23,492 $ (23 ) $ 23,469 The following table represents the Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) as previously reported, restatement adjustments, and as restated as of March 31, 2017: LEGACY EDUCATION ALLIANCE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) (In thousands, except per share data) Three Months Ended March 31, 2017 As Previously Reported Restatement Adjustments As Restated Revenue $ 22,815 $ (850 ) $ 21,965 Operating costs and expenses: Direct course expenses 12,829 34 12,863 Advertising and sales expenses 4,591 4,591 Royalty expenses 893 893 General and administrative expenses 4,341 4,341 Total operating costs and expenses 22,654 34 22,688 Income (loss) from operations 161 (884 ) (723 ) Other income (expense): Interest expense, net (3 ) (3 ) Other income, net 83 83 Total other income, net 80 80 Income (loss) before income taxes 241 (884 ) (643 ) Income tax benefit (expense) (21 ) 354 333 Net income (loss) $ 220 $ (530 ) $ (310 ) Basic earnings (loss) per common share $ 0.01 $ (0.02 ) $ (0.01 ) Diluted earnings (loss) per common share $ 0.01 $ (0.02 ) $ (0.01 ) Basic weighted average common shares outstanding 21,284 22,631 Diluted weighted average common shares outstanding 22,631 22,631 Comprehensive income/(loss): Net income (loss) $ 220 $ (530 ) $ (310 ) Foreign currency translation adjustments, net of tax of $0 (298 ) (298 ) Total comprehensive income (loss) $ (78 ) $ (530 ) $ (608 ) The following table represents the Condensed Consolidated Statement of Changes in Stockholders' Deficit as previously reported, restatement adjustments, and as restated as of March 31, 2017: LEGACY EDUCATION ALLIANCE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT (Unaudited) (In thousands) Additional Cumulative Total Total Common stock paid-in foreign Accumulated stockholder stockholder Shares Amount capital adjustment deficit deficit deficit As Previously Restatement As reported Adjustments Restated Balance at December 31, 2016 22,631 $ 2 $ 11,073 $ 2,668 $ (55,917 ) $ (42,174 ) - $ (42,174 ) Share-based compensation expense — — 51 — — 51 - 51 Foreign currency translation adjustment, net of tax of $0 — — — (298 ) — (298 ) - (298 ) Net Income (loss) — — — — 220 220 (530 ) (310 ) Balance at March 31, 2017 (Restated) 22,631 $ 2 $ 11,124 $ 2,370 $ (55,697 ) $ (42,201 ) (530 ) $ (42,731 ) The following table represents the Condensed Consolidated Statement of Cash Flow as previously reported, restatement adjustments, and as restated as of March 31, 2017: LEGACY EDUCATION ALLIANCE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Three Months Ended March 31, As As previously Restatement As previously reported Adjustments Restated reported 2017 2017 2017 2016 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 220 $ (530 ) $ (310 ) $ 593 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 33 33 39 Gain on change in fair value of derivatives (72 ) (72 ) (5 ) Share-based compensation 51 51 37 Deferred income taxes (201 ) (354 ) (555 ) — Changes in operating assets and liabilities: Restricted cash (502 ) (502 ) (454 ) Deferred course expenses (751 ) 34 (717 ) (54 ) Prepaid expenses and other receivable (229 ) (229 ) (261 ) Inventory (12 ) (12 ) 30 Other assets (27 ) (27 ) — Accounts payable-trade (143 ) (143 ) 1,509 Royalties payable 146 146 144 Accrued course expenses 1,205 1,205 628 Accrued salaries, wages and benefits 16 16 (271 ) Other accrued expenses 432 432 (589 ) Deferred revenue 982 850 1,832 (1,034 ) Other liabilities 212 212 — Net cash provided by operating activities 1,360 - 1,360 312 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (81 ) (81 ) (20 ) Net cash used in investing activities (81 ) - (81 ) (20 ) CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on debt (3 ) (3 ) (2 ) Net cash used in financing activities (3 ) - (3 ) (2 ) Effect of exchange rate differences on cash (14 ) (14 ) 513 Net increase in cash and cash equivalents 1,262 - 1,262 803 Cash and cash equivalents, beginning of period $ 1,711 $ - $ 1,711 $ 4,881 Cash and cash equivalents, end of period $ 2,973 $ - $ 2,973 $ 5,684 |
General (Policies)
General (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
General [Abstract] | |
Basis of Presentation | Basis of Presentation. The accompanying unaudited condensed consolidated financial statements presented herein are for us and our consolidated subsidiaries, each of which is a wholly-owned subsidiary. The accompanying condensed consolidated balance sheet as of December 31, 2016 was derived from our audited consolidated financial statements and does not include all disclosures required under United States of America generally accepted accounting principles (“U.S. GAAP”), for annual financial statements. All significant intercompany transactions have been eliminated. These interim financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 and reflect all normal recurring adjustments that are, in the opinion of management, necessary to present fairly our results of operations and financial position. Amounts reported in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) are not necessarily indicative of amounts expected for the respective annual periods or any other interim period. |
Significant Accounting Policies | Significant Accounting Policies. Note 2 - Significant Accounting Policies |
Use of Estimates | Use of Estimates. |
Income Tax in Interim Periods | Income Tax in Interim Periods. Losses from jurisdictions for which no benefit can be realized and the income tax effects of unusual and infrequent items are excluded from the estimated annual effective tax rate. Valuation allowances are provided against the future tax benefits that arise from the losses in jurisdictions for which no benefit can be realized. The effects of unusual and infrequent items are recognized in the impacted interim period as discrete items. The estimated annual effective tax rate may be affected by nondeductible expenses and by our projected earnings mix by tax jurisdiction. Adjustments to the estimated annual effective income tax rate are recognized in the period during which such estimates are revised. We have established valuation allowances against our deferred tax assets, including net operating loss carryforwards and income tax credits. Valuation allowances take into consideration our expected ability to realize these deferred tax assets and reduce the value of such assets to the amount that is deemed more likely than not to be realizable. Our ability to realize these deferred tax assets is dependent on achieving our forecast of future taxable operating income over an extended period of time. We review our forecast in relation to actual results and expected trends on a quarterly basis. A change in our valuation allowance would impact our income tax expense/benefit and our stockholders’ deficit and could have a significant impact on our results of operations or financial condition in future periods. |
Earnings Per Share ("EPS") (R21
Earnings Per Share ("EPS") (Restated) (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share ("EPS") (Restated) [Abstract] | |
Schedule of calculations of basic and diluted EPS | Three Months Ended March 31, 2017 Three Months Ended March 31, 2016 Net Loss Weighted Average Shares Outstanding Loss Net Income Weighted Average Shares Outstanding Earnings (in thousands, except per share data) (in thousands, except per share data) Basic: As reported $ (310 ) 22,631 $ 593 21,846 Amounts allocated to unvested restricted shares (24 ) (885 ) Amounts available to common stockholders $ (310 ) 22,631 $ (0.01 ) $ 569 20,961 $ 0.03 Diluted: Amounts allocated to unvested restricted shares — 24 — Non participating share units 885 Amounts reallocated to unvested restricted shares — — — Amounts available to stockholders and assumed conversions $ (310 ) 22,631 $ (0.01 ) $ 593 21,846 $ 0.03 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements [Abstract] | |
Schedule of fair value measurements on recurring basis | Fair Value Measurements at Amount Quoted Significant Significant As of March 31, 2017 Warrant derivative liabilities $ 37,008 $ - $ - $ 37,008 As of December 31, 2016 Warrant derivative liabilities $ 108,809 $ - $ - $ 108,809 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Liability [Abstract] | |
Schedule of fair value of the warrants | At Issuance March 31, 2017 December 31, 2016 Market value of stock on measurement date $ 0.55 $ 0.42 $ 0.42 Risk-free interest rate 1.12 % 1.03 % 1.20 % Dividend yield 0 % 0 % 0 % Volatility factor 55 % 66.4 % 68.8 % Term 3 years 1.25 years 1.5 years |
Schedule of derivative liability | Balance at December 31, 2016 $ 108,809 Gain on change of fair value (71,801 ) Balance at March 31, 2017 $ 37,008 |
Schedule of warrants outstanding | Total # of warrants issued and outstanding 1,055,916 Weighted-average exercise price $ 0.75 Remaining life (in years) 1.25 |
Segment Information (Restated)
Segment Information (Restated) (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Information (Restated) [Abstract] | |
Schedule of percentage of total revenue | Three Months Ended As a percentage of total revenue 2017 2016 U.S. 54.8 % 63.4 % Canada 2.9 % 5.1 % U.K. 24.4 % 22.2 % Other foreign markets 17.9 % 9.3 % Total consolidated revenue 100 % 100 % |
Schedule of operating results for the segments | Three Months Ended Segment revenue 2017 2016 (In thousands) United States $ 12,044 $ 14,424 Canada 638 1,155 U.K. 5,355 5,049 Other foreign markets 3,928 2,110 Total consolidated revenue $ 21,965 $ 22,738 Three Months Ended 2017 2016 Segment gross profit contribution * (In thousands) United States $ 1,593 $ 3,706 Canada (40 ) 195 U.K. 1,770 1,479 Other foreign markets 295 (536 ) Total consolidated gross profit $ 3,618 $ 4,844 * Segment gross profit is calculated as revenue less direct course expenses, advertising and sales expenses and royalty expense. |
Schedule of depreciation and amortization expenses | Three Months Ended 2017 2016 Depreciation and amortization expenses (In thousands) United States $ 28 $ 33 Canada 1 1 U.K. 4 5 Other foreign markets — — Total consolidated depreciation and amortization expenses $ 33 $ 39 |
Schedule of segment identifiable assets | March 31, December 31, 2017 2016 Segment identifiable assets (In thousands) United States $ 12,011 $ 12,331 Canada 827 730 U.K. 9,618 3,508 Other foreign markets 1,013 3,795 Total consolidated identifiable assets $ 23,469 $ 20,364 |
Restatements (Tables)
Restatements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Restatements [Abstract] | |
Summary of changes made to restatement | The following table represents the Condensed Consolidated Balance Sheet as previously reported, restatement adjustments, and as restated as of March 31, 2017: As Previously Reported Restatement Adjustments As Restated ASSETS Current assets: Cash and cash equivalents $ 2,973 $ $ 2,973 Restricted cash 3,669 3,669 Deferred course expenses 9,818 (34 ) 9,784 Prepaid expenses and other current assets 3,707 3,707 Inventory 363 363 Total current assets 20,530 (34 ) 20,496 Property and equipment, net 1,179 1,179 Deferred tax asset, net 1,497 11 1,508 Other assets 286 286 Total assets $ 23,492 $ (23 ) $ 23,469 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 3,226 $ $ 3,226 Royalties payable 322 322 Accrued course expenses 2,296 2,296 Accrued salaries, wages and benefits 857 857 Other accrued expenses 2,406 2,406 Long-term debt, current portion 11 11 Deferred revenue, current portion 55,268 850 56,118 Total current liabilities 64,386 850 65,236 Long-term debt, net of current portion 28 28 Deferred revenue, net of current portion 688 688 Other liabilities 591 (343 ) 248 Total liabilities 65,693 507 66,200 Commitments and contingencies (Note 10) Stockholders’ deficit: Preferred stock, $0.0001 par value, 20,000,000 shares authorized, none issued — — — Common stock, $0.0001 par value, 200,000,000 shares authorized, 22,630,927 and 22,630,927 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively 2 2 Additional paid-in capital 11,124 11,124 Cumulative foreign currency translation adjustment 2,370 2,370 Accumulated deficit (55,697 ) (530 ) (56,227 ) Total stockholders’ deficit (42,201 ) (530 ) (42,731 ) Total liabilities and stockholders’ deficit $ 23,492 $ (23 ) $ 23,469 The following table represents the Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) as previously reported, restatement adjustments, and as restated as of March 31, 2017: Three Months Ended March 31, 2017 As Previously Reported Restatement Adjustments As Restated Revenue $ 22,815 $ (850 ) $ 21,965 Operating costs and expenses: Direct course expenses 12,829 34 12,863 Advertising and sales expenses 4,591 4,591 Royalty expenses 893 893 General and administrative expenses 4,341 4,341 Total operating costs and expenses 22,654 34 22,688 Income (loss) from operations 161 (884 ) (723 ) Other income (expense): Interest expense, net (3 ) (3 ) Other income, net 83 83 Total other income, net 80 80 Income (loss) before income taxes 241 (884 ) (643 ) Income tax benefit (expense) (21 ) 354 333 Net income (loss) $ 220 $ (530 ) $ (310 ) Basic earnings (loss) per common share $ 0.01 $ (0.02 ) $ (0.01 ) Diluted earnings (loss) per common share $ 0.01 $ (0.02 ) $ (0.01 ) Basic weighted average common shares outstanding 21,284 22,631 Diluted weighted average common shares outstanding 22,631 22,631 Comprehensive income/(loss): Net income (loss) $ 220 $ (530 ) $ (310 ) Foreign currency translation adjustments, net of tax of $0 (298 ) (298 ) Total comprehensive income (loss) $ (78 ) $ (530 ) $ (608 ) The following table represents the Condensed Consolidated Statement of Changes in Stockholders' Deficit as previously reported, restatement adjustments, and as restated as of March 31, 2017: Additional Cumulative Total Total Common stock paid-in foreign Accumulated stockholder stockholder Shares Amount capital adjustment deficit deficit deficit As Previously Restatement As reported Adjustments Restated Balance at December 31, 2016 22,631 $ 2 $ 11,073 $ 2,668 $ (55,917 ) $ (42,174 ) - $ (42,174 ) Share-based compensation expense — — 51 — — 51 - 51 Foreign currency translation adjustment, net of tax of $0 — — — (298 ) — (298 ) - (298 ) Net Income (loss) — — — — 220 220 (530 ) (310 ) Balance at March 31, 2017 (Restated) 22,631 $ 2 $ 11,124 $ 2,370 $ (55,697 ) $ (42,201 ) (530 ) $ (42,731 ) The following table represents the Condensed Consolidated Statement of Cash Flow as previously reported, restatement adjustments, and as restated as of March 31, 2017: Three Months Ended March 31, As As previously Restatement As previously reported Adjustments Restated reported 2017 2017 2017 2016 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 220 $ (530 ) $ (310 ) $ 593 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 33 33 39 Gain on change in fair value of derivatives (72 ) (72 ) (5 ) Share-based compensation 51 51 37 Deferred income taxes (201 ) (354 ) (555 ) — Changes in operating assets and liabilities: Restricted cash (502 ) (502 ) (454 ) Deferred course expenses (751 ) 34 (717 ) (54 ) Prepaid expenses and other receivable (229 ) (229 ) (261 ) Inventory (12 ) (12 ) 30 Other assets (27 ) (27 ) — Accounts payable-trade (143 ) (143 ) 1,509 Royalties payable 146 146 144 Accrued course expenses 1,205 1,205 628 Accrued salaries, wages and benefits 16 16 (271 ) Other accrued expenses 432 432 (589 ) Deferred revenue 982 850 1,832 (1,034 ) Other liabilities 212 212 — Net cash provided by operating activities 1,360 - 1,360 312 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (81 ) (81 ) (20 ) Net cash used in investing activities (81 ) - (81 ) (20 ) CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on debt (3 ) (3 ) (2 ) Net cash used in financing activities (3 ) - (3 ) (2 ) Effect of exchange rate differences on cash (14 ) (14 ) 513 Net increase in cash and cash equivalents 1,262 - 1,262 803 Cash and cash equivalents, beginning of period $ 1,711 $ - $ 1,711 $ 4,881 Cash and cash equivalents, end of period $ 2,973 $ - $ 2,973 $ 5,684 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-Based Compensation (Textual) | ||
Share-based compensation expenses | $ 51,000 | $ 37,000 |
Earnings Per Share ("EPS") (R27
Earnings Per Share ("EPS") (Restated) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Basic: | ||
Net Income (Loss) (Restated) | $ (310) | $ 593 |
Weighted average shares outstanding | 22,631 | 20,961 |
Amounts allocated to unvested restricted shares, Net Income (Loss) | (24,000) | |
Amounts allocated to unvested restricted shares, Weighted Average Shares Outstanding | (885,000) | |
Amounts available to common stockholders, Net Income (Loss) | $ (310) | $ 569 |
Amounts available to common stockholders, Weighted Average Shares Outstanding | 22,631,000 | 20,961,000 |
Amounts available to common stockholders, Loss Per Share | $ (0.01) | $ 0.03 |
Diluted: | ||
Amounts allocated to unvested restricted shares, Dilluted | $ 24 | |
Amounts allocated to unvested restricted shares, Weighted Average Shares Outstanding | ||
Non participating share units, Diluted | ||
Non participating share units, Weighted Average Shares Outstanding | 885,000 | |
Amounts reallocated to unvested restricted shares, Diluted | ||
Amounts reallocated to unvested restricted shares, Weighted Average Shares Outstanding | ||
Amounts available to stockholders and assumed conversions, Diluted | (310,000) | 593,000 |
Amounts available to stockholders and assumed conversions. Weighted Average Shares Outstanding | 22,631,000 | 21,846,000 |
Amounts available to stockholders and assumed conversions, Loss Per Share | $ (0.01) | $ 0.03 |
Earnings Per Share ("EPS") (R28
Earnings Per Share ("EPS") (Restated) (Details Textual) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share (Textual) | ||
Weighted average restricted stock awards outstanding shares | 885 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrant derivative liabilities | $ 37,008 | $ 108,809 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrant derivative liabilities | ||
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrant derivative liabilities | ||
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrant derivative liabilities | $ 37,008 | $ 108,809 |
Derivative Liability (Details)
Derivative Liability (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Market value of stock on measurement date | $ 0.42 | $ 0.42 |
Risk-free interest rate | 1.03% | 1.20% |
Dividend yield | 0.00% | 0.00% |
Volatility factor | 66.40% | 68.80% |
Term | 1 year 3 months | 1 year 6 months |
At Issuance [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Market value of stock on measurement date | $ 0.55 | |
Risk-free interest rate | 1.12% | |
Dividend yield | 0.00% | |
Volatility factor | 55.00% | |
Term | 3 years |
Derivative Liability (Details 1
Derivative Liability (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Derivative Liability [Abstract] | ||
Balance at December 31, 2016 | $ 108,809 | |
Gain on change of fair value | (71,801) | $ (5,186) |
Balance at March 31, 2017 | $ 37,008 |
Derivative Liability (Details 2
Derivative Liability (Details 2) | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Derivative Liability [Abstract] | |
Total # of warrants issued and outstanding | shares | 1,055,916 |
Weighted-average exercise price | $ / shares | $ 0.75 |
Remaining life (in years) | 1 year 3 months |
Derivative Liability (Details T
Derivative Liability (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jun. 30, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Derivative Liability (Textual) | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||
Number of shares issued in private placement | 959,924 | |||
Price per share | $ 0.01 | |||
Exercise price of warrant | $ 0.75 | |||
Warrant's derivative liability fair value | $ 37,008 | $ 108,809 | ||
Placement agent warrants description | The Company has also issued to the placement agent warrants to purchase our shares of Common Stock equal to 10% of the total shares sold in the offering, or 95,992 shares. | |||
Gain on derivative liability | $ 71,801 | $ 5,186 |
Income Taxes (Restated) (Detail
Income Taxes (Restated) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Income Taxes (Textual) | |||
Income tax expense | $ (333) | $ 10 | |
Effective income tax rate | (51.80%) | 1.70% | |
Effective tax rates, U.S. statutory corporate tax rate | 35.00% | ||
Deferred tax assets, valuation allowances | $ 2,400 | ||
Valuation allowances decreased, effective tax rate | 83.10% | ||
Valuation allowances | $ 4,500 | 4,500 | |
Changes in valuation allowance | $ 500 | ||
Unrecognized tax benefits | 1,700 | 1,700 | |
Unrecognized tax benefits that would impact effective tax rate | $ 600 | $ 600 |
Concentration of Risk (Details)
Concentration of Risk (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Concentration of Risk (Textual) | |||
Cash balances without FDIC | $ 2.4 | $ 1 | |
Percentage of revenue | 73.00% | 74.00% |
Segment Information (Restated36
Segment Information (Restated) (Details) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Total consolidated revenue | 73.00% | 74.00% |
Revenue [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated revenue | 100.00% | 100.00% |
Revenue [Member] | U.S. [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated revenue | 54.80% | 63.40% |
Revenue [Member] | Canada [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated revenue | 2.90% | 5.10% |
Revenue [Member] | U.K. [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated revenue | 24.40% | 22.20% |
Revenue [Member] | Other foreign markets [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated revenue | 17.90% | 9.30% |
Segment Information (Restated37
Segment Information (Restated) (Details 1) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Segment Reporting Information [Line Items] | |||
Total consolidated revenue | $ 21,965 | $ 22,738 | |
Total consolidated gross profit | [1] | 3,618 | 4,844 |
United States [Member] | |||
Segment Reporting Information [Line Items] | |||
Total consolidated revenue | 12,044 | 14,424 | |
Total consolidated gross profit | [1] | 1,593 | 3,706 |
Canada [Member] | |||
Segment Reporting Information [Line Items] | |||
Total consolidated revenue | 638 | 1,155 | |
Total consolidated gross profit | [1] | (40) | 195 |
U.K. [Member] | |||
Segment Reporting Information [Line Items] | |||
Total consolidated revenue | 5,355 | 5,049 | |
Total consolidated gross profit | [1] | 1,770 | 1,479 |
Other foreign markets [Member] | |||
Segment Reporting Information [Line Items] | |||
Total consolidated revenue | 3,928 | 2,110 | |
Total consolidated gross profit | [1] | $ 295 | $ (536) |
[1] | Segment gross profit is calculated as revenue less direct course expenses, advertising and sales expenses and royalty expense. |
Segment Information (Restated38
Segment Information (Restated) (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Total consolidated depreciation and amortization expenses | $ 33 | $ 39 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated depreciation and amortization expenses | 28 | 33 |
Canada [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated depreciation and amortization expenses | 1 | 1 |
U.K. [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated depreciation and amortization expenses | 4 | 5 |
Other foreign markets [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated depreciation and amortization expenses |
Segment Information (Restated39
Segment Information (Restated) (Details 3) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Segment Reporting Information [Line Items] | ||
Total consolidated identifiable assets | $ 23,469 | $ 20,364 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated identifiable assets | 12,011 | 12,331 |
Canada [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated identifiable assets | 827 | 730 |
U.K. [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated identifiable assets | 9,618 | 3,508 |
Other foreign markets [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated identifiable assets | $ 1,013 | $ 3,795 |
Segment Information (Restated40
Segment Information (Restated) (Details Textual) | 3 Months Ended |
Mar. 31, 2017Segments | |
Segment Information (Textual) | |
Number of operating segments | 4 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Feb. 06, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Commitments and Contingencies (Textual) | ||||
Royalty expenses | $ 893,000 | $ 973,000 | ||
Deposits held by credit card processors | 3,600,000 | $ 3,100,000 | ||
Non-cancelable purchase commitments | $ 400,000 | $ 700,000 | ||
Litigation settlement amount | $ 30,000 |
Restatements (Details)
Restatements (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 2,973 | $ 1,711 |
Restricted cash | 3,669 | 3,148 |
Deferred course expenses | 9,784 | 9,067 |
Prepaid expenses and other current assets | 3,707 | 3,458 |
Inventory | 363 | 348 |
Total current assets | 20,496 | 17,732 |
Property and equipment, net | 1,179 | 1,130 |
Deferred tax asset, net | 1,508 | 1,295 |
Other assets | 286 | 207 |
Total assets | 23,469 | 20,364 |
Current liabilities: | ||
Accounts payable | 3,226 | 3,344 |
Royalties payable | 322 | 175 |
Accrued course expenses | 2,296 | 1,082 |
Accrued salaries, wages and benefits | 857 | 840 |
Other accrued expenses | 2,406 | 2,052 |
Long-term debt, current portion | 11 | 11 |
Deferred revenue, current portion | 56,118 | 54,389 |
Total current liabilities | 65,236 | 61,893 |
Long-term debt, net of current portion | 28 | 31 |
Deferred revenue, net of current portion | 688 | 235 |
Other liabilities | 248 | 379 |
Total liabilities | 66,200 | 62,538 |
Commitments and contingencies (Note 10) | ||
Stockholders' deficit: | ||
Preferred stock, $0.0001 par value, 20,000,000 shares authorized, none issued | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized, 22,630,927 and 22,630,927 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 2 | 2 |
Additional paid-in capital | 11,124 | 11,073 |
Cumulative foreign currency translation adjustment | 2,370 | 2,668 |
Accumulated deficit | (56,227) | (55,917) |
Total stockholders' deficit | (42,731) | (42,174) |
Total liabilities and stockholders' deficit | 23,469 | 20,364 |
As Previously Reported [Member] | ||
Current assets: | ||
Cash and cash equivalents | 2,973 | 1,711 |
Restricted cash | 3,669 | |
Deferred course expenses | 9,818 | |
Prepaid expenses and other current assets | 3,707 | |
Inventory | 363 | |
Total current assets | 20,530 | |
Property and equipment, net | 1,179 | |
Deferred tax asset, net | 1,497 | |
Other assets | 286 | |
Total assets | 23,492 | |
Current liabilities: | ||
Accounts payable | 3,226 | |
Royalties payable | 322 | |
Accrued course expenses | 2,296 | |
Accrued salaries, wages and benefits | 857 | |
Other accrued expenses | 2,406 | |
Long-term debt, current portion | 11 | |
Deferred revenue, current portion | 55,268 | |
Total current liabilities | 64,386 | |
Long-term debt, net of current portion | 28 | |
Deferred revenue, net of current portion | 688 | |
Other liabilities | 591 | |
Total liabilities | 65,693 | |
Commitments and contingencies (Note 10) | ||
Stockholders' deficit: | ||
Preferred stock, $0.0001 par value, 20,000,000 shares authorized, none issued | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized, 22,630,927 and 22,630,927 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 2 | |
Additional paid-in capital | 11,124 | |
Cumulative foreign currency translation adjustment | 2,370 | |
Accumulated deficit | (55,697) | |
Total stockholders' deficit | (42,201) | (42,174) |
Total liabilities and stockholders' deficit | 23,492 | |
Restatement Adjustment [Member] | ||
Current assets: | ||
Cash and cash equivalents | ||
Restricted cash | ||
Deferred course expenses | (34) | |
Prepaid expenses and other current assets | ||
Inventory | ||
Total current assets | (34) | |
Property and equipment, net | ||
Deferred tax asset, net | 11 | |
Other assets | ||
Total assets | (23) | |
Current liabilities: | ||
Accounts payable | ||
Royalties payable | ||
Accrued course expenses | ||
Accrued salaries, wages and benefits | ||
Other accrued expenses | ||
Long-term debt, current portion | ||
Deferred revenue, current portion | 850 | |
Total current liabilities | 850 | |
Long-term debt, net of current portion | ||
Deferred revenue, net of current portion | ||
Other liabilities | (343) | |
Total liabilities | 507 | |
Commitments and contingencies (Note 10) | ||
Stockholders' deficit: | ||
Preferred stock, $0.0001 par value, 20,000,000 shares authorized, none issued | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized, 22,630,927 and 22,630,927 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | ||
Additional paid-in capital | ||
Cumulative foreign currency translation adjustment | ||
Accumulated deficit | (530) | |
Total stockholders' deficit | (530) | |
Total liabilities and stockholders' deficit | $ (23) |
Restatements (Details 1)
Restatements (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Revenue | $ 21,965 | $ 22,738 |
Operating costs and expenses: | ||
Direct course expenses | 12,863 | 11,654 |
Advertising and sales expenses | 4,591 | 5,267 |
Royalty expenses | 893 | 973 |
General and administrative expenses | 4,341 | 4,059 |
Total operating costs and expenses | 22,688 | 21,953 |
Income (loss) from operations | (723) | 785 |
Other income (expense): | ||
Interest expense, net | (3) | (3) |
Other income, net | 83 | (179) |
Total other income, net | 80 | (182) |
Income (loss) before income taxes | (643) | 603 |
Income tax benefit (expense) | (333) | 10 |
Net income (loss) | $ (310) | $ 593 |
Basic earnings (loss) per common share | $ (0.01) | $ 0.03 |
Diluted earnings (loss) per common share | $ (0.01) | $ 0.03 |
Basic weighted average common shares outstanding | 22,631 | 20,961 |
Diluted weighted average common shares outstanding | 22,631 | 21,846 |
Comprehensive income/(loss): | ||
Net Income (loss) | $ (310) | $ 593 |
Foreign currency translation adjustments, net of tax of $0 | (298) | 485 |
Total comprehensive income (loss) | (608) | 1,078 |
As Previously Reported [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Revenue | 22,815 | |
Operating costs and expenses: | ||
Direct course expenses | 12,829 | |
Advertising and sales expenses | 4,591 | |
Royalty expenses | 893 | |
General and administrative expenses | 4,341 | |
Total operating costs and expenses | 22,654 | |
Income (loss) from operations | 161 | |
Other income (expense): | ||
Interest expense, net | (3) | |
Other income, net | 83 | |
Total other income, net | 80 | |
Income (loss) before income taxes | 241 | |
Income tax benefit (expense) | (21) | |
Net income (loss) | $ 220 | 593 |
Basic earnings (loss) per common share | $ 0.01 | |
Diluted earnings (loss) per common share | $ 0.01 | |
Basic weighted average common shares outstanding | 21,284 | |
Diluted weighted average common shares outstanding | 22,631 | |
Comprehensive income/(loss): | ||
Net Income (loss) | $ 220 | $ 593 |
Foreign currency translation adjustments, net of tax of $0 | (298) | |
Total comprehensive income (loss) | (78) | |
Restatement Adjustment [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Revenue | (850) | |
Operating costs and expenses: | ||
Direct course expenses | 34 | |
Advertising and sales expenses | ||
Royalty expenses | ||
General and administrative expenses | ||
Total operating costs and expenses | 34 | |
Income (loss) from operations | (884) | |
Other income (expense): | ||
Interest expense, net | ||
Other income, net | ||
Total other income, net | ||
Income (loss) before income taxes | (884) | |
Income tax benefit (expense) | 354 | |
Net income (loss) | $ (530) | |
Basic earnings (loss) per common share | $ (0.02) | |
Diluted earnings (loss) per common share | $ (0.02) | |
Basic weighted average common shares outstanding | ||
Diluted weighted average common shares outstanding | ||
Comprehensive income/(loss): | ||
Net Income (loss) | $ (530) | |
Foreign currency translation adjustments, net of tax of $0 | ||
Total comprehensive income (loss) | $ (530) |
Restatements (Details 2)
Restatements (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Balance | $ (42,174) | |
Share-based compensation expense | 51 | |
Foreign currency translation adjustment, net of tax of $0 | (298) | $ 485 |
Net Income (loss) | (310) | 593 |
Balance | (42,731) | |
Common Stock [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Balance | $ 2 | |
Balance, Shares | 22,631 | |
Share-based compensation expense | ||
Foreign currency translation adjustment, net of tax of $0 | ||
Net Income (loss) | ||
Balance | $ 2 | |
Balance (Restated), Shares | 22,631 | |
Additional Paid-in Capital [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Balance | $ 11,073 | |
Share-based compensation expense | 51 | |
Foreign currency translation adjustment, net of tax of $0 | ||
Net Income (loss) | ||
Balance | 11,124 | |
Accumulated Translation Adjustment [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Balance | 2,668 | |
Share-based compensation expense | ||
Foreign currency translation adjustment, net of tax of $0 | (298) | |
Net Income (loss) | ||
Balance | 2,370 | |
Retained Earnings [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Balance | (55,917) | |
Share-based compensation expense | ||
Foreign currency translation adjustment, net of tax of $0 | ||
Net Income (loss) | (310) | |
Balance | (56,227) | |
As Previously Reported [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Balance | (42,174) | |
Share-based compensation expense | 51 | |
Foreign currency translation adjustment, net of tax of $0 | (298) | |
Net Income (loss) | 220 | $ 593 |
Balance | (42,201) | |
Restatement Adjustment [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Balance | ||
Foreign currency translation adjustment, net of tax of $0 | ||
Net Income (loss) | (530) | |
Balance | $ (530) |
Restatements (Details 3)
Restatements (Details 3) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ (310) | $ 593 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 33 | 39 |
Gain on change in fair value of derivatives | (72) | (5) |
Share-based compensation | 51 | 37 |
Deferred income taxes | (555) | |
Changes in operating assets and liabilities: | ||
Restricted cash | (502) | (454) |
Deferred course expenses | (717) | (54) |
Prepaid expenses and other receivable | (229) | (261) |
Inventory | (12) | 30 |
Other assets | (27) | |
Accounts payable-trade | (143) | 1,509 |
Royalties payable | 146 | 144 |
Accrued course expenses | 1,205 | 628 |
Accrued salaries, wages and benefits | 16 | (271) |
Other accrued expenses | 432 | (589) |
Deferred revenue | 1,832 | (1,034) |
Other liabilities | 212 | |
Net cash provided by operating activities | 1,360 | 312 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (81) | (20) |
Net cash used in investing activities | (81) | (20) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Principal payments on debt | (3) | (2) |
Net cash used in financing activities | (3) | (2) |
Effect of exchange rate differences on cash | (14) | 513 |
Net increase in cash and cash equivalents | 1,262 | 803 |
Cash and cash equivalents, beginning of period | 1,711 | 4,881 |
Cash and cash equivalents, end of period | 2,973 | 5,684 |
As Previously Reported [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | 220 | 593 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 33 | 39 |
Gain on change in fair value of derivatives | (72) | (5) |
Share-based compensation | 51 | 37 |
Deferred income taxes | (201) | |
Changes in operating assets and liabilities: | ||
Restricted cash | (502) | (454) |
Deferred course expenses | (751) | (54) |
Prepaid expenses and other receivable | (229) | (261) |
Inventory | (12) | (30) |
Other assets | (27) | |
Accounts payable-trade | (143) | 1,509 |
Royalties payable | 146 | 144 |
Accrued course expenses | 1,205 | 628 |
Accrued salaries, wages and benefits | 16 | (271) |
Other accrued expenses | 432 | (589) |
Deferred revenue | 982 | (1,034) |
Other liabilities | 212 | |
Net cash provided by operating activities | 1,360 | 312 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (81) | (20) |
Net cash used in investing activities | (81) | (20) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Principal payments on debt | (3) | (2) |
Net cash used in financing activities | (3) | (2) |
Effect of exchange rate differences on cash | (14) | 513 |
Net increase in cash and cash equivalents | 1,262 | 803 |
Cash and cash equivalents, beginning of period | 1,711 | 4,881 |
Cash and cash equivalents, end of period | 2,973 | $ 5,684 |
Restatement Adjustment [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | (530) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | ||
Gain on change in fair value of derivatives | ||
Share-based compensation | ||
Deferred income taxes | (354) | |
Changes in operating assets and liabilities: | ||
Restricted cash | ||
Deferred course expenses | 34 | |
Prepaid expenses and other receivable | ||
Inventory | ||
Other assets | ||
Accounts payable-trade | ||
Royalties payable | ||
Accrued course expenses | ||
Accrued salaries, wages and benefits | ||
Other accrued expenses | ||
Deferred revenue | 850 | |
Other liabilities | ||
Net cash provided by operating activities | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | ||
Net cash used in investing activities | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Principal payments on debt | ||
Net cash used in financing activities | ||
Effect of exchange rate differences on cash | ||
Net increase in cash and cash equivalents | ||
Cash and cash equivalents, beginning of period | ||
Cash and cash equivalents, end of period |
Restatements (Details Textual)
Restatements (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred Stock, Shares Issued | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 22,630,927 | 22,630,927 |
Common stock, shares outstanding | 22,630,927 | 22,630,927 |
Foreign currency translation adjustments | $ 0 |