Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity Central Index Key | 0001305323 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-34272 | ||
Entity Registrant Name | ZOVIO INC | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 59-3551629 | ||
Entity Address, Address Line One | 1811 E. Northrop Blvd. | ||
Entity Address, City or Town | Chandler | ||
Entity Address, State or Province | AZ | ||
Entity Address, Postal Zip Code | 85286 | ||
City Area Code | 858 | ||
Local Phone Number | 668-2586 | ||
Title of 12(b) Security | Common Stock $0.01 par value | ||
Trading Symbol | ZVO | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 46 | ||
Entity Common Stock, Shares Outstanding | 34,054,879 | ||
Auditor Name | Deloitte & Touche, LLP | ||
Auditor Location | Phoenix, Arizona | ||
Auditor Firm ID | 34 |
Nature of Business
Nature of Business | Aug. 03, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business Zovio Inc (the “Company”) is a Delaware corporation, and is an education technology services company that partners with higher education institutions and employers to deliver innovative, personalized solutions to help learners and leaders achieve their aspirations. Additionally, in April 2019, the Company acquired both Fullstack Academy, Inc. (“Fullstack”) and TutorMe.com, Inc. (“TutorMe”), each of which became wholly-owned subsidiaries of the Company at that time. On December 1, 2020, the Company and AU LLC finalized a definitive Asset Purchase and Sale Agreement (the “Purchase Agreement”), by and among the Company, AU LLC, the Arizona Board of Regents, a body corporate, for and on behalf of the University of Arizona (the “University of Arizona”), and the University of Arizona Global Campus, a newly formed Arizona nonprofit corporation (“Global Campus”). Upon the closing of the Purchase Agreement (the “Sale Transaction”), the Company and Ashford transferred to Global Campus the tangible and intangible academic and related operations and assets comprising the University to Global Campus. The resulting loss on transaction is recorded in the consolidated statements of income (loss). Following the closing of the Sale Transaction, Global Campus owns and operates the University in affiliation with the University of Arizona and with a focus on expanding access to education for non-traditional adult learners, and the Company provides services to Global Campus under a long-term Strategic Services Agreement (the “Services Agreement”). The services that the Company provides to Global Campus under the Services Agreement include recruiting, admissions, marketing, student finance, financial aid processing, and financial aid advising, program advising, student retention advising, support services for academics, information technology and institutional support. The majority of the Company's cash comes from the Services Agreement with Global Campus. The service fees in the Services Agreement are subject to certain minimum residual liability adjustments, including performance-based adjustments, minimum profit level adjustments, and excess direct cost adjustments. These adjustments are all variable in nature in that they depend upon the Company’s performance, and to a certain extent the performance of Global Campus, during each service period. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 28,265 | $ 35,462 |
Restricted Cash and Cash Equivalents, Current | 9,288 | 20,035 |
Investments | 974 | 1,515 |
Accounts Receivable, after Allowance for Credit Loss, Current | 9,631 | 7,204 |
Prepaid expenses and other current assets | 13,423 | 12,617 |
Total current assets | 61,581 | 76,833 |
Property and equipment, net | 26,382 | 30,575 |
Operating lease assets | 28,881 | 20,114 |
Goodwill and intangibles, net | 29,499 | 31,785 |
Other long-term assets | 2,691 | 1,999 |
Total assets | 149,034 | 161,306 |
Current liabilities: | ||
Accounts Payable and Accrued Liabilities, Current | 74,769 | 62,693 |
Contract with Customer, Liability, Current | 14,939 | 8,090 |
Total current liabilities | 89,708 | 70,783 |
Accrued Rent, Noncurrent | 34,205 | 24,125 |
Other Liabilities, Noncurrent | 5,115 | 7,181 |
Total liabilities | 129,028 | 102,089 |
Commitments and contingencies | ||
Preferred stock, $0.01 par value: | ||
20,000 shares authorized; zero shares issued and outstanding at December 31, 2021 and 2020 | 0 | 0 |
Common stock, $0.01 par value: | ||
300,000 shares authorized; 67,255 and 66,454 issued, and 33,546 and 32,267 outstanding, at December 31, 2021 and 2020, respectively | 676 | 668 |
Additional paid-in capital | 172,060 | 179,489 |
Retained Earnings (Accumulated Deficit) | 283,970 | 326,319 |
Treasury stock, 33,709 and 34,187 shares at cost at December 31, 2021 and 2020, respectively | (436,700) | (447,259) |
Total stockholders' equity | 20,006 | 59,217 |
Total liabilities and stockholders' equity | $ 149,034 | $ 161,306 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parenthetical - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Stockholders' equity: | ||
Preferred stock, par value per share | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 67,255,000 | 66,454,000 |
Common stock, shares outstanding | 33,546,000 | 32,267,000 |
Treasury stock, shares at cost | 33,709,000 | 34,187,000 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue and other revenue | $ 263,033 | $ 397,121 |
Costs and expenses: | ||
Technology and academic services | 70,663 | 74,412 |
Counseling services and support | 89,514 | 96,996 |
Marketing and communication | 85,328 | 91,620 |
General and administrative | 43,160 | 47,352 |
University-related expenses | 0 | 89,001 |
Legal expense | 14,335 | 0 |
Restructuring and impairment charges | 2,641 | 4,843 |
Loss on transaction | 0 | 54,797 |
Total costs and expenses | 305,641 | 459,021 |
Operating loss | (42,608) | (61,900) |
Other income (loss), net | 130 | (120) |
Loss before income taxes | (42,478) | (62,020) |
Income tax benefit | (129) | (13,068) |
Net loss | $ (42,349) | $ (48,952) |
Loss per share: | ||
Basic (in USD per share) | $ (1.27) | $ (1.53) |
Diluted (in USD per share) | $ (1.27) | $ (1.53) |
Weighted average number of common shares outstanding used in computing loss per share: | ||
Basic (in shares) | 33,256 | 31,959 |
Diluted (in shares) | 33,256 | 31,959 |
Revenue | ||
Revenue and other revenue | $ 253,099 | $ 40,053 |
University-related revenue | ||
Revenue and other revenue | 0 | 356,084 |
Other revenue | ||
Revenue and other revenue | $ 9,934 | $ 984 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock |
Balance, shares at Dec. 31, 2019 | 65,695 | ||||
Balance at Dec. 31, 2019 | $ 98,938 | $ 660 | $ 192,413 | $ 375,180 | $ (469,315) |
Balance (Accounting Standards Update 2016-13) at Dec. 31, 2019 | 91 | 91 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 8,291 | 8,291 | |||
Exercise of stock options, shares, net | 22 | ||||
Exercise of stock options | 8 | $ 1 | 7 | ||
Stock issued under employee stock purchase plan, shares | 89 | ||||
Stock issued under employee stock purchase plan | 209 | $ 1 | 208 | ||
Stock issued under restricted stock plan, shares | 648 | ||||
Stock issued under stock incentive plan, net of shares held for taxes | (507) | $ 6 | (513) | ||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | (1,245) | (1,245) | |||
Repurchase of common stock | 106 | 106 | |||
Net Income (Loss) Attributable to Parent | (48,952) | (48,952) | |||
Stock Issued During Period, Value, Acquisitions | 0 | $ 0 | (22,162) | 22,162 | |
Balance, shares at Dec. 31, 2020 | 66,454 | ||||
Balance at Dec. 31, 2020 | 59,217 | $ 668 | 179,489 | 326,319 | (447,259) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 4,367 | 4,367 | |||
Stock issued under employee stock purchase plan, shares | 70 | ||||
Stock issued under employee stock purchase plan | 125 | $ 1 | 124 | ||
Stock issued under restricted stock plan, shares | 731 | ||||
Stock issued under stock incentive plan, net of shares held for taxes | (1,232) | $ 7 | (1,239) | ||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | (122) | (122) | |||
Net Income (Loss) Attributable to Parent | (42,349) | (42,349) | |||
Stock Issued During Period, Value, Acquisitions | 0 | $ 0 | (10,559) | 10,559 | |
Balance, shares at Dec. 31, 2021 | 67,255 | ||||
Balance at Dec. 31, 2021 | $ 20,006 | $ 676 | $ 172,060 | $ 283,970 | $ (436,700) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | ||
Net Income (Loss) Attributable to Parent | $ (42,349) | $ (48,952) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Accounts Receivable, Credit Loss Expense (Reversal) | 1,229 | 14,256 |
Depreciation and amortization | 8,333 | 11,403 |
Deferred income taxes | 0 | 119 |
Stock-based compensation | 4,367 | 8,291 |
Noncash lease expense | 8,240 | 10,644 |
Net loss (gain) on marketable securities | (212) | (111) |
Loss on disposal or impairment | 239 | 38 |
Loss on transaction | 0 | 51,952 |
Changes in operating assets and liabilities: | ||
Increase (Decrease) in Accounts Receivable | (3,656) | (17,666) |
Prepaid expenses and other current assets | (806) | 10,339 |
Other long-term assets | 692 | 1,241 |
Accounts payable and accrued liabilities | 14,495 | (4,978) |
Deferred revenue and student deposits | 6,849 | 1,706 |
Increase (Decrease) in Operating Lease, Liabilities | (9,281) | (10,751) |
Other liabilities | (2,189) | 277 |
Net cash provided by (used in) operating activities | (15,433) | 25,326 |
Cash flows from investing activities | ||
Capital expenditures | (1,436) | (3,153) |
Purchases of investments | (1,080) | (720) |
Payments to Acquire Projects | 0 | 62,325 |
Capitalized costs for intangible assets | (721) | (272) |
Sales of investments | 1,833 | 1,818 |
Net cash used in investing activities | (1,404) | (64,652) |
Cash flows from financing activities | ||
Proceeds from exercise of stock options | 0 | 8 |
Proceeds from the issuance of stock under employee stock purchase plan | 125 | 209 |
Proceeds from Notes Payable | 0 | 2,682 |
Tax withholding on issuance of stock awards | (1,232) | (507) |
Repurchase of common stock | 0 | 106 |
Net cash provided by (used in) financing activities | (1,107) | 2,286 |
Net decrease in cash, cash equivalents and restricted cash | (17,944) | (37,040) |
Cash, cash equivalents and restricted cash at beginning of period | 55,497 | 92,537 |
Cash, cash equivalents and restricted cash at end of period | 37,553 | 55,497 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 71 | 112 |
Cash received for income taxes, net | (1,815) | (12,907) |
Supplemental disclosure of non-cash transactions: | ||
Purchase of equipment included in accounts payable and accrued liabilities | 4 | 68 |
Issuance of common stock for vested restricted stock units | 4,007 | 1,687 |
Debt extinguishment | 3,095 | 0 |
Issuance of notes payable | $ 2,809 | $ 0 |
Revenue Recognition Statement
Revenue Recognition Statement - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Revenue Recognition | Revenue, Other Revenue and Deferred Revenue The following table presents the Company’s net revenue disaggregated based on the revenue source (in thousands): Year Ended December 31, 2021 2020 Strategic services revenue $ 222,657 $ 18,881 Tuition revenue, net 30,016 344,804 Transition services income 9,934 984 Digital materials revenue, net — 21,258 Technology fee revenue, net — 9,424 Other revenue, net (1) 426 1,770 Revenue and other revenue $ 263,033 $ 397,121 (1) Primarily consists of revenues generated from various services and other miscellaneous fees. The following table presents the Company’s net revenue disaggregated based on the timing of revenue recognition (in thousands): Year Ended December 31, 2021 2020 Over time, over period of service $ 262,736 $ 326,302 Over time, full tuition grant (1) — 50,769 Point in time (2) 297 20,050 Revenue and other revenue $ 263,033 $ 397,121 (1) Represents revenue generated from the corporate FTG program. (2) Represents revenue generated from digital textbooks and other miscellaneous fees. The Company operates under two reportable segments and has no significant foreign operations or assets located outside of the United States. For additional information, see Note 21, “Segment Information.” Deferred Revenue Deferred revenue and student deposits consists of the following (in thousands): As of December 31, 2021 2020 Deferred revenue $ 14,469 $ 7,477 Student deposits 470 613 Total deferred revenue and student deposits $ 14,939 $ 8,090 Below are the opening and closing balances of deferred revenue from the Company’s contracts with customers (in thousands): 2021 2020 Opening balance, January 1 $ 7,477 $ 23,356 Closing balance, December 31 14,469 7,477 Increase (Decrease) $ 6,992 $ (15,879) For further information on receivables, refer to Note 6, “Accounts Receivable, Net” within the consolidated financial statements. Deferred revenue consists of cash payments that are received or due in advance of the Company’s performance. As of December 31, 2021, the deferred revenue balance relates entirely to the Zovio Growth segment. For the majority of the Company’s customers, payment for services is due prior to services being provided and is included in current deferred revenue. However, there are contracts which include deferred revenue that is deemed to be long-term. For additional information, refer to Note 11, “Other Long-Term Liabilities” within the consolidated financial statements. The difference between the opening and closing balances of deferred revenue primarily results from the timing difference between the Company’s performance and the customer’s payment. For the year ended December 31, 2021, the Company recognized $6.5 million of revenue that was included in the deferred revenue balance as of January 1, 2021. For the year ended December 31, 2020, the Company recognized $21.9 million of revenue that was included in the deferred revenue balance as of January 1, 2020. There was also $15.8 million of deferred revenue disposed of during the Sale Transaction. Amounts reported in the closing balance of deferred revenue are expected to be recognized as revenue within the next 12 months. | |
Deferred revenue, revenue recognized | $ 6.5 | $ 21.9 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions have been eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States (“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. Comprehensive Income (Loss) The Company has no components of other comprehensive income (loss), and therefore, comprehensive loss equals net loss. Cash Equivalents and Restricted Cash Cash and cash equivalents is comprised of cash and other short-term highly liquid investments that are readily convertible into known amounts of cash. The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. The Company’s restricted cash is primarily held in money market accounts, and is excluded from cash and cash equivalents on the Company’s consolidated balance sheets. Restricted cash represents amounts held as collateral for letters of credit. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows. As of December 31, 2021 2020 Cash and cash equivalents $ 28,265 $ 35,462 Restricted cash, current 9,288 20,035 Total cash, cash equivalents and restricted cash $ 37,553 $ 55,497 Investments The Company has historically held investments that consisted of mutual funds, corporate notes and bonds, and certificates of deposit. As of December 31, 2021, the Company held investments solely in mutual funds. The Company’s investments are denominated in U.S. dollars, are investment grade and are readily marketable. The Company considers as current assets those investments which will mature or are likely to be sold in less than one year. The Company classifies its investments as either trading, available-for-sale or held-to-maturity. Trading securities are those bought and held principally to sell in the short-term, with gains or losses from changes in fair value flowing through current earnings. Available-for-sale securities are carried at fair value as determined by quoted market prices, with unrealized gains and losses, net of tax, reported as a separate component of comprehensive income (loss) and stockholders’ equity. Held-to-maturity securities would be carried at amortized cost. Amortization of premiums, accretion of discounts, interest, and realized gains and losses are included in other income (loss), net in the consolidated statements of income (loss). The Company regularly monitors and evaluates the realizable value of its investments. If events and circumstances indicate that a decline in the value of these assets has occurred and is other-than-temporary, the Company would record a charge to other income (loss), net in the consolidated statements of income (loss). Deferred Compensation The Company has a deferred compensation plan, into which eligible participants can defer a maximum of 80% of their regular compensation and a maximum of 100% of their incentive compensation. The amounts deferred by the participant under this plan are credited with earnings or losses based upon changes in values of participant elected notional investments. Each participant is fully vested in the participant amounts deferred. The Company may make contributions that will generally vest according to a four-year vesting schedule. After four years of service, participants become fully vested in the employer contributions upon reaching normal retirement age, death, disability or a change in control. The Company’s obligations under the deferred compensation plan totaled $0.8 million and $1.4 million as of December 31, 2021 and 2020, respectively, and are included in other long-term liabilities in the consolidated balance sheets. The Company’s assets relating to the deferred compensation plan totaled $1.0 million and $1.5 million as of December 31, 2021 and 2020, respectively, and are included in investments in the consolidated balance sheets. Fair Value Measurements The Company uses the three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: (i) Level 1, defined as observable inputs such as quoted prices in active markets; (ii) Level 2, defined as inputs other than quoted prices in active markets that are either observable directly or indirectly, through market corroboration, for substantially the full term of the financial instrument; and (iii) Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Accounts Receivable and Allowance for Credit Losses Accounts receivable represents the amount management expects to collect under each customer contract and is primarily related to the Company’s subsidiaries, Fullstack and TutorMe. The Company adjusts its accounts receivable for an allowance for credit losses at each reporting period, as deemed necessary. The Company determines its allowance for credit losses using a loss-rate method combined with an aging schedule approach, which is appropriate given the short-term nature of a substantial majority of the Company’s receivables and as collections vary significantly based upon a receivable’s aging bucket. The Company calculates historical loss rates for receivables on the basis of the different risk profiles and historical loss-rate experience with each type of customer. Additionally, the Company monitors macroeconomic activity as well as other current conditions and their potential impact on collections to ensure the historical experience remains in line with current conditions and future short-term expectations. The allowance for credit losses is recorded within technology and academic services in the consolidated statements of income (loss). The Company writes off accounts receivable when an account is deemed uncollectible, which typically occurs when the Company has exhausted all collection efforts. Property and Equipment Property and equipment are recognized at cost less accumulated depreciation. Depreciation is computed using the straight-line method based on estimated useful lives of the related assets as follows: Furniture and office equipment 3 - 7 years Software 3 - 5 years Vehicles 5 years Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful lives of the assets. Upon the retirement or disposition of property and equipment, the related cost and accumulated depreciation is removed and a gain or loss is recorded within the general and administrative expense in the consolidated statements of income (loss). Repairs and maintenance costs are expensed in the period incurred. Leases In accordance with Accounting Standard Update (“ASU”) 2016-02, Leases (ASC 842) (“ASC 842”), leases are evaluated and classified as either operating or finance leases. The Company does not have any finance leases. The Company’s operating leases are included in operating lease assets, accounts payable and accrued liabilities, and rent liability on the consolidated balance sheets. Operating lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on information available at the date of adoption or lease commencement or modification date, as applicable, in calculating the present value of its lease payments. The incremental borrowing rate is determined using the U.S. Treasury rate adjusted to account for the Company’s credit rating and the collateralized nature of operating leases. The operating lease asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line method over the term of the lease. Impairment of Long-Lived Assets The Company assesses potential impairment to its long-lived assets under ASC 360, Property and Equipment. The Company makes this assessment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recorded if the carrying amount of the long-lived asset is not recoverable. 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. The Company’s qualitative assessment indicated that no impairment in the Company’s long-lived assets was deemed necessary as of December 31, 2021. Goodwill and Indefinite-Lived Intangible Assets The Company tests goodwill and indefinite-lived intangible assets for impairment, testing annually in the third quarter of each fiscal year, or more frequently if events and circumstances warrant. Under ASC 350, Intangibles - Goodwill and Other, to evaluate the impairment of goodwill, the Company first assesses qualitative factors, such as deterioration in general economic conditions or negative company financial performance, to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. To evaluate the impairment of the indefinite-lived intangible assets, the Company assesses the fair value of the assets to determine whether they were greater or less than the carrying values. Determining the fair value of indefinite-lived intangible assets is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions are inherently uncertain and may include such items as growth rates used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and a determination of appropriate market comparables. The Company has three distinct reporting units including (i) Zovio, (ii) Fullstack and (iii) TutorMe. The Fullstack and TutorMe reporting units have goodwill associated with them. During the third quarter of 2021, the Company’s quantitative assessment of goodwill and indefinite-lived intangible assets noted no impairment indicators in either the Fullstack or the TutorMe reporting unit, and noted a material amount of fair value in excess of the carrying amount.. There were no additional triggering events noted during the fourth quarter of fiscal 2021 and therefore there was no impairment of its goodwill amounts. The Company also has definite-lived intangible assets, which primarily consist of purchased intangibles and capitalized curriculum development costs. The definite-lived intangible assets are recognized at cost less accumulated amortization. Amortization is computed using the straight-line method based on estimated useful lives of the related assets. Notes Payable The fair value of the Company’s outstanding notes payable was estimated using the net present value of the payments, discounted at an interest rate consistent with market interest rates. The Company, through Fullstack, had previously entered into a contract whereby its counterparty advanced funds to the Company for certain program development costs, which the Company was obligated to repay out of future revenues from the developed program. The Company recognized these advances as a debt obligation. During 2021, the notes payable contract was amended and the amount was revalued. As such, included within the other income (loss), net, on the consolidated statements of income (loss) for the year ended December 31, 2021, is an offset of interest expense in the amount of $3.1 million, as well as a loss on extinguishment of debt of $2.8 million, the net impact of which is immaterial. Revenue, Other Revenue and Deferred Revenue Revenues are recognized when control of the promised goods or services are transferred, in an amount that reflects the consideration the Company expects to be entitled in exchange for those goods or services. Determining whether a valid customer contract exists includes an assessment of whether amounts due under the contract are collectible. The Company performs this assessment at the beginning of every contract and subsequently thereafter if new information indicates there has been a significant change in facts and circumstances. On December 1, 2020, the Company entered into the Services Agreement with Global Campus whereby the Company will provide certain educational technology and support services, which has an initial term of just over fifteen years, subject to renewal options and certain early termination provisions. The amounts earned from the Services Agreement are within the scope of ASC 606, Revenue from Contracts with Customers (“ASC 606”), and are denoted as revenue on the consolidated statements of income (loss). On December 1, 2020, the Company also entered into a transition services agreement with Global Campus whereby the Company will provide certain temporary transition services (the “Transition Services Agreement”), which has a term of three years. The amounts earned from the Transition Services Agreement are denoted as other revenue on the consolidated statements of income (loss). The Services Agreement has a single performance obligation, as the promises to provide the identified services are not distinct within the context of these agreements. The single performance obligation constitutes a series of distinct services as the customer benefits as services are provided. Service revenue is recognized over time using the input method. The input method provides a faithful depiction of the performance toward complete satisfaction of the performance obligation and can be tied to the direct cost incurred. The service fees received over the term of the agreement are variable in nature in that they are dependent upon the number of students attending the university and revenues generated from those students during the service period. The service fees are subject to certain adjustments, including performance-based adjustments, minimum profit level adjustments, and excess direct cost adjustments. These adjustments are all variable in nature in that they depend upon the Company’s performance during each service period. Such adjustments are presented as minimum residual liability within accounts payable and accrued liabilities in the consolidated financial statements. The minimum residual liability calculation at December 31, 2021 covers the period from July 1, 2021 to June 30, 2022. As such, the calculation includes actual financial information from July 1, 2021 through December 31, 2021 and forecasted financial information from January 1, 2022 through June 30, 2022. The main inputs include the Company’s forecasts of its direct costs as well as the Company’s forecasts of Global Campus’ revenues and operating expenses which directly impact the minimum residual liability. The Company’s six months forecast of Global Campus revenues and operating expenses is a management estimate which requires significant judgment. In determining the forecast management utilizes the contractual budget prepared by Global Campus and then adjust budgeted revenue based on actual revenue from July 1, 2021 to December 31, 2021 as well as projected student enrollment. Budgeted Global Campus operating expenses are then adjusted based on actual expenses from July 1, 2021 to December 31, 2021 and expected Global Campus employee headcount. The $15.0 million recorded in accounts payable and accrued liabilities as of December 31, 2021 represents half of the expected minimum residual liability that will be due to Global Campus in June 2022. The amount owed could be materially different than the current estimate projected by management. The Company allocates variable consideration to the distinct increments of service to which it relates, as the variability is directly related to the Company’s effort to satisfy the distinct increments of service provided. This is consistent with the allocation objective in ASC 606. The Company meets the criteria in the standard and exercises the practical expedient to not disclose the aggregate amount of the transaction price allocated to the single performance obligation that is unsatisfied as of the end of the reporting period. The Company does not disclose the value of unsatisfied performance obligations because the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a service that forms part of a single performance obligation. The Company, through Fullstack, offers both full-time and part-time technology bootcamps. The tuition fees for these programs are recognized as revenue as the services are provided to the student, which occurs over the applicable period of instruction. For most Fullstack programs, tuition is collected prior to the start of the cohort; however, for certain programs students can defer payment until completion of the program and for these students an accounts receivable balance is recorded. The Company, through TutorMe, provides online on-demand tutoring services through hourly and access license contracts. Revenue for these contracts are recognized based on hours used or ratably over the contract period depending on the type of contract. For most TutorMe contracts, cash is collected at or near the onset of the contract. The collected cash is recognized as deferred revenue until recognized into revenue. Prior to December 1, 2020, the majority of the amounts earned by the Company were from tuition, technology fees, and digital materials related to students whose primary funding source is governmental funding. The amounts earned from these streams are denoted as university-related revenue on the consolidated statements of income (loss). Tuition represents amounts charged for course instruction, and technology fees represent amounts charged for the students’ use of the technology platform on which course instruction is delivered. Digital materials fees represent amounts charged for the digital textbooks that accompany the majority of courses taught at the Company’s institution. The majority of tuition and technology fees are recognized as revenue as control of the services is transferred to the student, which occurs over the applicable period of instruction. Similarly, the majority of digital materials fees are recognized as revenue when control of the product has been transferred to the student, which occurs when the student is granted unrestricted access to the digital textbook, generally, on the first day of the course. Revenue generated from students within the conditional admission period is deferred and recognized when the student matriculates into the institution, which occurs in the fourth week of the course. Prior to December 1, 2020, the Company’s institutions’ online students would generally enroll in a program that encompasses a series of five to six-week courses that are taken consecutively over the length of the program. With the exception of those students under conditional admission and students enrolled under the Full Tuition Grant (“FTG”) program, online students are billed on a payment period basis on the first day of a course. Students under conditional admission are billed for the payment period upon matriculation.. Workers' Compensation The Company records a gross liability for estimated workers’ compensation claims, incurred but not yet reported, as of each balance sheet date. The Company also records the gross insurance recoverable due for individual claim amounts. This is recorded as an other asset and as an equal accrued liability. The stop-loss premium is determined annually, but invoiced and paid on a quarterly basis. The related insurance premiums are expensed ratably over the coverage period. Income Taxes The Company accounts for its income taxes using the asset-liability method whereby deferred tax assets and liabilities are determined based on temporary differences between the bases used for financial reporting and income tax reporting purposes. Deferred income taxes are provided based on the enacted tax rates expected to be in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for deferred tax assets if it is more-likely-than-not that the Company will not realize those tax assets through future operations. The Company evaluates and accounts for uncertain tax positions using a two-step approach. Recognition (step one) 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. Measurement (step two) determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Derecognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. Stock-Based Compensation Stock-based compensation expense is measured at the grant date fair value of the award and is expensed over the vesting period. The fair value of the Company’s restricted stock units (“RSUs”) is based on the market price of the Company’s common stock on the date of grant. The Company estimates the fair value of stock options on the grant date using the Black-Scholes option pricing model. The Company estimates the fair value of its performance stock units (“PSUs”) on the grant date using a Monte Carlo simulation model. Determining the fair value of stock-based awards at the grant date under these models 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. The amount of stock-based compensation expense recognized during a period is based on the portion of the awards that are ultimately expected to vest. The Company estimates award forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company’s equity incentive plans require that stock option awards have an exercise price that equals or exceeds the closing price of the Company’s common stock on the date of grant. Stock-based compensation expense for stock-based awards is recorded in the consolidated statements of income (loss), net of estimated forfeitures, using the graded-vesting method over the requisite service periods of the respective stock awards. The requisite service period is generally the period over which an employee is required to provide service to the Company in exchange for the award. Technology and Academic Services Technology and academic services costs consist primarily of costs related to ongoing maintenance of educational infrastructure, including online course delivery and management, student records, assessment, customer relations management and other internal administrative systems. This also includes costs to provide support for curriculum and new program development, support for faculty training and development and technical support. This expense category includes salaries, benefits and share-based compensation, information technology costs, curriculum and new program development costs (which are expensed as incurred), provision for bad debt and other costs associated with these support services. This category also includes an allocation of depreciation, amortization, human resources, rent, and occupancy costs attributable to the provision of these services. Counseling Services and Support Counseling services and support costs consist primarily of costs including team-based counseling and other support to prospective and current students as well as financial aid processing. This expense category includes salaries, benefits and share-based compensation, and other costs such as dues, fees and subscriptions and travel costs. This category also includes an allocation of depreciation, amortization, human resources, rent, and occupancy costs attributable to the provision of these services. Marketing and Communication Marketing and communication costs consist primarily of lead acquisition, digital communication strategies, brand identity advertising, media planning and strategy, video, data science and analysis, marketing to potential students and other promotional and communication services. This expense category includes salaries, benefits and share-based compensation for marketing and communication personnel, brand advertising, marketing leads and other promotional and communication expenses. This category also includes an allocation of depreciation, amortization, human resources, rent, and occupancy costs attributable to the provision of these services. Advertising costs are expensed as incurred. Advertising costs were $65.2 million and $70.2 million for the years ended December 31, 2021 and 2020, respectively. General and Administrative General and administrative costs consist primarily of compensation and benefit costs, including related stock-based compensation, for employees engaged in corporate management, finance, compliance, and other corporate functions. This category also includes an allocation of depreciation, amortization, human resources, rent, and occupancy costs attributable to the provision of these services. University-Related Expenses University-related expenses represent those costs that were transferred to Global Campus in the Sale Transaction and that are no longer incurred by the Company. These costs previously included instructor fees and other employee costs, student related bad debt expense, license fees for licenses transferred to Global Campus and other costs. Legal Expense Legal expense is comprised of charges related to the estimated amounts to resolve the previously disclosed investigation for California Attorney General. Restructuring and Impairment Charges Restructuring and impairment expenses are primarily comprised of (i) severance costs related to headcount reductions made in connection with restructuring plans and (ii) estimated lease losses related to facilities vacated or consolidated under restructuring plans. Loss on Transaction Loss on transaction amount represents the net assets transferred in the Sale Transaction, as well as other transaction-related expenses and costs to sell. The loss on transaction is recorded in the consolidated statements of income (loss). The Company recorded a loss on transaction of $54.8 million at closing, which is comprised of $50.4 million of net assets loss, as well as $4.5 million of other transaction-related expenses and costs to sell. The net asset loss includes $62.3 million of cash and cash equivalents transferred to Global Campus on the date of the transaction. All assets transferred to Global Campus were previously included in the University Partners segment. The following are the components of the loss on transaction recorded in 2020: Cash and cash equivalents $ 62,325 Accounts receivable, net of allowance for credit losses 31,247 Prepaid expenses and other current assets 1,014 Property and equipment, net 15 Intangibles, net 7,669 Other long-term assets 1,539 Total assets transferred 103,809 Accounts payable and accrued liabilities 1,051 Deferred revenue and student deposits 48,901 Less: total liabilities transferred 49,952 Plus: other transaction-related expenses and costs to sell 4,546 Less: net asset adjustment 3,606 Loss on transaction $ 54,797 Income (Loss) Per Share Basic income per common share is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income per common share is calculated by dividing net income available to common stockholders by the sum of (i) the weighted average number of common shares outstanding during the period and (ii) potentially dilutive securities outstanding during the period, if the effect is dilutive. Potentially dilutive common shares consist of incremental shares of common stock issuable upon the exercise of the stock options and upon the settlement of RSUs and PSUs. Segment Information Prior to December 1, 2020, the Company operated in one segment for reporting purposes. Following the Sale Transaction on December 1, 2020, the Company now operates in two reportable segments, including the University Partners Segment and the Zovio Growth Segment. The Company’s reportable segments are determined based on (i) financial information reviewed by the chief operating decision maker, the Chief Executive Officer (“CEO”), (ii) internal management and related reporting structure, and (iii) the basis upon which the CEO makes resource allocation decisions. The Company’s University Partners Segment includes the technology and services provided to colleges and universities to enable the online delivery of degree programs. The inaugural partner in the University Partners Segment is Global Campus. The University Partners Segment also includes the tuition revenue related to the University prior to the Sale Transaction on December 1, 2020. The Company’s Zovio Growth Segment includes our other subsidiaries, including Fullstack and TutorMe. For additional information on segments, see Note 21, “Segment Information.” Recent Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . The amendments in this update require that an entity recognize and measure contract assets and liabilities acquired in a business combination in accordance with Topic 606. An acquirer may assess the process in which the acquiree applied Topic 606 to its revenue contracts. This update will provide a level of review to prove contract assets and liabilities are recorded in accordance with GAAP and consistent with the acquirer’s policies. The amendment in this update will be effective for fiscal years beginning after December 15, 2022 and would be applicable to the Company if business acquisitions are made after the effective date. |
Restructuring and Impairment Ch
Restructuring and Impairment Charges | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Impairment Charges | Restructuring and Impairment ChargesThe Company has implemented various restructuring plans to better align its resources with its business strategy. These related charges are recorded in the restructuring and impairment charges line item on the Company’s consolidated statements of income (loss). The Company implemented various reductions in force to help better align personnel resources with the decline in enrollment. During the years ended December 31, 2021 and 2020, the Company recognized $2.6 million and $3.0 million, respectively, as restructuring charges related to severance costs for wages and benefits resulting from the reductions in force. The Company anticipates the remainder of these costs will be paid out by the end of the second quarter of 2022 from existing cash on hand. The Company had previously relocated its headquarters to Chandler, Arizona and had also previously vacated or consolidated certain properties, and subsequently reassessed its obligations on non-cancelable leases. In 2020, the Company also paid contract termination costs to exit a portion of its business. As a result of the aforementioned items, during the year ended December 31, 2020, the Company recorded $1.8 million, as restructuring charges relating to lease exit and other costs. For the year ended December 31, 2021, the Company did not recognize any lease exit costs. The following table summarizes the amounts recorded in the restructuring and impairment charges line item on the Company’s consolidated statements of income (loss) for each of the periods presented (in thousands): Year Ended December 31, 2021 2020 Severance costs $ 2,641 $ 3,004 Lease exit and other costs — 1,839 Total restructuring and impairment charges $ 2,641 $ 4,843 The following table summarizes the changes in the Company’s restructuring liability by type during the following periods indicated (in thousands): Student Transfer Costs Severance Costs Lease Exit and Other Costs Total Balance at December 31, 2019 $ 1,296 $ 8,001 $ 976 $ 10,273 Restructuring and impairment charges — 3,004 1,839 4,843 Payments (14) (10,263) (841) (11,118) Balance at December 31, 2020 1,282 742 1,974 3,998 Restructuring and impairment charges — 2,641 — 2,641 Payments — (2,853) (1,576) (4,429) Non-cash transaction — (10) — (10) Balance at December 31, 2021 $ 1,282 $ 520 $ 398 $ 2,200 The restructuring liability amounts are recorded within either the accounts payable and accrued liabilities account or the rent liability account on the consolidated balance sheets. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Investments | Fair Value Measurements The following tables summarize the fair value information as of December 31, 2021 and 2020, respectively (in thousands): December 31, 2021 Level 1 Level 2 Level 3 Total Mutual funds $ 974 $ — $ — $ 974 December 31, 2020 Level 1 Level 2 Level 3 Total Mutual funds $ 1,515 $ — $ — $ 1,515 The mutual funds in the tables above, represent the deferred compensation asset balances, which are considered to be trading securities. There were no transfers between level categories for investments during the periods presented. The Company’s deferred compensation asset balances are recorded in the investments line item on the Company’s consolidated balance sheets and are classified as Level 1 securities. There were no differences between amortized cost and fair value of investments as of December 31, 2021 and 2020. There were no reclassifications out of accumulated other comprehensive income during either the twelve months ended December 31, 2021 and 2020. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Accounts Receivables, Net | Accounts Receivable, Net Accounts receivable, net, consists of the following (in thousands): As of December 31, 2021 2020 Accounts receivable $ 10,562 $ 8,420 Less allowance for credit losses 931 1,216 Accounts receivable, net $ 9,631 $ 7,204 The following table presents the changes in the allowance for credit losses for the periods indicated (in thousands): For the year ended December 31, 2021 Beginning Charged to Write-offs Amounts disposed of by Sale Transaction Recoveries of amounts Ending Non-FTG-related allowance $ 1,216 $ 1,229 $ (1,514) $ — $ — $ 931 Total allowance for credit losses $ 1,216 $ 1,229 $ (1,514) $ — $ — $ 931 For the year ended December 31, 2020 Beginning Charged to Write-offs Amounts disposed of by Sale Transaction Recoveries of amounts Ending FTG-related allowance $ 1,749 $ 2,176 $ (2,485) $ (1,865) $ 425 $ — Non-FTG-related allowance 11,963 12,080 (16,236) (11,747) 5,156 1,216 Total allowance for credit losses $ 13,712 $ 14,256 $ (18,721) $ (13,612) $ 5,581 $ 1,216 |
Prepaid Expense and Other Curre
Prepaid Expense and Other Current Assets | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consists of the following (in thousands): As of December 31, 2021 2020 Prepaid expenses $ 2,664 $ 3,027 Prepaid licenses 1,233 1,371 Prepaid income taxes — 48 Income tax receivable — 1,644 Prepaid insurance 2,254 1,127 Insurance recoverable 496 404 Other current assets (1) 6,776 4,996 Total prepaid expenses and other current assets $ 13,423 $ 12,617 (1) Other current assets includes payment of net asset adjustment due from Global Campus related to the Sale Transaction, which is currently in mediation. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net, consists of the following (in thousands): As of December 31, 2021 2020 Furniture and office equipment $ 22,032 $ 36,146 Software 4,493 7,512 Leasehold improvements 15,921 16,325 Vehicles 22 22 Total property and equipment 42,468 60,005 Less accumulated depreciation and amortization (16,086) (29,430) Total property and equipment, net $ 26,382 $ 30,575 Depreciation and amortization expense associated with property and equipment totaled $5.3 million and $6.2 million for the years ended December 31, 2021 and 2020, respectively. |
Goodwill and Intangibles, Net
Goodwill and Intangibles, Net | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles, Net | Goodwill and Intangibles, Net Goodwill and intangibles, net, consists of the following (in thousands): December 31, 2021 Definite-lived intangible assets: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Capitalized curriculum costs $ 13,982 $ (12,796) $ 1,186 Purchased intangible assets 14,185 (9,048) 5,137 Total definite-lived intangible assets $ 28,167 $ (21,844) $ 6,323 Goodwill 23,176 Total goodwill and intangibles, net $ 29,499 December 31, 2020 Definite-lived intangible assets: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Capitalized curriculum costs $ 13,745 $ (12,644) $ 1,101 Purchased intangible assets 14,185 (6,677) 7,508 Total definite-lived intangible assets $ 27,930 $ (19,321) $ 8,609 Goodwill 23,176 Total goodwill and intangibles, net $ 31,785 Definite-lived intangibles include capitalized curriculum costs, which are the digital course materials, as well as purchased intangible assets. The purchased intangible assets primarily relate to the acquired developed curriculum, university relationships and student relationships from the Fullstack and TutorMe acquisitions. Goodwill as of December 31, 2021 and 2020, includes the goodwill resulting from the Fullstack and TutorMe acquisitions. For the years ended December 31, 2021 and 2020, amortization expense was $3.0 million and $5.2 million, respectively. The following table summarizes the estimated remaining amortization expense as of each fiscal year ended below (in thousands): Year Ended December 31, 2022 $ 2,524 2023 2,411 2024 835 2025 192 2026 127 Thereafter 234 Total future amortization expense $ 6,323 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Liabilities [Abstract] | |
Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consists of the following (in thousands): As of December 31, 2021 2020 Accounts payable $ 5,967 $ 11,246 Accrued salaries and wages 5,434 6,149 Accrued bonus 3,625 11,428 Accrued vacation 3,037 3,369 Accrued litigation and fees 22,376 8,341 Minimum residual liability (1) 14,987 1,216 Accrued expenses 13,400 12,473 Current leases payable 4,492 6,934 Accrued insurance liability 1,404 1,537 Accrued income taxes payable 47 — Total accounts payable and accrued liabilities $ 74,769 $ 62,693 (1) Amount represents approximately 50% of the total amount anticipated to be remitted to Global Campus in June 2022. The amount owed could be materially different than the current estimate projected by management. |
Other Long-Term Liabilities
Other Long-Term Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Liabilities, Other than Long-term Debt, Noncurrent [Abstract] | |
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consists of the following (in thousands): As of December 31, 2021 2020 Uncertain tax positions $ — $ 28 Notes payable 2,723 2,981 Deferred revenue 807 — Other long-term liabilities 1,585 4,172 Total other long-term liabilities $ 5,115 $ 7,181 |
Credit Facilities
Credit Facilities | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Credit Facilities | Credit Facilities The Company has issued letters of credit that are collateralized with cash, in the aggregate amount of $9.2 million as of December 31, 2021. The letters of credit relate primarily to the Company's leased facilities and insurance requirements. The collateralized cash is held in restricted cash on the Company's consolidated balance sheets. The Company is required to provide surety bonds in certain states in which it does business. As a result, the Company had previously entered into a surety bond facility with an insurance company to provide such bonds when required. Although there are no remaining bonds on the Company’s behalf under this facility as of December 31, 2021, the Company still holds certain liability associated with any required collateral. |
Lease Obligations
Lease Obligations | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Lease Obligations | Lease Obligations Operating leases The Company leases various office and classroom facilities which expire at various dates through 2033. These facilities are used for academic operations, corporate functions, enrollment services and student support services. All of the leases were classified as operating leases for the period ended December 31, 2021, and the Company does not have any finance leases. All of the leases, other than those that may qualify for the short-term scope exception of 12 months or less, are recorded on the Company’s consolidated balance sheets. In the first half of 2021, the Company entered into a new lease in New York for classrooms and office space and recorded a right-of-use asset of $14.6 million in exchange for lease obligations. However, in the fourth quarter of 2021, the Company began to market this space for sublease. There is no guarantee that the Company will be able to sublease the space at rates materially similar to that of the current lease. The Company leases approximately 131,000 square feet of office space located in Chandler, Arizona, with the lease extending through 2030. As of December 31, 2021, the lease amounts on the consolidated balance sheets do not include any options to extend, nor any options for early termination. The Company’s lease agreements do not include rental payments adjusted periodically for inflation. The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants. Other than a sublease to Global Campus, the Company is not a party to any related party arrangements with respect to its lease transactions. For the years ended December 31, 2021 and 2020, rent expense totaled $9.8 million and $13.2 million, respectively, calculated in accordance with ASC 842, Leases . Rent expense in certain periods also includes the restructuring and impairment charges recorded and therefore, may differ significantly from cash payments. For additional information, see Note 4, “Restructuring and Impairment Charges.” The Company has an agreement to sublease certain portions of its office facilities, with one active sublease as of December 31, 2021. The Company’s sublease does not include any options to extend, nor any options for early termination. The Company’s sublease does not contain any residual value guarantees or restrictive covenants. The sublease was classified as an operating lease for the period ended December 31, 2021. The Company is subleasing office space of approximately 21,000 square feet in Denver, Colorado with a remaining commitment to lease of 14 months and net lease payments of $0.8 million. Sublease income for the years ended December 31, 2021 and 2020 was $2.3 million, and $1.9 million, respectively, and is recorded as an offset to facility costs within general and administrative expenses on the consolidated statements of income (loss). The following table represents the classification and amounts allocated to the various expense line items on the consolidated statements of income (loss) for the year ended December 31, 2021 (in thousands): Operating lease costs $ 8,239 Short-term lease cost 389 Variable lease costs (1) 1,193 Less: Sub-lease income (2,264) Total net lease costs $ 7,557 (1) Variable components of the lease payments such as utilities, taxes and insurance, parking and maintenance costs. The following table represents the maturities of lease liabilities, a portion of which is recorded in accounts payable and accrued liabilities, as well as rent liability on the consolidated balance sheet as of December 31, 2021, (in thousands): 2022 $ 7,009 2023 5,316 2024 5,022 2025 4,759 2026 4,763 Thereafter 26,736 Total minimum payments 53,605 Less: Interest (1) (14,907) Total net lease liabilities $ 38,698 (1) Calculated using an appropriate interest rate for each individual lease. See the weighted-average discount rate noted below. Some of the more significant assumptions and judgments in determining the amounts to capitalize include the determination of the discount rate. The following table represents the lease term and discount rate used in the calculations as of December 31, 2021: Weighted-average remaining lease term (in years): Operating leases 9.6 years Weighted-average discount rate: Operating leases 6.9 % The following table represents the cash flow information of operating leases for the year ended December 31, 2021 (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9,281 |
Income (Loss) Per Share
Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | Income (Loss) Per Share Basic income (loss) per share is calculated by dividing net income (loss) available to common stockholders for the period by the weighted average number of common shares outstanding for the period. Diluted income (loss) per share is calculated by dividing net income (loss) available to common stockholders for the period by the sum of (i) the weighted average number of common shares outstanding during the period, plus (ii) potentially dilutive securities outstanding during the period, if the effect is dilutive. Potentially dilutive securities for the periods presented include incremental stock options, unvested RSUs and unvested PSUs. The following table sets forth the computation of basic and diluted loss per share for the periods indicated (in thousands, except per share data): Year Ended December 31, 2021 2020 Numerator: Net loss $ (42,349) $ (48,952) Denominator: Weighted average number of common shares outstanding 33,256 31,959 Effect of dilutive options and stock units — — Diluted weighted average number of common shares outstanding 33,256 31,959 Loss per share: Basic $ (1.27) $ (1.53) Diluted $ (1.27) $ (1.53) The following table sets forth the number of stock options, RSUs and PSUs excluded from the computation of diluted loss per share for the periods indicated because their effect was anti-dilutive (in thousands): Year Ended December 31, 2021 2020 Stock options 1,341 1,757 Stock units and contingent consideration 1,133 1,112 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company recorded $4.4 million and $8.3 million of stock-based compensation expense related to equity awards for the years ended December 31, 2021 and 2020 respectively. The related income tax benefit was $1.1 million and $2.1 million for the years ended December 31, 2021 and 2020, respectively. However, there was no net tax benefit recorded for the equity awards, as the Company was in a full valuation allowance position for the years ended December 31, 2021 and 2020. The Company has stock-based compensation expense related to stock options, RSUs, PSUs and contingent shares related to acquisitions. The Company records stock-based compensation expense over the vesting term using the graded-vesting method. Stock Options The Company grants stock options from either its 2009 Stock Incentive Plan (the “2009 Plan”) or its Tutorme.com, Inc. 2015 Equity Incentive Plan. The compensation committee of the Company's board of directors, or the full board of directors (the “board”), determines eligibility, vesting schedules and exercise prices for stock options granted under the 2009 Plan. Stock options granted under the 2009 Plan typically have a maximum contractual term of 10 years, subject to the option holder's continuing service with the Company. Stock options are generally granted with a four-year vesting requirement, pursuant to which the option holder must continue providing service to the Company at the applicable vesting date. There were no stock options granted during the year ended December 31, 2021 or 2020. The following table presents a summary of stock option activity during the periods indicated (in thousands, except for exercise prices and contractual terms): Options Weighted- Weighted- Aggregate December 31, 2019 2,008 $ 13.42 4.16 $ 393 Granted — $ — Exercised (22) $ 0.36 Forfeitures and expired (361) $ 17.54 December 31, 2020 1,625 $ 12.68 3.63 $ 918 Granted — $ — Exercised — $ — Forfeitures and expired (402) $ 16.52 December 31, 2021 1,223 $ 11.42 2.56 $ 191 Vested and expected to vest at December 31, 2021 1,223 $ 11.42 2.56 $ 191 Exercisable at December 31, 2021 1,223 $ 11.42 2.56 $ 191 As of December 31, 2021, the Company had 10.1 million shares of common stock reserved for issuance upon the exercise of outstanding stock options and settlement of outstanding stock awards under the Company’s equity incentive plans. Shares issued upon stock option exercises and settlements of stock awards are drawn from the authorized but unissued shares of common stock. No stock options were exercised during the year ended December 31, 2021. No windfall tax benefit was realized from these exercises. The Company also realized a total tax benefit shortfall of $0.9 million. During the year ended December 31, 2020, there were approximately 21,700 stock options exercised with an intrinsic value of approximately $0.1 million. No windfall tax benefit was realized from these exercises. The Company also realized a total tax benefit shortfall of $0.7 million. Approximately 0.4 million stock options expired during the years ended December 31, 2021 and 2020, respectively. The fair value of each stock option award granted during the year ended December 31, 2020 was estimated on the date of grant using the Black-Scholes option pricing model. The Company’s determination of the fair value of share-based awards is affected by the Company’s common stock price as well as assumptions regarding several complex and subjective variables. The risk-free interest rate is based on the currently available rate on a U.S. Treasury zero-coupon issue with a remaining term equal to the expected term of the stock option converted into a continuously compounded rate. The Company has never declared or paid any cash dividends on its common stock and does not currently anticipate paying cash dividends in the future. The Company has enough historical option exercise information to compute an expected term for use as an assumption in the Black-Scholes option pricing model, and as such, its computation of expected term was calculated using its own historical data. The volatility of the Company’s common stock is also based upon its own historical volatility. There were no unrecognized compensation costs related to unvested stock options as of December 31, 2021. As of December 31, 2020, there was $4 thousand of unrecognized compensation costs related to unvested stock options. Stock Awards The Company has also granted RSUs to its employees either under the 2009 Plan or the 2021 CEO Inducement Equity Incentive Plan. Each RSU represents the future issuance of one share of the Company’s common stock contingent upon the recipient’s continued service with the Company through the applicable vesting date. Upon the vesting date, RSUs are automatically settled for shares of the Company’s common stock unless the applicable award agreement provides for delayed settlement. If prior to the vesting date the employee’s status as a full-time employee is terminated, the unvested RSUs are automatically canceled on the employment termination date, unless otherwise specified in an employee’s individual employment agreement. The fair value of an RSU is calculated based on the market value of the common stock on the grant date and is amortized over the applicable vesting period using the graded-vesting method. The Company has also granted certain PSUs under the 2009 Plan or the 2021 CEO Inducement Equity Incentive Plan. Each PSU represents the future issuance of one share of the Company’s common stock contingent upon achievement of the applicable performance target and the recipient’s continued service with the Company through the applicable vesting date. Certain of the PSUs may be earned based on the achievement of a market-based measure, and certain of the PSUs may be earned based on performance-based measures. With respect to each award of PSUs, vesting is based upon the achievement of the applicable performance target, and subject to the employee’s continued service with the Company through the applicable vesting date. If prior to the vesting date the employee’s status as a full-time employee is terminated, the unvested PSUs are automatically canceled on the employment termination date, unless otherwise specified in an employee’s individual employment agreement. PSUs are amortized over the applicable vesting period using the graded-vesting method. The fair value of the portion of the PSU awards subject to earning based on the achievement of a performance-based measure was based on the Company’s stock price as of the date the applicable performance target was approved by the board. Compensation cost for the portion of the PSU awards subject to earning based on the achievement of a performance-based measure is recorded based on the probable outcome of the performance conditions associated with the shares, as determined by management. The fair value of the portion of the PSU awards subject to earning based on the achievement of a market-based measure was estimated based on the Company’s stock price as of the date of grant using a Monte Carlo simulation model. The weighted-average assumptions for the PSU awards during the year ended December 31, 2021, subject to earning based on the achievement of a market-based measure are noted in the following table: 2021 Grant price per share $ 2.35 Risk-free interest rate 0.2 % Expected dividend yield — Historical volatility 108.4 % Expected life (in years) 2.57 Forfeiture rate 13.0 % Weighted average grant date fair value per share $ 2.50 A summary of the RSU and PSU activity and related information is as follows (in thousands, except for exercise prices and contractual terms): Restricted Stock Units and Performance Stock Units Time-Based RSU Performance-Based PSU Market-Based PSU Number of Shares Weighted Average Number of Shares Weighted Average Number of Shares Weighted Average Balance at December 31, 2019 2,305 $ 5.04 — $ — 1,070 $ 6.76 Awarded 1,470 $ 2.27 1,059 2.19 — $ — Vested (911) $ 9.67 — — — — Canceled (570) $ 5.14 (43) $ 2.18 (337) $ 7.79 Balance at December 31, 2020 2,295 $ 1.4 1,017 $ 2.19 733 $ 6.28 Awarded 1,680 $ 2.63 195 $ 3.81 1,870 $ 0.90 Vested (1,056) $ 3.83 — — — — Canceled (697) $ 3.59 (566) $ 2.18 (659) $ 5.68 Balance at December 31, 2021 2,222 $ 2.64 645 $ 2.69 1,944 $ 1.30 As of December 31, 2021 and 2020 there was $3.0 million and $3.4 million, respectively, of unrecognized compensation costs related to unvested RSUs. At December 31, 2021, the unrecognized compensation costs of RSUs were expected to be recognized over a weighted average period of 1.4 years. During the year ended December 31, 2021, 1.1 million RSUs vested and were released with a market value of $4.0 million. Approximately $0.3 million of windfall tax benefit was realized from these awards, and the related tax benefit shortfall realized was $0.3 million. During the year ended December 31, 2020, 0.9 million RSUs vested and were released with a market value of $1.7 million. Approximately $44.7 thousand of windfall tax benefit was realized from these awards, and the related tax benefit shortfall realized from the RSUs released was $1.3 million. As of December 31, 2021, there was $3.0 million of unrecognized compensation costs related to unvested PSUs. At December 31, 2021, the unrecognized compensation costs of PSUs were expected to be recognized over a weighted average period of 2.2 years, to the extent the applicable performance criteria are met. No PSUs vested during the years ended December 31, 2021, and 2020. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company uses the asset-liability method to account for taxes. Under this method, deferred income tax assets and liabilities result from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements that will result in income and deductions in future years. The components of income tax expense (benefit) are as follows (in thousands): Year Ended December 31, 2021 2020 Current: Federal $ (270) $ (13,238) State 131 284 Foreign 10 5 (129) (12,949) Deferred: Federal — (56) State — (63) — (119) Total $ (129) $ (13,068) On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES Act”) was signed into law. The CARES Act is a relief package intended to assist many aspects of the Country’s economy of which certain components of the Act impacted the Company’s 2020 income tax provision. Specifically, the CARES Act temporarily reinstated a five-year carryback period for all NOLs generated in the tax years 2018, 2019 and 2020. Therefore, the Company’s NOLs from 2018 and 2019 were carried back to 2013 and 2014, respectively, and a tax benefit of approximately $12.8 million was recorded for the tax year 2020. The entire NOL carryback refund in the amount of $12.8 million was received by the Company in 2020. Each reporting period, the Company assesses the likelihood that it will be able to recover its deferred tax assets, which represent timing differences in the recognition of certain tax deductions for accounting and tax purposes. The realization of deferred tax assets is dependent, in part, upon future taxable income. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, the Company considers all available evidence, including past operating results, estimates of future taxable income given current business conditions affecting the Company, and the feasibility of ongoing tax planning strategies. As of December 31, 2021, the Company continues to record a full valuation allowance against all net deferred tax assets, as was the case at December 31, 2020. The Company intends to maintain a valuation allowance against its deferred tax assets until sufficient positive evidence exists to support its reversal. Deferred income tax balances reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases and are stated at enacted tax rates expected to be in effect when taxes are paid or recovered. Significant components of the Company’s deferred tax assets and liabilities and balance sheet classifications are as follows (in thousands): As of December 31, 2021 2020 Deferred tax assets: Net operating loss $ 31,841 $ 22,662 Fixed assets 365 — Bad debt 239 303 Vacation accrual 618 673 Stock-based compensation 3,222 3,869 Operating lease liabilities 9,945 7,746 Bonus accrual 846 2,476 Accrued expenses 1,329 4,333 Other 1,154 1,258 Total deferred tax assets 49,559 43,320 Valuation allowance (42,119) (37,375) Net deferred tax assets 7,440 5,945 Deferred tax liabilities: Fixed assets and intangibles — (704) Indefinite-lived intangibles — — Operating lease assets (7,440) (5,045) Other — (196) Total deferred tax liabilities (7,440) (5,945) Total net deferred tax assets (liabilities) $ — $ — At December 31, 2021, the Company had federal and state net operating loss carryforwards of $117.0 million and $137.3 million, respectively, which are available to offset future taxable income. Approximately $112.0 million of the federal net operating loss can be carried forward indefinitely. The federal and state net operating loss carryforwards began to expire in 2021. The Company’s utilization of net operating loss carryforwards may be subject to annual limitations due to ownership change provisions of Section 382 of Internal Revenue Code of 1986, as amended. The following table presents a reconciliation of the income tax benefit computed using the federal statutory tax rate of 21% and the Company’s provision for income taxes (in thousands): Year Ended December 31, 2021 2020 Computed expected federal tax expense $ (8,920) 21.0 % $ (13,024) 21.0 % State taxes, net of federal benefit (885) 2.1 (2,476) 4.0 Permanent differences 5,606 (13.2) 436 (0.7) Uncertain tax positions (349) 0.8 (618) 1.0 Stock compensation 696 (1.6) 1,388 (2.2) Federal tax rate change on NOL carryback — — (4,908) 7.9 Domestic production activities — — — — Valuation allowance 3,981 (9.4) 5,698 (9.2) Other (258) 0.6 436 (0.7) Income tax benefit $ (129) 0.3 % $ (13,068) 21.1 % The following table presents a reconciliation of the beginning and ending amount of unrecognized tax benefits (in thousands): Year Ended December 31, 2021 2020 Unrecognized tax benefits at beginning of period $ 18 $ 2,128 Gross increases - tax positions in prior period — — Gross decreases - tax positions in prior period — (1,661) Gross increases - current period tax positions — — Settlements — (400) Lapse of statute of limitations (18) (49) Unrecognized tax benefits at end of period $ — $ 18 Included in the amount of unrecognized tax benefits at December 31, 2020 is $18 thousand of tax benefits that, if recognized, would affect the Company’s effective tax rate. Also included in the balance of unrecognized tax benefits at December 31, 2020 is less than $4 thousand of tax benefits that, if recognized, would result in adjustments to other tax accounts, primarily deferred tax assets which was offset by a full valuation allowance. The Company is required to file income tax returns in the United States that includes various state and local tax jurisdictions. The preparation of these income tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. The income tax returns are subject to audits by the applicable federal and state taxing authorities. As part of these audits, the taxing authorities may disagree with our tax positions. The ultimate resolution of these tax positions is often uncertain until the audit is complete and any disagreements are resolved. The Company therefore records an amount for its estimate of the additional tax liability, including interest and penalties, for any uncertain tax positions taken or expected to be taken in an income tax return. The Company reviews and updates the accrual for uncertain tax positions as more definitive information becomes available from taxing authorities, and upon completion of tax audits and expiration of statutes of limitations. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. At December 31, 2020, the Company had approximately $10 thousand of accrued interest and penalties, before any tax benefit, related to uncertain tax positions. The Company has analyzed filing positions in all the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The 2017 tax year are forward are open to examination for federal income tax purposes, and the 2015 tax year and forward are open to examination for state income tax purposes. The IRS audit examinations of the Company’s income tax returns for the years 2013 through 2016 was completed during the quarter ended June 30, 2020. The Company obtained the Joint Committee on Taxation approval of the net operating loss carryback refund claims filed under the 2020 CARES Act and the IRS audit examinations of the Company’s income tax returns for the years 2013 through 2016 was finalized during the quarter ended March 31, 2021. The IRS examinations had no adverse material impact on the Company’s overall financial results as at December 31, 2021. The FTB audit examinations of the Company’s income tax returns for the years 2013 through 2015 was completed during the quarter ended December 31, 2020. The audit closing agreement was finalized during the quarter ended March 31, 2021 with no adverse material impact on the Company’s overall financial results as at December 31, 2021. |
Regulatory
Regulatory | 12 Months Ended |
Dec. 31, 2021 | |
Regulatory [Abstract] | |
Regulatory | Regulatory The Company is subject to extensive regulation by federal and state governmental agencies and accrediting bodies. In particular, the Higher Education Act of 1965, as amended (“Higher Education Act”), and the regulations promulgated thereunder by the U.S. Department of Education (“Department”) subject the Company and its university partners to significant regulatory scrutiny on the basis of numerous standards that institutions of higher education must satisfy in order to participate in the various federal student financial aid programs under Title IV of the Higher Education Act (“Title IV programs”). After the sale of the University to Global Campus, the Company remains responsible for liabilities resulting from any violation of these regulatory requirements during the time it owned and operated the University, either directly or by an obligation to indemnify Global Campus. Department of Education On-Site Program Review of former Ashford University In December 2016, the Department informed the University that it intended to continue the on-site program review, which commenced in January 2017 and initially covered the 2015-2016 and 2016-2017 award years, but may be expanded if the Department deems such expansion appropriate. To date, the Company has not received a draft report from the Department. Department of Education Close Out Audit of University of the Rockies The Company previously recorded an expense of $1.5 million during the fiscal year 2018, in relation to the close out audit of University of the Rockies resulting from its merger with the University in October 2018. The expense was recorded in relation to borrower defense to repayment regulations. On September 26, 2019, the Department sent the University a Final Audit Determination letter for the University of the Rockies. This letter confirmed that with the exception of the borrower defense to repayment regulations, none of the other audit findings resulted in financial liability. The Department also stated that additional liabilities could accrue in the future. On December 19, 2019, the Company filed an administrative appeal with the Department appealing the alleged liability on the basis that the University of Rockies did not close but rather merged with the University. The briefing on the appeal is complete and the Company is awaiting a decision by the administrative law judge. WSCUC Accreditation of Global Campus (formerly Ashford University) Global Campus is regionally accredited by WASC Senior College and University Commission (“WSCUC”). In July 2019, WSCUC acted to reaffirm accreditation through Spring 2025. In connection with the Purchase Agreement by and among the Company and the University of Arizona, the Company submitted to WSCUC, in July 2020, a substantive change application for a change in ownership from the University to Global Campus which required review and approval by the Substantive Change Committee and the Structural Change Committee of the Commission. In November 2020, WSCUC approved the change of control application filed to complete the Sale Transaction, subject to certain conditions. WSCUC notified Global Campus that the provisions of the Notice of Concern issued as part of the reaffirmation of the University in July 2019 also remain in effect. Department of Education Regulation On December 1, 2020, the parties to the Purchase Agreement entered into Amendment No. 1 to the Purchase Agreement (“Amendment”) pursuant to which, among other things, the University of Arizona and Global Campus waived the closing condition regarding issuance of a pre-acquisition review notice by the Department of Education. Under the terms of the Purchase Agreement, as amended, the Closing was subject to customary closing conditions for transactions in this sector. The Department is expected to conduct a post-closing review of Global Campus following the Sale Transaction, consistent with the Department’s procedures during which the Department makes a determination on the institution’s request for recertification from the Department following the change of control, including whether to impose or place other conditions or restrictions. To be eligible to participate in Title IV programs, an institution must comply with the Higher Education Act and the regulations thereunder that are administered by the Department. Borrower Defense to Repayment On October 28, 2016, the Department published borrower defense to repayment regulations to change processes that assist students in gaining relief under certain provisions of the Direct Loan Program regulations. These defense to repayment regulations allow a borrower to assert a defense to repayment on the basis of a substantial misrepresentation, any other misrepresentation in cases where certain other factors are present, a breach of contract or a favorable nondefault contested judgment against a school for its act or omission relating to the making of the borrower’s loan or the provision of educational services for which the loan was provided. In addition, the financial responsibility standards contained in the new regulations establish the conditions or events that trigger the requirement for an institution to provide the Department with financial protection in the form of a letter of credit or other security against potential institutional liabilities. Triggering conditions or events include, among others, certain state, federal or accrediting agency actions or investigations, and in the case of publicly traded companies, receipt of certain warnings from the SEC or the applicable stock exchange, or the failure to timely file a required annual or quarterly report with the SEC. The new regulations also prohibit schools from requiring that students agree to settle future disputes through arbitration. On March 15, 2019, the Department issued guidance for the implementation of parts of the regulations. The guidance covers an institution’s responsibility in regard to reporting mandatory and discretionary triggers as part of the financial responsibility standards, class action bans and pre-dispute arbitration agreements, submission of arbitral and judicial records, and repayment rates. On August 30, 2019, the Department finalized the regulations derived from the 2017-2018 negotiated rulemaking process and subsequent public comments. This version of the borrower defense regulations applies to all federal student loans made on or after July 1, 2020, and, among other things: grants borrowers the right to assert borrower defense to repayment claims against institutions, regardless of whether the loan is in default or in collection proceedings; allows borrowers to file defense to repayment claims three years from either the student’s date of graduation or withdrawal from the institution; and gives students the ability to allege a specific amount of financial harm and to obtain relief in an amount determined by the Department, which may be greater or lesser than their original claim amount. It also includes financial triggers and other factors for recalculating an institution’s financial responsibility composite score that differ from those in the 2016 regulations. On March 18, 2021, the Department announced it would adopt a streamlined approach for granting full debt relief to borrowers reversing the methodology first announced in December 2019 that allowed for partial student loan cancellation for borrowers. The Department determined that the previous methodology did not result in an appropriate relief determination. In July 2020, the Department notified the Company that they would be initiating a preliminary review of borrower defense applications from borrowers who made claims regarding the University. As part of the initial fact-finding process, the Department will send individual student claims to the University and allow the institution the opportunity to submit a response to the borrower’s allegations. In 2020, the Company received and timely responded to the submitted claims. The Company has responded to everything received and cannot predict the outcome of this the Department's review at this time. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Retirement PlansThe Company maintains an employee savings plan (the “401(k) Plan”) that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code of 1986, as amended. Under the 401(k) Plan, participating employees may contribute a portion of their pre-tax earnings up to the Internal Revenue Service annual contribution limit. Additionally, the Company may elect to make matching contributions into the 401(k) Plan in its sole discretion. The Company’s total expense related to the 401(k) Plan was $1.8 million and $2.3 million for the years ended December 31, 2021 and 2020, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation From time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. When the Company becomes aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. In accordance with GAAP, the Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated. Where a range of loss can be reasonably estimated, the best estimate within that range should be accrued. If no estimate is better than another, the Company records the minimum estimated liability in the range. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the specific claim if the likelihood of a potential loss is reasonably possible and the amount involved could be material. The Company continuously assesses the potential liability related to the Company’s pending litigation and revises its estimates when additional information becomes available. Other than the specific liabilities assumed by Global Campus, the Company and AU LLC will generally remain responsible for liabilities of the University relating to periods prior to the closing of the Sale Transaction. Below is a list of material legal proceedings to which the Company or its subsidiaries is a party. California Attorney General Investigation of For-Profit Educational Institutions In January 2013, the Company received from the Attorney General of the State of California (the “CA Attorney General”) an Investigative Subpoena relating to the CA Attorney General’s investigation of for-profit educational institutions. Pursuant to the Investigative Subpoena, the CA Attorney General requested documents and detailed information for the time period March 1, 2009 to present. On July 24, 2013, the CA Attorney General filed a petition to enforce certain categories of the Investigative Subpoena related to recorded calls and electronic marketing data. On September 25, 2013, the Company reached an agreement with the CA Attorney General to produce certain categories of the documents requested in the petition and stipulated to continue the hearing on the petition to enforce from October 3, 2013 to January 9, 2014. On January 13, 2014 and June 19, 2014, the Company received additional Investigative Subpoenas from the CA Attorney General each requesting additional documents and information for the time period March 1, 2009 through each such date. Representatives from the Company met with representatives from the CA Attorney General’s office on several occasions to discuss the status of the investigation, additional information requests, and specific concerns related to possible unfair business practices in connection with the Company’s recruitment of students and debt collection practices. The parties also discussed a potential resolution involving injunctive relief, other non-monetary remedies and a payment to the CA Attorney General and in the third quarter of 2016, the Company recorded an expense of $8.0 million related to the cost of resolving this matter. The parties did not reach a resolution and on November 29, 2017, the CA Attorney General filed suit against the Company. The Company emphatically denies the allegations made by the CA Attorney General that it ever deliberately misled its students, falsely advertised its programs, or in any way were not fully accurate in its statements to investors. A trial took place from November 2021 through December 2021. On March 7, 2022, the Superior Court of the State of California, County of San Diego (the “Court”), issued a Statement of Decision regarding the lawsuit in favor of the CA Attorney General. In the Statement of Decision, the Court ordered the Company to pay $22.4 million in statutory penalties. As a result, the Company has accrued an additional $14.3 million in the fourth quarter of 2021, for a total of $22.4 million as of December 31, 2021. The Court denied the CA Attorney General’s demands for restitution and injunctive relief finding no evidence postdating 2017 that would necessitate an injunction. The Company is disappointed by the Court’s decision and believes that its practices were at all times in compliance with California law. The Company is currently considering all options available to it related to the Statement of Decision. On April 7, 2022, the Company filed a motion for a new trial and/or to set aside and vacate the judgement, which is currently set for a hearing on May 13, 2022. |
Concentration of Risk
Concentration of Risk | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Concentration of Risk | Concentration of Risk Concentration of Revenue Prior to December 1, 2020, the Company derived the majority of its revenues from students whose source of funding is through Title IV programs. Revenue derived from government tuition assistance for military personnel, including veterans, is not considered federal student aid for purposes of calculations under the 90/10 rule. Title IV programs are subject to political and budgetary considerations and are subject to extensive and complex regulations. Subsequent to December 1, 2020, the majority of the Company's revenue is attributable to its contractual relationship with Global Campus. Concentration of Credit Risk The Company maintains its cash and cash equivalents accounts in financial institutions. Accounts at these institutions are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The Company performs ongoing evaluations of these institutions to limit its concentration risk exposure. Concentration of Sources of Supply The Company is dependent on a third-party provider for its online platform, which includes a learning management system that stores, manages and delivers course content, enables assignment uploading, provides interactive communication between students and faculty, and supplies online assessment tools. The partial or complete loss of this source may have an adverse effect on the Company’s revenues and results of operations. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Prior to December 1, 2020, the Company operated in one segment for reporting purposes. Following the Sale Transaction, the Company now operates in two reportable segments: University Partners and Zovio Growth. These segments were recast based upon the Company’s respective offerings. On December 1, 2020, the Company consummated the Sale Transaction. For additional information and description of the Sale Transaction, see Note 1, “Nature of Business.” The Company reports segment information based upon the management approach, and the Sale Transaction resulted in a change in how the chief operating decision maker viewed the operations moving forward. This change included the creation of three operating segments: Fullstack, TutorMe, and Zovio, and two reportable segments: University Partners and Zovio Growth. The Company’s operating segments are determined based on (i) financial information reviewed by the chief operating decision maker, the CEO, (ii) internal management and related reporting structure, and (iii) the basis upon which the CEO makes resource allocation decisions. The Fullstack and TutorMe operating segments are aggregated into a single reportable segment called Zovio Growth. The aggregation of the Fullstack and TutorMe operating segments is based on their uniform customer bases and methods of services provided, as well as evaluation of quantitative thresholds as required by ASC 280-10-50-12. Based on these same quantitative tests, the Zovio operating segment is a separate reportable segment, University Partners. This change in segment reporting did not have any impact on the determination of reporting units used to assess impairment under ASC 350, Intangibles - Goodwill and Other. The Company’s University Partners segment includes the technology and services provided to colleges and universities to enable the online delivery of degree programs and the related goods and services. University Partners also includes the tuition revenue related to the University prior to the Sale Transaction on December 1, 2020. Segment Performance The following table summarizes financial information regarding each reportable segment’s results of operations for the periods presented (in thousands): Year Ended December 31, 2021 2020 Revenue by segment University Partners $ 232,793 $ 376,220 Zovio Growth 30,240 20,901 Total revenue and other revenue $ 263,033 $ 397,121 Segment profitability University Partners $ (26,551) $ (41,182) Zovio Growth (7,724) (9,315) Total segment profitability(1) $ (34,275) $ (50,497) (1) Segment profitability represents EBITDA. The following table reconciles total loss before income taxes to total segment profitability (in thousands): Year Ended December 31, 2021 2020 Loss before income taxes $ (42,478) $ (62,020) Adjustments: Interest expense (income), net (130) 120 Depreciation and amortization expense 8,333 11,403 Total segment profitability $ (34,275) $ (50,497) For the years ended December 31, 2020, the legacy University accounted for $356.1 million of the University Partners segment revenue. For each of the years ended December 31, 2021 and 2020, there were no customers or individual university clients which accounted for 10% or more of the Zovio Growth segment revenue. The Company’s total assets by segment are as follows (in thousands): As of December 31, 2021 2020 University Partners $ 86,628 $ 111,830 Zovio Growth 62,406 49,476 Total assets $ 149,034 $ 161,306 As of December 31, 2021, approximately $36.2 million of the assets in University Partners were considered to be entity-wide assets. The Company’s accounts receivable and deferred revenue in each segment are as follows (in thousands): As of December 31, 2021 2020 University Partners $ 78 $ 45 Zovio Growth 9,553 7,159 Total accounts receivable $ 9,631 $ 7,204 University Partners $ — $ 10 Zovio Growth 14,939 8,080 Total deferred revenue and student deposits, current $ 14,939 $ 8,090 As of December 31, 2021 and 2020, respectively, the University Partners segment net accounts receivable balance was immaterial. As of each December 31, 2021 and 2020, respectively, there were no individual partners or customers which accounted for 10% or more of the Zovio Growth segment net accounts receivable balance, as customers are individual students, or third parties, paying on their behalf, rather than university clients. The Company’s goodwill amounts as of each December 31, 2021 and 2020 are fully attributable to the Zovio Growth Segment. For additional information on goodwill, see Note 9, “Goodwill and Intangibles, Net.” |
Subsequent Events (Notes)
Subsequent Events (Notes) | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company performed an evaluation of events occurring between the end of our most recent fiscal year and the date of filing these consolidated financial statements. On March 7, 2022, the Superior Court of the State of California, County of San Diego (the “Court”), issued a Statement of Decision regarding the lawsuit in favor of the CA Attorney General. In the Statement of Decision, the Court ordered the Company to pay $22.4 million in statutory penalties. The Company has accrued for the $22.4 million within accounts payable and accrued liabilities, see also Note 10, “Accounts Payable and Accrued Liabilities” and recorded $14.3 million of additional legal expense as of and for the year ended December 31, 2021, respectively. We are currently considering all options available and have filed a motion for a new trial on the Court’s decision. Regardless of the ultimate outcome, this decision could have a material impact on our financial condition. See Note 19, “Commitments and Contingencies,” for further information. The majority of our cash comes from our Services Agreement with our largest customer. The service fees in the Services Agreement are subject to certain minimum residual liability adjustments, including performance-based adjustments, minimum profit level adjustments, and excess direct cost adjustments. These adjustments are all variable in nature in that they depend upon the Company’s performance, and to a certain extent the performance of our customer, during each service period. On April 11, 2022 the Company and their largest customer modified the payment terms from monthly to bi-monthly for the months of July, August and September 2022. On April 14, 2022, the Company entered into a Financing Agreement (the “Credit Facility”) among the Company, as borrower, each of its wholly-owned subsidiaries as subsidiary guarantors (the “Guarantors”), the lenders party thereto from time to time (the “Lenders”) and Blue Torch Finance LLC, as administrative agent and collateral agent for the Lenders (the “Agent”). The Credit Facility provides for, among other things, a term loan in the aggregate principal amount of $31.5 million (the “Term Loan”). The proceeds of the Term Loan will be used (i) if necessary, to satisfy any final judgement in the CA Attorney General lawsuit, and (ii) thereafter, to fund the working capital of the Company and the Guarantors. Subject to the terms of Credit Facility, the Term Loan bears interest at a rate per annum equal to LIBOR plus 9.0%, payable monthly. The principal amount of the Term Loan will be repayable in equal quarterly installments of $393,750 beginning June 30, 2023 and through March 31, 2025, with the remaining unpaid principal amount of the Term Loan, and all accrued and unpaid interest thereon, due and payable on the maturity date of April 14, 2025. The Credit Facility contains customary representations, warranties, affirmative and negative covenants (including financial covenants), and indemnification provisions in favor of the Agent and the Lenders. The financial covenants include a minimum cash flow covenant that takes effect six months following the Effective Date and that is to be tested on a monthly basis for the trailing twelve month period, a minimum liquidity covenant that requires the Company to maintain unrestricted cash on hand at all times of at least $7.5 million (inclusive of any proceeds of the Term Loan in excess of the amounts used to satisfy any final judgment in the CA Attorney General lawsuit, and minimum revenue covenants applicable to each of the Company’s Fullstack Academy, LLC and TutorMe, LLC subsidiaries and that are to be tested on a monthly basis beginning June 30, 2022 for the trailing twelve month period. In connection with the Credit Facility, the Company issued warrants (the “Warrants”) to the Lenders to purchase at any time or from time to time on or after the date that is six months from the Effective Date, at an exercise price of $0.01 per share, such number of shares of common stock of the Company as equals 5.0% of the outstanding fully-diluted shares of common stock of the Company as of the issuance date. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States (“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. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) The Company has no components of other comprehensive income (loss), and therefore, comprehensive loss equals net loss. |
Cash and Cash Equivalents | Cash Equivalents and Restricted Cash Cash and cash equivalents is comprised of cash and other short-term highly liquid investments that are readily convertible into known amounts of cash. The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. |
Restricted Cash | The Company’s restricted cash is primarily held in money market accounts, and is excluded from cash and cash equivalents on the Company’s consolidated balance sheets. Restricted cash represents amounts held as collateral for letters of credit. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows. As of December 31, 2021 2020 Cash and cash equivalents $ 28,265 $ 35,462 Restricted cash, current 9,288 20,035 Total cash, cash equivalents and restricted cash $ 37,553 $ 55,497 |
Investments | Investments The Company has historically held investments that consisted of mutual funds, corporate notes and bonds, and certificates of deposit. As of December 31, 2021, the Company held investments solely in mutual funds. The Company’s investments are denominated in U.S. dollars, are investment grade and are readily marketable. The Company considers as current assets those investments which will mature or are likely to be sold in less than one year. The Company classifies its investments as either trading, available-for-sale or held-to-maturity. Trading securities are those bought and held principally to sell in the short-term, with gains or losses from changes in fair value flowing through current earnings. Available-for-sale securities are carried at fair value as determined by quoted market prices, with unrealized gains and losses, net of tax, reported as a separate component of comprehensive income (loss) and stockholders’ equity. Held-to-maturity securities would be carried at amortized cost. Amortization of premiums, accretion of discounts, interest, and realized gains and losses are included in other income (loss), net in the consolidated statements of income (loss). The Company regularly monitors and evaluates the realizable value of its investments. If events and circumstances indicate that a decline in the value of these assets has occurred and is other-than-temporary, the Company would record a charge to other income (loss), net in the consolidated statements of income (loss). |
Deferred Compensation | Deferred Compensation The Company has a deferred compensation plan, into which eligible participants can defer a maximum of 80% of their regular compensation and a maximum of 100% of their incentive compensation. The amounts deferred by the participant under this plan are credited with earnings or losses based upon changes in values of participant elected notional investments. Each participant is fully vested in the participant amounts deferred. The Company may make contributions that will generally vest according to a four-year vesting schedule. After four years of service, participants become fully vested in the employer contributions upon reaching normal retirement age, death, disability or a change in control. The Company’s obligations under the deferred compensation plan totaled $0.8 million and $1.4 million as of December 31, 2021 and 2020, respectively, and are included in other long-term liabilities in the consolidated balance sheets. The Company’s assets relating to the deferred compensation plan totaled $1.0 million and $1.5 million as of December 31, 2021 and 2020, respectively, and are included in investments in the consolidated balance sheets. |
Fair Value Measurements | Fair Value Measurements The Company uses the three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: (i) Level 1, defined as observable inputs such as quoted prices in active markets; (ii) Level 2, defined as inputs other than quoted prices in active markets that are either observable directly or indirectly, through market corroboration, for substantially the full term of the financial instrument; and (iii) Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Accounts receivable represents the amount management expects to collect under each customer contract and is primarily related to the Company’s subsidiaries, Fullstack and TutorMe. The Company adjusts its accounts receivable for an allowance for credit losses at each reporting period, as deemed necessary. The Company determines its allowance for credit losses using a loss-rate method combined with an aging schedule approach, which is appropriate given the short-term nature of a substantial majority of the Company’s receivables and as collections vary significantly based upon a receivable’s aging bucket. The Company calculates historical loss rates for receivables on the basis of the different risk profiles and historical loss-rate experience with each type of customer. Additionally, the Company monitors macroeconomic activity as well as other current conditions and their potential impact on collections to ensure the historical experience remains in line with current conditions and future short-term expectations. The allowance for credit losses is recorded within technology and academic services in the consolidated statements of income (loss). The Company writes off accounts receivable when an account is deemed uncollectible, which typically occurs when the Company has exhausted all collection efforts. |
Property and Equipment | Property and Equipment Property and equipment are recognized at cost less accumulated depreciation. Depreciation is computed using the straight-line method based on estimated useful lives of the related assets as follows: Furniture and office equipment 3 - 7 years Software 3 - 5 years Vehicles 5 years Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful lives of the assets. Upon the retirement or disposition of property and equipment, the related cost and accumulated depreciation is removed and a gain or loss is recorded within the general and administrative expense in the consolidated statements of income (loss). Repairs and maintenance costs are expensed in the period incurred. |
Leases | Leases In accordance with Accounting Standard Update (“ASU”) 2016-02, Leases (ASC 842) (“ASC 842”), leases are evaluated and classified as either operating or finance leases. The Company does not have any finance leases. The Company’s operating leases are included in operating lease assets, accounts payable and accrued liabilities, and rent liability on the consolidated balance sheets. Operating lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on information available at the date of adoption or lease commencement or modification date, as applicable, in calculating the present value of its lease payments. The incremental borrowing rate is determined using the U.S. Treasury rate adjusted to account for the Company’s credit rating and the collateralized nature of operating leases. The operating lease asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line method over the term of the lease. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company assesses potential impairment to its long-lived assets under ASC 360, Property and Equipment. The Company makes this assessment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recorded if the carrying amount of the long-lived asset is not recoverable. 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. The Company’s qualitative assessment indicated that no impairment in the Company’s long-lived assets was deemed necessary as of December 31, 2021. |
Goodwill and Indefinite-Lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets The Company tests goodwill and indefinite-lived intangible assets for impairment, testing annually in the third quarter of each fiscal year, or more frequently if events and circumstances warrant. Under ASC 350, Intangibles - Goodwill and Other, to evaluate the impairment of goodwill, the Company first assesses qualitative factors, such as deterioration in general economic conditions or negative company financial performance, to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. To evaluate the impairment of the indefinite-lived intangible assets, the Company assesses the fair value of the assets to determine whether they were greater or less than the carrying values. Determining the fair value of indefinite-lived intangible assets is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions are inherently uncertain and may include such items as growth rates used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and a determination of appropriate market comparables. The Company has three distinct reporting units including (i) Zovio, (ii) Fullstack and (iii) TutorMe. The Fullstack and TutorMe reporting units have goodwill associated with them. During the third quarter of 2021, the Company’s quantitative assessment of goodwill and indefinite-lived intangible assets noted no impairment indicators in either the Fullstack or the TutorMe reporting unit, and noted a material amount of fair value in excess of the carrying amount.. There were no additional triggering events noted during the fourth quarter of fiscal 2021 and therefore there was no impairment of its goodwill amounts. The Company also has definite-lived intangible assets, which primarily consist of purchased intangibles and capitalized curriculum development costs. The definite-lived intangible assets are recognized at cost less accumulated amortization. Amortization is computed using the straight-line method based on estimated useful lives of the related assets. |
Notes Payable | Notes Payable The fair value of the Company’s outstanding notes payable was estimated using the net present value of the payments, discounted at an interest rate consistent with market interest rates. The Company, through Fullstack, had previously entered into a contract whereby its counterparty advanced funds to the Company for certain program development costs, which the Company was obligated to repay out of future revenues from the developed program. The Company recognized these advances as a debt obligation. During 2021, the notes payable contract was amended and the amount was revalued. As such, included within the other income (loss), net, on the consolidated statements of income (loss) for the year ended December 31, 2021, is an offset of interest expense in the amount of $3.1 million, as well as a loss on extinguishment of debt of $2.8 million, the net impact of which is immaterial. |
Revenue, Other Revenue and Deferred Revenue | Revenue, Other Revenue and Deferred Revenue Revenues are recognized when control of the promised goods or services are transferred, in an amount that reflects the consideration the Company expects to be entitled in exchange for those goods or services. Determining whether a valid customer contract exists includes an assessment of whether amounts due under the contract are collectible. The Company performs this assessment at the beginning of every contract and subsequently thereafter if new information indicates there has been a significant change in facts and circumstances. On December 1, 2020, the Company entered into the Services Agreement with Global Campus whereby the Company will provide certain educational technology and support services, which has an initial term of just over fifteen years, subject to renewal options and certain early termination provisions. The amounts earned from the Services Agreement are within the scope of ASC 606, Revenue from Contracts with Customers (“ASC 606”), and are denoted as revenue on the consolidated statements of income (loss). On December 1, 2020, the Company also entered into a transition services agreement with Global Campus whereby the Company will provide certain temporary transition services (the “Transition Services Agreement”), which has a term of three years. The amounts earned from the Transition Services Agreement are denoted as other revenue on the consolidated statements of income (loss). The Services Agreement has a single performance obligation, as the promises to provide the identified services are not distinct within the context of these agreements. The single performance obligation constitutes a series of distinct services as the customer benefits as services are provided. Service revenue is recognized over time using the input method. The input method provides a faithful depiction of the performance toward complete satisfaction of the performance obligation and can be tied to the direct cost incurred. The service fees received over the term of the agreement are variable in nature in that they are dependent upon the number of students attending the university and revenues generated from those students during the service period. The service fees are subject to certain adjustments, including performance-based adjustments, minimum profit level adjustments, and excess direct cost adjustments. These adjustments are all variable in nature in that they depend upon the Company’s performance during each service period. Such adjustments are presented as minimum residual liability within accounts payable and accrued liabilities in the consolidated financial statements. The minimum residual liability calculation at December 31, 2021 covers the period from July 1, 2021 to June 30, 2022. As such, the calculation includes actual financial information from July 1, 2021 through December 31, 2021 and forecasted financial information from January 1, 2022 through June 30, 2022. The main inputs include the Company’s forecasts of its direct costs as well as the Company’s forecasts of Global Campus’ revenues and operating expenses which directly impact the minimum residual liability. The Company’s six months forecast of Global Campus revenues and operating expenses is a management estimate which requires significant judgment. In determining the forecast management utilizes the contractual budget prepared by Global Campus and then adjust budgeted revenue based on actual revenue from July 1, 2021 to December 31, 2021 as well as projected student enrollment. Budgeted Global Campus operating expenses are then adjusted based on actual expenses from July 1, 2021 to December 31, 2021 and expected Global Campus employee headcount. The $15.0 million recorded in accounts payable and accrued liabilities as of December 31, 2021 represents half of the expected minimum residual liability that will be due to Global Campus in June 2022. The amount owed could be materially different than the current estimate projected by management. The Company allocates variable consideration to the distinct increments of service to which it relates, as the variability is directly related to the Company’s effort to satisfy the distinct increments of service provided. This is consistent with the allocation objective in ASC 606. The Company meets the criteria in the standard and exercises the practical expedient to not disclose the aggregate amount of the transaction price allocated to the single performance obligation that is unsatisfied as of the end of the reporting period. The Company does not disclose the value of unsatisfied performance obligations because the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a service that forms part of a single performance obligation. The Company, through Fullstack, offers both full-time and part-time technology bootcamps. The tuition fees for these programs are recognized as revenue as the services are provided to the student, which occurs over the applicable period of instruction. For most Fullstack programs, tuition is collected prior to the start of the cohort; however, for certain programs students can defer payment until completion of the program and for these students an accounts receivable balance is recorded. The Company, through TutorMe, provides online on-demand tutoring services through hourly and access license contracts. Revenue for these contracts are recognized based on hours used or ratably over the contract period depending on the type of contract. For most TutorMe contracts, cash is collected at or near the onset of the contract. The collected cash is recognized as deferred revenue until recognized into revenue. Prior to December 1, 2020, the majority of the amounts earned by the Company were from tuition, technology fees, and digital materials related to students whose primary funding source is governmental funding. The amounts earned from these streams are denoted as university-related revenue on the consolidated statements of income (loss). Tuition represents amounts charged for course instruction, and technology fees represent amounts charged for the students’ use of the technology platform on which course instruction is delivered. Digital materials fees represent amounts charged for the digital textbooks that accompany the majority of courses taught at the Company’s institution. The majority of tuition and technology fees are recognized as revenue as control of the services is transferred to the student, which occurs over the applicable period of instruction. Similarly, the majority of digital materials fees are recognized as revenue when control of the product has been transferred to the student, which occurs when the student is granted unrestricted access to the digital textbook, generally, on the first day of the course. Revenue generated from students within the conditional admission period is deferred and recognized when the student matriculates into the institution, which occurs in the fourth week of the course. Prior to December 1, 2020, the Company’s institutions’ online students would generally enroll in a program that encompasses a series of five to six-week courses that are taken consecutively over the length of the program. With the exception of those students under conditional admission and students enrolled under the Full Tuition Grant (“FTG”) program, online students are billed on a payment period basis on the first day of a course. Students under conditional admission are billed for the payment period upon matriculation.. |
Workers' Compensation | Workers' Compensation The Company records a gross liability for estimated workers’ compensation claims, incurred but not yet reported, as of each balance sheet date. The Company also records the gross insurance recoverable due for individual claim amounts. This is recorded as an other asset and as an equal accrued liability. The stop-loss premium is determined annually, but invoiced and paid on a quarterly basis. The related insurance premiums are expensed ratably over the coverage period. |
Income Taxes | Income Taxes The Company accounts for its income taxes using the asset-liability method whereby deferred tax assets and liabilities are determined based on temporary differences between the bases used for financial reporting and income tax reporting purposes. Deferred income taxes are provided based on the enacted tax rates expected to be in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for deferred tax assets if it is more-likely-than-not that the Company will not realize those tax assets through future operations. The Company evaluates and accounts for uncertain tax positions using a two-step approach. Recognition (step one) 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. Measurement (step two) determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Derecognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is measured at the grant date fair value of the award and is expensed over the vesting period. The fair value of the Company’s restricted stock units (“RSUs”) is based on the market price of the Company’s common stock on the date of grant. The Company estimates the fair value of stock options on the grant date using the Black-Scholes option pricing model. The Company estimates the fair value of its performance stock units (“PSUs”) on the grant date using a Monte Carlo simulation model. Determining the fair value of stock-based awards at the grant date under these models 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. The amount of stock-based compensation expense recognized during a period is based on the portion of the awards that are ultimately expected to vest. The Company estimates award forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company’s equity incentive plans require that stock option awards have an exercise price that equals or exceeds the closing price of the Company’s common stock on the date of grant. Stock-based compensation expense for stock-based awards is recorded in the consolidated statements of income (loss), net of estimated forfeitures, using the graded-vesting method over the requisite service periods of the respective stock awards. The requisite service period is generally the period over which an employee is required to provide service to the Company in exchange for the award. |
Technology and Academic Services | Technology and Academic Services Technology and academic services costs consist primarily of costs related to ongoing maintenance of educational infrastructure, including online course delivery and management, student records, assessment, customer relations management and other internal administrative systems. This also includes costs to provide support for curriculum and new program development, support for faculty training and development and technical support. This expense category includes salaries, benefits and share-based compensation, information technology costs, curriculum and new program development costs (which are expensed as incurred), provision for bad debt and other costs associated with these support services. This category also includes an allocation of depreciation, amortization, human resources, rent, and occupancy costs attributable to the provision of these services. |
Counseling Services and Support | Counseling Services and Support Counseling services and support costs consist primarily of costs including team-based counseling and other support to prospective and current students as well as financial aid processing. This expense category includes salaries, benefits and share-based compensation, and other costs such as dues, fees and subscriptions and travel costs. This category also includes an allocation of depreciation, amortization, human resources, rent, and occupancy costs attributable to the provision of these services. |
Marketing and Communication | Marketing and Communication Marketing and communication costs consist primarily of lead acquisition, digital communication strategies, brand identity advertising, media planning and strategy, video, data science and analysis, marketing to potential students and other promotional and communication services. This expense category includes salaries, benefits and share-based compensation for marketing and communication personnel, brand advertising, marketing leads and other promotional and communication expenses. This category also includes an allocation of depreciation, amortization, human resources, rent, and occupancy costs |
General and Administrative | General and Administrative General and administrative costs consist primarily of compensation and benefit costs, including related stock-based compensation, for employees engaged in corporate management, finance, compliance, and other corporate functions. This category also includes an allocation of depreciation, amortization, human resources, rent, and occupancy costs attributable to the provision of these services. |
University-Related Expenses | University-Related Expenses University-related expenses represent those costs that were transferred to Global Campus in the Sale Transaction and that are no longer incurred by the Company. These costs previously included instructor fees and other employee costs, student related bad debt expense, license fees for licenses transferred to Global Campus and other costs. |
Legal Settlement Expense | Legal Expense Legal expense is comprised of charges related to the estimated amounts to resolve the previously disclosed investigation for California Attorney General. |
Restructuring and Impairment Charges | Restructuring and Impairment ChargesRestructuring and impairment expenses are primarily comprised of (i) severance costs related to headcount reductions made in connection with restructuring plans and (ii) estimated lease losses related to facilities vacated or consolidated under restructuring plans |
Loss on Transaction | Loss on Transaction Loss on transaction amount represents the net assets transferred in the Sale Transaction, as well as other transaction-related expenses and costs to sell. The loss on transaction is recorded in the consolidated statements of income (loss). The Company recorded a loss on transaction of $54.8 million at closing, which is comprised of $50.4 million of net assets loss, as well as $4.5 million of other transaction-related expenses and costs to sell. The net asset loss includes $62.3 million of cash and cash equivalents transferred to Global Campus on the date of the transaction. All assets transferred to Global Campus were previously included in the University Partners segment. The following are the components of the loss on transaction recorded in 2020: Cash and cash equivalents $ 62,325 Accounts receivable, net of allowance for credit losses 31,247 Prepaid expenses and other current assets 1,014 Property and equipment, net 15 Intangibles, net 7,669 Other long-term assets 1,539 Total assets transferred 103,809 Accounts payable and accrued liabilities 1,051 Deferred revenue and student deposits 48,901 Less: total liabilities transferred 49,952 Plus: other transaction-related expenses and costs to sell 4,546 Less: net asset adjustment 3,606 Loss on transaction $ 54,797 |
Income (Loss) Per Share | Income (Loss) Per Share Basic income per common share is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income per common share is calculated by dividing net income available to common stockholders by the sum of (i) the weighted average number of common shares outstanding during the period and (ii) potentially dilutive securities outstanding during the period, if the effect is dilutive. Potentially dilutive common shares consist of incremental shares of common stock issuable upon the exercise of the stock options and upon the settlement of RSUs and PSUs. |
Segment Information | Segment Information Prior to December 1, 2020, the Company operated in one segment for reporting purposes. Following the Sale Transaction on December 1, 2020, the Company now operates in two reportable segments, including the University Partners Segment and the Zovio Growth Segment. The Company’s reportable segments are determined based on (i) financial information reviewed by the chief operating decision maker, the Chief Executive Officer (“CEO”), (ii) internal management and related reporting structure, and (iii) the basis upon which the CEO makes resource allocation decisions. The Company’s University Partners Segment includes the technology and services provided to colleges and universities to enable the online delivery of degree programs. The inaugural partner in the University Partners Segment is Global Campus. The University Partners Segment also includes the tuition revenue related to the University prior to the Sale Transaction on December 1, 2020. The Company’s Zovio Growth Segment includes our other subsidiaries, including Fullstack and TutorMe. For additional information on segments, see Note 21, “Segment Information.” |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . The amendments in this update require that an entity recognize and measure contract assets and liabilities acquired in a business combination in accordance with Topic 606. An acquirer may assess the process in which the acquiree applied Topic 606 to its revenue contracts. This update will provide a level of review to prove contract assets and liabilities are recorded in accordance with GAAP and consistent with the acquirer’s policies. The amendment in this update will be effective for fiscal years beginning after December 15, 2022 and would be applicable to the Company if business acquisitions are made after the effective date. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Cash, Cash Equivalents and Restricted Cash | As of December 31, 2021 2020 Cash and cash equivalents $ 28,265 $ 35,462 Restricted cash, current 9,288 20,035 Total cash, cash equivalents and restricted cash $ 37,553 $ 55,497 |
Disclosure of Long Lived Assets Held-for-sale | The following are the components of the loss on transaction recorded in 2020: Cash and cash equivalents $ 62,325 Accounts receivable, net of allowance for credit losses 31,247 Prepaid expenses and other current assets 1,014 Property and equipment, net 15 Intangibles, net 7,669 Other long-term assets 1,539 Total assets transferred 103,809 Accounts payable and accrued liabilities 1,051 Deferred revenue and student deposits 48,901 Less: total liabilities transferred 49,952 Plus: other transaction-related expenses and costs to sell 4,546 Less: net asset adjustment 3,606 Loss on transaction $ 54,797 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue Recognition [Abstract] | |
Disaggregation of revenue | The following table presents the Company’s net revenue disaggregated based on the revenue source (in thousands): Year Ended December 31, 2021 2020 Strategic services revenue $ 222,657 $ 18,881 Tuition revenue, net 30,016 344,804 Transition services income 9,934 984 Digital materials revenue, net — 21,258 Technology fee revenue, net — 9,424 Other revenue, net (1) 426 1,770 Revenue and other revenue $ 263,033 $ 397,121 (1) Primarily consists of revenues generated from various services and other miscellaneous fees. The following table presents the Company’s net revenue disaggregated based on the timing of revenue recognition (in thousands): Year Ended December 31, 2021 2020 Over time, over period of service $ 262,736 $ 326,302 Over time, full tuition grant (1) — 50,769 Point in time (2) 297 20,050 Revenue and other revenue $ 263,033 $ 397,121 (1) Represents revenue generated from the corporate FTG program. (2) Represents revenue generated from digital textbooks and other miscellaneous fees. |
Deferred Revenue and Student Deposits | Deferred revenue and student deposits consists of the following (in thousands): As of December 31, 2021 2020 Deferred revenue $ 14,469 $ 7,477 Student deposits 470 613 Total deferred revenue and student deposits $ 14,939 $ 8,090 |
Deferred revenue of Company's contracts with customers | Below are the opening and closing balances of deferred revenue from the Company’s contracts with customers (in thousands): 2021 2020 Opening balance, January 1 $ 7,477 $ 23,356 Closing balance, December 31 14,469 7,477 Increase (Decrease) $ 6,992 $ (15,879) |
Restructuring and Impairment _2
Restructuring and Impairment Charges (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following table summarizes the amounts recorded in the restructuring and impairment charges line item on the Company’s consolidated statements of income (loss) for each of the periods presented (in thousands): Year Ended December 31, 2021 2020 Severance costs $ 2,641 $ 3,004 Lease exit and other costs — 1,839 Total restructuring and impairment charges $ 2,641 $ 4,843 |
Schedule of Restructuring Reserve | The following table summarizes the changes in the Company’s restructuring liability by type during the following periods indicated (in thousands): Student Transfer Costs Severance Costs Lease Exit and Other Costs Total Balance at December 31, 2019 $ 1,296 $ 8,001 $ 976 $ 10,273 Restructuring and impairment charges — 3,004 1,839 4,843 Payments (14) (10,263) (841) (11,118) Balance at December 31, 2020 1,282 742 1,974 3,998 Restructuring and impairment charges — 2,641 — 2,641 Payments — (2,853) (1,576) (4,429) Non-cash transaction — (10) — (10) Balance at December 31, 2021 $ 1,282 $ 520 $ 398 $ 2,200 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Information of Short and Long-term Investments | The following tables summarize the fair value information as of December 31, 2021 and 2020, respectively (in thousands): December 31, 2021 Level 1 Level 2 Level 3 Total Mutual funds $ 974 $ — $ — $ 974 December 31, 2020 Level 1 Level 2 Level 3 Total Mutual funds $ 1,515 $ — $ — $ 1,515 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts receivable, net, consists of the following (in thousands): As of December 31, 2021 2020 Accounts receivable $ 10,562 $ 8,420 Less allowance for credit losses 931 1,216 Accounts receivable, net $ 9,631 $ 7,204 |
Prepaid Expense and Other Cur_2
Prepaid Expense and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consists of the following (in thousands): As of December 31, 2021 2020 Prepaid expenses $ 2,664 $ 3,027 Prepaid licenses 1,233 1,371 Prepaid income taxes — 48 Income tax receivable — 1,644 Prepaid insurance 2,254 1,127 Insurance recoverable 496 404 Other current assets (1) 6,776 4,996 Total prepaid expenses and other current assets $ 13,423 $ 12,617 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment are recognized at cost less accumulated depreciation. Depreciation is computed using the straight-line method based on estimated useful lives of the related assets as follows: Furniture and office equipment 3 - 7 years Software 3 - 5 years Vehicles 5 years Property and equipment, net, consists of the following (in thousands): As of December 31, 2021 2020 Furniture and office equipment $ 22,032 $ 36,146 Software 4,493 7,512 Leasehold improvements 15,921 16,325 Vehicles 22 22 Total property and equipment 42,468 60,005 Less accumulated depreciation and amortization (16,086) (29,430) Total property and equipment, net $ 26,382 $ 30,575 |
Goodwill and Intangibles, Net (
Goodwill and Intangibles, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles, Net | Goodwill and intangibles, net, consists of the following (in thousands): December 31, 2021 Definite-lived intangible assets: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Capitalized curriculum costs $ 13,982 $ (12,796) $ 1,186 Purchased intangible assets 14,185 (9,048) 5,137 Total definite-lived intangible assets $ 28,167 $ (21,844) $ 6,323 Goodwill 23,176 Total goodwill and intangibles, net $ 29,499 December 31, 2020 Definite-lived intangible assets: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Capitalized curriculum costs $ 13,745 $ (12,644) $ 1,101 Purchased intangible assets 14,185 (6,677) 7,508 Total definite-lived intangible assets $ 27,930 $ (19,321) $ 8,609 Goodwill 23,176 Total goodwill and intangibles, net $ 31,785 |
Summary of Estimated Remaining Amortization Expense | The following table summarizes the estimated remaining amortization expense as of each fiscal year ended below (in thousands): Year Ended December 31, 2022 $ 2,524 2023 2,411 2024 835 2025 192 2026 127 Thereafter 234 Total future amortization expense $ 6,323 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | Accounts payable and accrued liabilities consists of the following (in thousands): As of December 31, 2021 2020 Accounts payable $ 5,967 $ 11,246 Accrued salaries and wages 5,434 6,149 Accrued bonus 3,625 11,428 Accrued vacation 3,037 3,369 Accrued litigation and fees 22,376 8,341 Minimum residual liability (1) 14,987 1,216 Accrued expenses 13,400 12,473 Current leases payable 4,492 6,934 Accrued insurance liability 1,404 1,537 Accrued income taxes payable 47 — Total accounts payable and accrued liabilities $ 74,769 $ 62,693 (1) Amount represents approximately 50% of the total amount anticipated to be remitted to Global Campus in June 2022. The amount owed could be materially different than the current estimate projected by management. |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Liabilities, Other than Long-term Debt, Noncurrent [Abstract] | |
Schedule of Other Long-Term Liabilities | Other long-term liabilities consists of the following (in thousands): As of December 31, 2021 2020 Uncertain tax positions $ — $ 28 Notes payable 2,723 2,981 Deferred revenue 807 — Other long-term liabilities 1,585 4,172 Total other long-term liabilities $ 5,115 $ 7,181 |
Lease Obligations (Tables)
Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Lease, Cost | The following table represents the classification and amounts allocated to the various expense line items on the consolidated statements of income (loss) for the year ended December 31, 2021 (in thousands): Operating lease costs $ 8,239 Short-term lease cost 389 Variable lease costs (1) 1,193 Less: Sub-lease income (2,264) Total net lease costs $ 7,557 (1) Variable components of the lease payments such as utilities, taxes and insurance, parking and maintenance costs. Weighted-average remaining lease term (in years): Operating leases 9.6 years Weighted-average discount rate: Operating leases 6.9 % The following table represents the cash flow information of operating leases for the year ended December 31, 2021 (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9,281 |
Lessee, Operating Lease, Liability, Maturity | The following table represents the maturities of lease liabilities, a portion of which is recorded in accounts payable and accrued liabilities, as well as rent liability on the consolidated balance sheet as of December 31, 2021, (in thousands): 2022 $ 7,009 2023 5,316 2024 5,022 2025 4,759 2026 4,763 Thereafter 26,736 Total minimum payments 53,605 Less: Interest (1) (14,907) Total net lease liabilities $ 38,698 (1) Calculated using an appropriate interest rate for each individual lease. See the weighted-average discount rate noted below. |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Common Share | The following table sets forth the computation of basic and diluted loss per share for the periods indicated (in thousands, except per share data): Year Ended December 31, 2021 2020 Numerator: Net loss $ (42,349) $ (48,952) Denominator: Weighted average number of common shares outstanding 33,256 31,959 Effect of dilutive options and stock units — — Diluted weighted average number of common shares outstanding 33,256 31,959 Loss per share: Basic $ (1.27) $ (1.53) Diluted $ (1.27) $ (1.53) |
Antidilutive Securities | The following table sets forth the number of stock options, RSUs and PSUs excluded from the computation of diluted loss per share for the periods indicated because their effect was anti-dilutive (in thousands): Year Ended December 31, 2021 2020 Stock options 1,341 1,757 Stock units and contingent consideration 1,133 1,112 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | The following table presents a summary of stock option activity during the periods indicated (in thousands, except for exercise prices and contractual terms): Options Weighted- Weighted- Aggregate December 31, 2019 2,008 $ 13.42 4.16 $ 393 Granted — $ — Exercised (22) $ 0.36 Forfeitures and expired (361) $ 17.54 December 31, 2020 1,625 $ 12.68 3.63 $ 918 Granted — $ — Exercised — $ — Forfeitures and expired (402) $ 16.52 December 31, 2021 1,223 $ 11.42 2.56 $ 191 Vested and expected to vest at December 31, 2021 1,223 $ 11.42 2.56 $ 191 Exercisable at December 31, 2021 1,223 $ 11.42 2.56 $ 191 |
Schedule of Share-based Payment Award, Equity Instruments Other than Options, Valuation Assumptions [Table Text Block] [Table Text Block] | The weighted-average assumptions for the PSU awards during the year ended December 31, 2021, subject to earning based on the achievement of a market-based measure are noted in the following table: 2021 Grant price per share $ 2.35 Risk-free interest rate 0.2 % Expected dividend yield — Historical volatility 108.4 % Expected life (in years) 2.57 Forfeiture rate 13.0 % Weighted average grant date fair value per share $ 2.50 |
Summary of Restricted Stock Units Activity | A summary of the RSU and PSU activity and related information is as follows (in thousands, except for exercise prices and contractual terms): Restricted Stock Units and Performance Stock Units Time-Based RSU Performance-Based PSU Market-Based PSU Number of Shares Weighted Average Number of Shares Weighted Average Number of Shares Weighted Average Balance at December 31, 2019 2,305 $ 5.04 — $ — 1,070 $ 6.76 Awarded 1,470 $ 2.27 1,059 2.19 — $ — Vested (911) $ 9.67 — — — — Canceled (570) $ 5.14 (43) $ 2.18 (337) $ 7.79 Balance at December 31, 2020 2,295 $ 1.4 1,017 $ 2.19 733 $ 6.28 Awarded 1,680 $ 2.63 195 $ 3.81 1,870 $ 0.90 Vested (1,056) $ 3.83 — — — — Canceled (697) $ 3.59 (566) $ 2.18 (659) $ 5.68 Balance at December 31, 2021 2,222 $ 2.64 645 $ 2.69 1,944 $ 1.30 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense | The components of income tax expense (benefit) are as follows (in thousands): Year Ended December 31, 2021 2020 Current: Federal $ (270) $ (13,238) State 131 284 Foreign 10 5 (129) (12,949) Deferred: Federal — (56) State — (63) — (119) Total $ (129) $ (13,068) |
Schedule of Deferred Tax Assets and Liabilities | Deferred income tax balances reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases and are stated at enacted tax rates expected to be in effect when taxes are paid or recovered. Significant components of the Company’s deferred tax assets and liabilities and balance sheet classifications are as follows (in thousands): As of December 31, 2021 2020 Deferred tax assets: Net operating loss $ 31,841 $ 22,662 Fixed assets 365 — Bad debt 239 303 Vacation accrual 618 673 Stock-based compensation 3,222 3,869 Operating lease liabilities 9,945 7,746 Bonus accrual 846 2,476 Accrued expenses 1,329 4,333 Other 1,154 1,258 Total deferred tax assets 49,559 43,320 Valuation allowance (42,119) (37,375) Net deferred tax assets 7,440 5,945 Deferred tax liabilities: Fixed assets and intangibles — (704) Indefinite-lived intangibles — — Operating lease assets (7,440) (5,045) Other — (196) Total deferred tax liabilities (7,440) (5,945) Total net deferred tax assets (liabilities) $ — $ — |
Schedule of Income Tax Rate Reconciliation | reconciliation of the income tax benefit computed using the federal statutory tax rate of 21% and the Company’s provision for income taxes (in thousands): Year Ended December 31, 2021 2020 Computed expected federal tax expense $ (8,920) 21.0 % $ (13,024) 21.0 % State taxes, net of federal benefit (885) 2.1 (2,476) 4.0 Permanent differences 5,606 (13.2) 436 (0.7) Uncertain tax positions (349) 0.8 (618) 1.0 Stock compensation 696 (1.6) 1,388 (2.2) Federal tax rate change on NOL carryback — — (4,908) 7.9 Domestic production activities — — — — Valuation allowance 3,981 (9.4) 5,698 (9.2) Other (258) 0.6 436 (0.7) Income tax benefit $ (129) 0.3 % $ (13,068) 21.1 % |
Summary of Unrecognized Tax Benefits | beginning and ending amount of unrecognized tax benefits (in thousands): Year Ended December 31, 2021 2020 Unrecognized tax benefits at beginning of period $ 18 $ 2,128 Gross increases - tax positions in prior period — — Gross decreases - tax positions in prior period — (1,661) Gross increases - current period tax positions — — Settlements — (400) Lapse of statute of limitations (18) (49) Unrecognized tax benefits at end of period $ — $ 18 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table summarizes financial information regarding each reportable segment’s results of operations for the periods presented (in thousands): Year Ended December 31, 2021 2020 Revenue by segment University Partners $ 232,793 $ 376,220 Zovio Growth 30,240 20,901 Total revenue and other revenue $ 263,033 $ 397,121 Segment profitability University Partners $ (26,551) $ (41,182) Zovio Growth (7,724) (9,315) Total segment profitability(1) $ (34,275) $ (50,497) (1) Segment profitability represents EBITDA. The following table reconciles total loss before income taxes to total segment profitability (in thousands): Year Ended December 31, 2021 2020 Loss before income taxes $ (42,478) $ (62,020) Adjustments: Interest expense (income), net (130) 120 Depreciation and amortization expense 8,333 11,403 Total segment profitability $ (34,275) $ (50,497) |
Schedule of Total Assets by Segment | The Company’s total assets by segment are as follows (in thousands): As of December 31, 2021 2020 University Partners $ 86,628 $ 111,830 Zovio Growth 62,406 49,476 Total assets $ 149,034 $ 161,306 |
Schedule of Accounts Receivable and Deferred Revenue in Each Segment | The Company’s accounts receivable and deferred revenue in each segment are as follows (in thousands): As of December 31, 2021 2020 University Partners $ 78 $ 45 Zovio Growth 9,553 7,159 Total accounts receivable $ 9,631 $ 7,204 University Partners $ — $ 10 Zovio Growth 14,939 8,080 Total deferred revenue and student deposits, current $ 14,939 $ 8,090 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Cash, Cash Equivalents and Restricted Cash) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Cash, cash equivalents and restricted cash [Abstract] | |||
Cash and cash equivalents | $ 28,265 | $ 35,462 | |
Restricted Cash and Cash Equivalents, Current | 9,288 | 20,035 | |
Total cash, cash equivalents and restricted cash | $ 37,553 | $ 55,497 | $ 92,537 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands | Dec. 01, 2020USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($)reportableSegment | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) |
Financing Receivable, Impaired [Line Items] | |||||||
Deferred compensation, maximum employee contribution, percentage of regular compensation | 80.00% | ||||||
Deferred compensation, maximum employee contribution, percentage of incentive compensation | 100.00% | ||||||
Deferred compensation, requisite service period | 4 years | ||||||
Company obligations under deferred compensation plan | $ 800 | $ 800 | $ 800 | $ 800 | $ 800 | $ 1,400 | |
Advertising costs | 65,200 | 70,200 | |||||
Number of reportable segments | 2 | 2 | |||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | $ 54,797 | ||||||
Interest Expense | 3,100 | ||||||
Gain (Loss) on Extinguishment of Debt | 2,800 | ||||||
Cash and Cash Equivalents [Member] | |||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | 62,325 | ||||||
Accounts Receivable [Member] | |||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | 31,247 | ||||||
Prepaid Expenses and Other Current Assets | |||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | 1,014 | ||||||
Property, Plant and Equipment | |||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | 15 | ||||||
Other Intangible Assets | |||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | 7,669 | ||||||
Other Assets | |||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | 1,539 | ||||||
Assets, Total | |||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | 103,809 | ||||||
Measurement Input, Cost to Sell [Member] | |||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | 4,546 | ||||||
Year-End Adjustment | |||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | 3,606 | ||||||
Accounts Payable and Accrued Liabilities | |||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | 1,051 | ||||||
Liabilities, Total | |||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | 49,952 | ||||||
Other Current Liabilities | |||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | 48,901 | ||||||
Variable Rate Demand Obligation [Member] | |||||||
Financing Receivable, Impaired [Line Items] | |||||||
Debt Securities, Trading, and Equity Securities, FV-NI | 974 | 974 | 974 | $ 974 | $ 974 | 1,515 | |
Sale of Subsidiary Gain (Loss) [Member] | |||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | 50,400 | ||||||
Measurement Input, Cost to Sell [Member] | |||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | 4,500 | ||||||
Cash and Cash Equivalents [Member] | |||||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings [Line Items] | |||||||
Gain (Loss) on Disposition of Assets | $ 62,300 | ||||||
Level 1 | Variable Rate Demand Obligation [Member] | |||||||
Financing Receivable, Impaired [Line Items] | |||||||
Debt Securities, Trading, and Equity Securities, FV-NI | $ 974 | $ 974 | $ 974 | $ 974 | $ 974 | $ 1,515 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Property and Equipment) (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Furniture and office equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 3 years |
Furniture and office equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 7 years |
Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 3 years |
Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 5 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 5 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Goodwill and Intangible Assets) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Summary of Significant Accounting Policies [Abstract] | |
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 |
Revenue Recognition (Details)
Revenue Recognition (Details) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($)reportableSegment | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 01, 2020USD ($) | Jan. 01, 2020USD ($) | Jan. 01, 2019USD ($) | |
Disaggregation of Revenue [Line Items] | |||||||
Revenue and other revenue | $ 263,033 | $ 397,121 | |||||
Deferred Revenue [Abstract] | |||||||
Deferred revenue, opening balance | 14,469 | $ 14,469 | $ 14,469 | 7,477 | $ 7,477 | $ 23,356 | |
Deferred revenue, ending balance | 14,469 | $ 14,469 | $ 14,469 | 7,477 | $ 7,477 | $ 23,356 | |
Deferred revenue, increase (decrease) | 6,992 | (15,879) | |||||
Number of reportable segments | 2 | 2 | |||||
Deferred revenue, revenue recognized | 6,500 | 21,900 | |||||
Contract with Customer, Liability, Deferred Revenue | 14,469 | $ 14,469 | $ 14,469 | 7,477 | |||
Contract with Customer, Liability, Student Deposits | 470 | 470 | 470 | 613 | |||
Contract with Customer, Liability, Current | 14,939 | $ 14,939 | $ 14,939 | 8,090 | |||
Disposal Group, Including Discontinued Operation, Deferred Revenue | $ 15,800 | ||||||
Over time, over period of instruction | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenue and other revenue | 262,736 | 326,302 | |||||
Over time, full tuition grant | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenue and other revenue | 0 | 50,769 | |||||
Point in time | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenue and other revenue | 297 | 20,050 | |||||
Tuition revenue, net | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenue and other revenue | 222,657 | 18,881 | |||||
Digital materials revenue, net | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenue and other revenue | 30,016 | 344,804 | |||||
Technology fee revenue, net | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenue and other revenue | 9,934 | 984 | |||||
Other revenue, net | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenue and other revenue | 0 | 21,258 | |||||
Other revenue | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenue and other revenue | 426 | 1,770 | |||||
Strategic Services Agreement | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Revenue and other revenue | $ 0 | $ 9,424 |
Restructuring and Impairment _3
Restructuring and Impairment Charges - Impairment Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and impairment charges | $ (2,641) | $ (4,843) |
Student transfer agreement costs (credits) | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and impairment charges | 0 | 0 |
Severance costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and impairment charges | (2,641) | (3,004) |
Lease exit and other costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and impairment charges | $ 0 | $ (1,839) |
Restructuring and Impairment _4
Restructuring and Impairment Charges - Restructuring Reserve (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve beginning of period | $ 3,998 | $ 10,273 |
Restructuring and impairment charges | 2,641 | 4,843 |
Payments | (4,429) | (11,118) |
Adjustments | (10) | |
Restructuring reserve end of period | 2,200 | 3,998 |
Student transfer agreement costs (credits) | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve beginning of period | 1,282 | 1,296 |
Restructuring and impairment charges | 0 | 0 |
Payments | 0 | (14) |
Adjustments | 0 | |
Restructuring reserve end of period | 1,282 | 1,282 |
Severance costs | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve beginning of period | 742 | 8,001 |
Restructuring and impairment charges | 2,641 | 3,004 |
Payments | (2,853) | (10,263) |
Adjustments | (10) | |
Restructuring reserve end of period | 520 | 742 |
Lease exit and other costs | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve beginning of period | 1,974 | 976 |
Restructuring and impairment charges | 0 | 1,839 |
Payments | (1,576) | (841) |
Adjustments | 0 | |
Restructuring reserve end of period | $ 398 | $ 1,974 |
Investments (Fair Value Informa
Investments (Fair Value Information) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | $ 0 | |
Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Securities, Trading, and Equity Securities, FV-NI | 974,000 | $ 1,515,000 |
Mutual funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Securities, Trading, and Equity Securities, FV-NI | 974,000 | 1,515,000 |
Mutual funds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Securities, Trading, and Equity Securities, FV-NI | 0 | 0 |
Mutual funds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Securities, Trading, and Equity Securities, FV-NI | $ 0 | $ 0 |
Investments (Differences Betwee
Investments (Differences Between Amortized Cost and Fair Value of Investments) (Details) - Mutual funds - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Debt Securities, Trading, and Equity Securities, FV-NI | $ 974 | $ 1,515 |
Level 1 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt Securities, Trading, and Equity Securities, FV-NI | $ 974 | $ 1,515 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 01, 2020 | Dec. 31, 2019 | |
Receivables [Abstract] | ||||
Accounts receivable | $ 10,562 | $ 8,420 | ||
Less allowance for credit losses | 931 | 1,216 | ||
Accounts receivable | 9,631 | 7,204 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Allowance for Doubtful Accounts Receivable | 931 | 1,216 | $ 13,712 | |
Accounts Receivable, Credit Loss Expense (Reversal) | 1,229 | 14,256 | ||
Deductions | (1,514) | (18,721) | ||
Disposal Group, Including Discontinued Operation, Accounts, Notes and Loans Receivable, Net | 0 | $ (13,612) | ||
Accounts Receivable, Allowance for Credit Loss, Recovery | 0 | 5,581 | ||
Full Tuition Grant Receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Allowance for Doubtful Accounts Receivable | 0 | 1,749 | ||
Accounts Receivable, Credit Loss Expense (Reversal) | 2,176 | |||
Deductions | (2,485) | |||
Disposal Group, Including Discontinued Operation, Accounts, Notes and Loans Receivable, Net | (1,865) | |||
Accounts Receivable, Allowance for Credit Loss, Recovery | 425 | |||
Non-Full Tuition Grant Program Receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Allowance for Doubtful Accounts Receivable | 931 | 1,216 | $ 11,963 | |
Accounts Receivable, Credit Loss Expense (Reversal) | 1,229 | 12,080 | ||
Deductions | (1,514) | (16,236) | ||
Disposal Group, Including Discontinued Operation, Accounts, Notes and Loans Receivable, Net | 0 | $ (11,747) | ||
Accounts Receivable, Allowance for Credit Loss, Recovery | $ 0 | $ 5,156 |
Accounts Receivable, Net (Valua
Accounts Receivable, Net (Valuation Accounts) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 01, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Beginning Balance | $ 1,216 | $ 13,712 | |
Accounts Receivable, Credit Loss Expense (Reversal) | 1,229 | 14,256 | |
Deductions | (1,514) | (18,721) | |
Ending Balance | 931 | 1,216 | |
Accounts Receivable, Allowance for Credit Loss, Recovery | 0 | 5,581 | |
Disposal Group, Including Discontinued Operation, Accounts, Notes and Loans Receivable, Net | 0 | $ (13,612) | |
Non-Full Tuition Grant Program Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Beginning Balance | 1,216 | 11,963 | |
Accounts Receivable, Credit Loss Expense (Reversal) | 1,229 | 12,080 | |
Deductions | (1,514) | (16,236) | |
Ending Balance | 931 | 1,216 | |
Accounts Receivable, Allowance for Credit Loss, Recovery | 0 | 5,156 | |
Disposal Group, Including Discontinued Operation, Accounts, Notes and Loans Receivable, Net | 0 | (11,747) | |
Full Tuition Grant Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Beginning Balance | $ 0 | 1,749 | |
Accounts Receivable, Credit Loss Expense (Reversal) | 2,176 | ||
Deductions | (2,485) | ||
Ending Balance | 0 | ||
Accounts Receivable, Allowance for Credit Loss, Recovery | $ 425 | ||
Disposal Group, Including Discontinued Operation, Accounts, Notes and Loans Receivable, Net | $ (1,865) |
Prepaid Expense and Other Cur_3
Prepaid Expense and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 2,664 | $ 3,027 |
Prepaid licenses | 1,233 | 1,371 |
Prepaid income taxes | 0 | 48 |
Income tax receivable | 0 | 1,644 |
Prepaid insurance | 2,254 | 1,127 |
Reinsurance Recoverables, Including Reinsurance Premium Paid | 496 | 404 |
Other current assets (1) | 6,776 | 4,996 |
Total prepaid expenses and other current assets | $ 13,423 | $ 12,617 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 42,468 | $ 60,005 |
Less accumulated depreciation and amortization | (16,086) | (29,430) |
Total property and equipment, net | 26,382 | 30,575 |
Depreciation and amortization associated with property and equipment, including assets under capital lease | 5,300 | 6,200 |
Furniture and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 22,032 | 36,146 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,493 | 7,512 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15,921 | 16,325 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 22 | $ 22 |
Goodwill and Intangibles, Net_2
Goodwill and Intangibles, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangibles, Net: | ||
Gross carrying amount | $ 28,167 | $ 27,930 |
Accumulated amortization | (21,844) | (19,321) |
Net carrying amount | 6,323 | 8,609 |
Goodwill and indefinite-lived intangibles | 23,176 | 23,176 |
Total goodwill and intangibles, net | 29,499 | 31,785 |
Amortization expense | 3,000 | 5,200 |
Estimated Remaining Amortization Expense as of Each Fiscal Year: | ||
2018 | 2,524 | |
2019 | 2,411 | |
2020 | 835 | |
2021 | 192 | |
2022 | 127 | |
Thereafter | 234 | |
Total future amortization expense | 6,323 | |
Capitalized curriculum costs | ||
Goodwill and Intangibles, Net: | ||
Gross carrying amount | 13,982 | 13,745 |
Accumulated amortization | (12,796) | (12,644) |
Net carrying amount | 1,186 | 1,101 |
Purchased intangible assets | ||
Goodwill and Intangibles, Net: | ||
Gross carrying amount | 14,185 | 14,185 |
Accumulated amortization | (9,048) | (6,677) |
Net carrying amount | $ 5,137 | $ 7,508 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accrued Liabilities [Abstract] | ||
Accounts payable | $ 5,967 | $ 11,246 |
Accrued salaries and wages | 5,434 | 6,149 |
Accrued bonus | 3,625 | 11,428 |
Accrued vacation | 3,037 | 3,369 |
Accrued litigation and fees | 22,376 | 8,341 |
Minimum residual liability | 14,987 | 1,216 |
Accrued expenses | 13,400 | 12,473 |
Current leases payable | 4,492 | 6,934 |
Accrued insurance liability | 1,404 | 1,537 |
Accrued income taxes payable | 47 | 0 |
Total accounts payable and accrued liabilities | $ 74,769 | $ 62,693 |
Total amount anticipated to be remitted by percentage | 50.00% |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Other Liabilities, Noncurrent [Abstract] | ||
Uncertain tax positions | $ 0 | $ 28 |
Notes payable | 2,723 | 2,981 |
Contract with Customer, Liability, Noncurrent | 807 | 0 |
Other long-term liabilities | 1,585 | 4,172 |
Total other long-term liabilities | $ 5,115 | $ 7,181 |
Credit Facilities (Details)
Credit Facilities (Details) $ in Millions | Dec. 31, 2021USD ($) |
Debt Disclosure [Abstract] | |
Letters of credit outstanding, amount | $ 9.2 |
Surety Bond Facility [Abstract] | |
Surety bond facility, issued amount | $ 0 |
Lease Obligations (Details)
Lease Obligations (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)ft²sublease | Dec. 31, 2020USD ($) | |
Operating Leased Assets [Line Items] | ||
Operating expenses | $ 9,800 | $ 13,200 |
Number of active subleases | sublease | 1 | |
Operating lease assets | $ 28,881 | 20,114 |
Operating Lease, Liability | 38,698 | |
Operating Lease, Cost | 8,239 | |
Short-term Lease, Cost | 389 | |
Variable Lease, Cost | 1,193 | |
Sublease Income | 2,264 | $ 1,900 |
Lease, Cost | $ 7,557 | |
Operating Lease, Weighted Average Remaining Lease Term | 9 years 7 months 6 days | |
Operating Lease, Weighted Average Discount Rate, Percent | 6.90% | |
Operating Lease, Payments | $ 9,281 | |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
Lessee, Operating Lease, Liability, Payments, Due Next Twelve Months | 7,009 | |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 5,316 | |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 5,022 | |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 4,759 | |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 4,763 | |
Lessee, Operating Lease, Liability, Payment, Due Year Six | 26,736 | |
Lessee, Operating Lease, Liability, Payments, Due | 53,605 | |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 14,907 | |
Operating Lease, Liability | $ 38,698 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accounts Payable and Accrued Liabilities, Current | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent | |
Fullstack Academy | ||
Operating Leased Assets [Line Items] | ||
Operating lease assets | $ 14,600 | |
Build To Suit Leases [Member] | ||
Operating Leased Assets [Line Items] | ||
Net Rentable Area | ft² | 131,000 | |
COLORADO, Commencing on April 1, 2019 [Member] | ||
Operating Leased Assets [Line Items] | ||
Area of Real Estate Property | ft² | 21,000 | |
Lessee, Operating Sublease, Term of Contract | 14 months | |
Sublease Income | $ 800 |
Income (Loss) Per Share (Basic
Income (Loss) Per Share (Basic and Diluted) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||
Net Income (Loss) Attributable to Parent | $ (42,349) | $ (48,952) |
Denominator: | ||
Weighted average number of common shares outstanding (in shares) | 33,256 | 31,959 |
Effect of dilutive options and restricted stock units (in shares) | 0 | 0 |
Diluted weighted average number of common shares outstanding (in shares) | 33,256 | 31,959 |
Earnings per share: | ||
Basic earnings (loss) per share (in USD per share) | $ (1.27) | $ (1.53) |
Diluted earnings (loss) per share (in USD per share) | $ (1.27) | $ (1.53) |
Income (Loss) Per Share (Anti-D
Income (Loss) Per Share (Anti-Dilutive Securities) (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 1,341 | 1,757 |
Stock units and contingent consideration | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 1,133 | 1,112 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 4,400,000 | $ 8,300,000 |
Income tax benefit of stock-based compensation expense | $ 1,100,000 | $ 2,100,000 |
Shares of common stock represented by each RSU | 1 | |
Granted (in shares) | shares | 0 | 0 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award expiration period | 10 years | |
Award vesting period | 4 years | |
Number of common shares reserved for issuance upon exercise of stock options and settlement of RSUs | shares | 10,100,000 | |
Exercise of stock options, shares | shares | 0 | 21,700 |
Intrinsic value of exercised options | $ 100,000 | |
Employee service share-based compensation, tax benefit from exercise of stock options | $ 0 | 0 |
Tax benefit (shortfall) related to share-based compensation activity | $ 900,000 | 700,000 |
Option expirations in period | shares | 400,000 | |
Unrecognized compensation cost | $ 0 | 4,000 |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost | $ 3,000,000 | $ 3,400,000 |
Unrecognized compensation cost, period for recognition | 1 year 4 months 24 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | shares | 1,056,000 | 911,000 |
RSUs vested in period | $ 4,000,000 | $ 1,700,000 |
Tax windfall realized from RSU | 300,000 | 44,700 |
Tax shortfall realized from RSU | 300,000 | $ 1,300,000 |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost | $ 3,000,000 | |
Unrecognized compensation cost, period for recognition | 2 years 2 months 12 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | shares | 0 | |
Share-based compensation award, tranche one | Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | shares | 1,870,000 | 0 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Option Activity) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Balance, beginning of period (in shares) | 1,625,000 | 2,008,000 | |
Granted (in shares) | 0 | 0 | |
Forfeitures and expired (in shares) | (402,000) | (361,000) | |
Balance, end of period (in shares) | 1,223,000 | 1,625,000 | 2,008,000 |
Vested and expected to vest (in shares) | 1,223,000 | ||
Exercisable (in shares) | 1,223,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Balance, beginning of period, weighted-average exercise price (in USD per share) | $ 12.68 | $ 13.42 | |
Granted, weighted-average exercise price (in USD per share) | 0 | 0 | |
Exercised, weighted-average exercise price (in USD per share) | 0 | 0.36 | |
Forfeitures, weighted-average exercise price (in USD per share) | 16.52 | 17.54 | |
Balance, end of period, weighted-average exercise price (in USD per share) | 11.42 | $ 12.68 | $ 13.42 |
Vested and expected to vest | 11.42 | ||
Exercisable | $ 11.42 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Balance, weighted-average remaining contractual term | 2 years 6 months 21 days | 3 years 7 months 17 days | 4 years 1 month 28 days |
Vested and expected to vest, weighted-average remaining contractual term | 2 years 6 months 21 days | ||
Exercisable, weighted-average remaining contractual term | 2 years 6 months 21 days | ||
Balance, aggregate intrinsic value | $ 191,000 | $ 918,000 | $ 393,000 |
Vested and expected to vest, aggregate intrinsic value | 191,000 | ||
Exercisable, aggregate intrinsic value | $ 191,000 | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Exercised (in shares) | 0 | (21,700) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of exercised options | $ 100,000 |
Stock-Based Compensation (Optio
Stock-Based Compensation (Option Valuation Assumptions) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average exercise price per share (in USD per share) | $ 0 | $ 0 |
Stock-Based Compensation (Restr
Stock-Based Compensation (Restricted Stock Unit Activity) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 0 | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Weighted average exercise price per share (in USD per share) | $ 0 | $ 0 |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Weighted average exercise price per share (in USD per share) | $ 2.35 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.20% | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 108.40% | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 2 years 6 months 25 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Forfeiture Rate | 13.00% | |
Weighted average grant date fair value per share (in USD per share) | $ 2.50 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Vested and released (in shares) | 0 | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Balance, beginning of period (in shares) | 2,295,000 | 2,305,000 |
Awarded (in shares) | 1,680,000 | 1,470,000 |
Vested and released (in shares) | (1,056,000) | (911,000) |
Canceled (in shares) | (697,000) | (570,000) |
Balance, end of period (in shares) | 2,222,000 | 2,295,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Balance, beginning of period, weighted average grant date fair value (in USD per share) | $ 1.4 | $ 5.04 |
Awarded, weighted average grant date fair value (in USD per share) | 2.63 | 2.27 |
Vested and released, weighted average grant date fair value (in USD per share) | 3.83 | 9.67 |
Canceled, weighted average grant date fair value (in USD per share) | 3.59 | 5.14 |
Balance, end of period, weighted average grant date fair value (in USD per share) | $ 2.64 | $ 1.4 |
Share-based compensation award, tranche one | Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 1,870,000 | 0 |
Performance-based measure [Member] | Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Weighted average grant date fair value per share (in USD per share) | $ 3.81 | $ 2.19 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Balance, beginning of period (in shares) | 1,017,000 | 0 |
Awarded (in shares) | 195,000 | 1,059,000 |
Canceled (in shares) | (566,000) | (43,000) |
Balance, end of period (in shares) | 645,000 | 1,017,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Balance, beginning of period, weighted average grant date fair value (in USD per share) | $ 2.19 | $ 0 |
Canceled, weighted average grant date fair value (in USD per share) | 2.18 | 2.18 |
Balance, end of period, weighted average grant date fair value (in USD per share) | 2.69 | 2.19 |
Market-based measure [Member] | Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Weighted average grant date fair value per share (in USD per share) | $ 0.90 | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Balance, beginning of period (in shares) | 733,000 | 1,070,000 |
Canceled (in shares) | (659,000) | (337,000) |
Balance, end of period (in shares) | 1,944,000 | 733,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Balance, beginning of period, weighted average grant date fair value (in USD per share) | $ 6.28 | $ 6.76 |
Canceled, weighted average grant date fair value (in USD per share) | 5.68 | 7.79 |
Balance, end of period, weighted average grant date fair value (in USD per share) | $ 1.30 | $ 6.28 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||
Effective Income Tax Rate Reconciliation, Deduction, Qualified Production Activity, Amount | $ 0 | $ 0 |
Effective Income Tax Rate Reconciliation, Deduction, Qualified Production Activity, Percent | 0.00% | 0.00% |
Computed expected federal tax expense | 21.00% | 21.00% |
Gross unrecognized tax benefits that would impact effective tax rate if recognized | $ 18 | |
Unrecognized tax benefits that would result in adjustments to other tax accounts | 4 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 10 | |
Gross increases - tax positions in prior period | $ 0 | $ 0 |
Internal Revenue Service (IRS) | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | 117,000 | |
Deferred Tax Assets, Operating Loss Carryforwards, Not Subject to Expiration | 112,000 | |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | $ 137,300 |
Income Taxes (Components of Inc
Income Taxes (Components of Income Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | ||
Federal | $ (270) | $ (13,238) |
State | 131 | 284 |
Current Foreign Tax Expense (Benefit) | 10 | 5 |
Current income tax expense (benefit) | (129) | (12,949) |
Deferred: | ||
Federal | 0 | (56) |
State | 0 | (63) |
Deferred income taxes | 0 | (119) |
Total | $ (129) | $ (13,068) |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred tax assets: | ||
Net operating loss | $ 31,841 | $ 22,662 |
Fixed assets | 365 | 0 |
Bad debt | 239 | 303 |
Vacation accrual | 618 | 673 |
Stock-based compensation | 3,222 | 3,869 |
Operating lease liabilities | 9,945 | 7,746 |
Bonus accrual | 846 | 2,476 |
Accrued expenses | 1,329 | 4,333 |
Other | 1,154 | 1,258 |
Total deferred tax assets | 49,559 | 43,320 |
Valuation allowance | (42,119) | (37,375) |
Net deferred tax assets | 7,440 | 5,945 |
Deferred tax liabilities: | ||
Fixed assets and intangibles | 0 | (704) |
Indefinite-lived intangibles | 0 | 0 |
Operating lease assets | 7,440 | 5,045 |
Other | 0 | (196) |
Deferred Tax Liabilities, Gross | (7,440) | (5,945) |
Total net deferred tax assets (liabilities) | 0 | $ 0 |
Proceeds from Income Tax Refunds | 12,800 | |
Coronavirus Aid, Relief and Economic Security Act, Net Operating Loss Carryback, Benefit | 12,800 | |
Internal Revenue Service (IRS) | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | 117,000 | |
Deferred Tax Assets, Operating Loss Carryforwards, Not Subject to Expiration | $ 112,000 |
Income Taxes (Income Tax Reconc
Income Taxes (Income Tax Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Reconciliation, Amount: | ||
Computed expected federal tax expense | $ (8,920) | $ (13,024) |
State taxes, net of federal benefit | (885) | (2,476) |
Permanent differences | 5,606 | 436 |
Uncertain tax positions | (349) | (618) |
Stock compensation | 696 | 1,388 |
Federal tax rate change on NOL carryback | 0 | (4,908) |
Effective Income Tax Rate Reconciliation, Deduction, Qualified Production Activity, Amount | 0 | 0 |
Valuation allowance | 3,981 | 5,698 |
Other | (258) | 436 |
Total | $ (129) | $ (13,068) |
Income Tax Reconciliation, Percent: | ||
Computed expected federal tax expense | 21.00% | 21.00% |
State taxes, net of federal benefit | 2.10% | 4.00% |
Permanent differences | (13.20%) | (0.70%) |
Uncertain tax positions | 0.80% | 1.00% |
Stock compensation | (1.60%) | (2.20%) |
Federal tax rate change on NOL carryback | 0.00% | 7.90% |
Effective Income Tax Rate Reconciliation, Deduction, Qualified Production Activity, Percent | 0.00% | 0.00% |
Valuation allowance | (9.40%) | (9.20%) |
Other | 0.60% | (0.70%) |
Income tax benefit | 0.30% | 21.10% |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits, beginning of period | $ 18 | $ 2,128 |
Gross increases - tax positions in prior period | 0 | 0 |
Gross decreases - tax positions in prior period | 0 | (1,661) |
Gross increases - current period tax positions | 0 | 0 |
Settlements | 0 | (400) |
Lapse of statute of limitations | (18) | (49) |
Unrecognized tax benefits, end of period | $ 0 | $ 18 |
Regulatory (Details)
Regulatory (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
The 90-10 Rule: | |||
Restructuring and impairment charges | $ 2,641 | $ 4,843 | |
Service Agreements [Member] | |||
The 90-10 Rule: | |||
Restructuring and impairment charges | $ 1,500 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | ||
Expense related to 401(k) plan | $ 1.8 | $ 2.3 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
Obligation with Joint and Several Liability Arrangement [Line Items] | |||
Legal expense | $ 14,335 | $ 0 | |
California | |||
Obligation with Joint and Several Liability Arrangement [Line Items] | |||
Estimated litigation liability | $ 8,000 |
Concentration of Risk (Details)
Concentration of Risk (Details) | Dec. 31, 2021USD ($) |
Risks and Uncertainties [Abstract] | |
Cash and cash equivalents, FDIC insurance limit | $ 250,000 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Total assets | $ 9,631 | $ 7,204 |
Revenue and other revenue | 263,033 | 397,121 |
Net Income (Loss) Attributable to Parent | (42,349) | (48,952) |
Income tax benefit | (129) | (13,068) |
Depreciation and amortization | 8,333 | 11,403 |
Deferred revenue, revenue recognized | 6,500 | 21,900 |
Assets | 149,034 | 161,306 |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | (42,478) | (62,020) |
Interest Revenue (Expense), Net | (130) | 120 |
ProfitLossFromSegmentOperations | (34,275) | (50,497) |
Deferred Revenue | 14,939 | 8,090 |
University partnerships segment | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Total assets | 78 | 45 |
Revenue and other revenue | 232,793 | 376,220 |
Assets | 86,628 | 111,830 |
ProfitLossFromSegmentOperations | (26,551) | (41,182) |
Deferred Revenue | 0 | 10 |
University partnerships segment | Consolidated Entities | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Assets | 36,200 | |
University partnerships segment | University of Arizona Global Campus [Member] | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Revenue and other revenue | 356,100 | |
Growth segment | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Total assets | 9,553 | 7,159 |
Revenue and other revenue | 30,240 | 20,901 |
Assets | 62,406 | 49,476 |
ProfitLossFromSegmentOperations | (7,724) | (9,315) |
Deferred Revenue | $ 14,939 | $ 8,080 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 12 Months Ended | 21 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2025 | Apr. 14, 2022 | Mar. 07, 2022 | Sep. 30, 2021 | |
Subsequent Event [Line Items] | ||||||
Legal expense | $ 14,335,000 | $ 0 | ||||
California | ||||||
Subsequent Event [Line Items] | ||||||
Estimated litigation liability | $ 8,000,000 | |||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Line of credit facility, fair value of amount outstanding | $ 31,500,000 | |||||
Line of Credit Facility, Interest Rate at Period End | 9.00% | |||||
Line of Credit Facility, Periodic Payment | $ 393,750 | |||||
Restricted Cash | $ 7,500,000 | |||||
Subsequent Event | California | ||||||
Subsequent Event [Line Items] | ||||||
Estimated litigation liability | $ 22,400,000 |
Uncategorized Items - zvo-20211
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |