Subsequent Events |
9 Months Ended |
|---|---|
Jan. 31, 2022 | |
| Subsequent Events [Abstract] | 听 |
| Subsequent Events | Subsequent Events On March 14, 2022, the Company closed an offering of $10听million convertible notes and a $20听million revolving credit facility. Proceeds from the $10听million convertible note received at closing will be used for general corporate purposes, including funding the Company鈥檚 expansion of its BSN Pre-Licensure nursing degree program.
The $10听million of convertible notes mature five years from the issuance date and pay interest monthly at the rate of 12% per annum. These notes are convertible into shares of the Company鈥檚 common stock at the lender鈥檚 option at a conversion price of $1.00 per share any time after the issuance date. In addition, the notes are mandatorily convertible into shares of common stock, should the closing price of the common stock be at least $2.00 per share for 30 consecutive trading days and certain other conditions be met. This mandatory conversion is subject to each lender鈥檚 9.9% beneficial ownership limitation and is also subject to the Nasdaq combined 19.99% requirement which generally provides that a listed issuer may not issue 20% or more of its outstanding common stock or voting power in a non-public offering at below a minimum price unless the Company鈥檚 stockholders first approve such issuance.
The balance of the financing is a one-year, $20听million secured revolving line of credit that will require monthly interest payments on sums borrowed at the rate of 12% per annum. No sums have been borrowed under this revolving credit line as of this date. Currently, the Company does not anticipate making drawdowns on the revolving credit line. The Company paid a 1% commitment fee ($200,000) at closing and if the revolving credit facility has not been replaced in six months of the closing date, it must pay another 1% commitment fee.
Additionally, the Company extended its existing $5听million Credit Facility by one year to November 4, 2023 at an increased interest rate from 12% to 14% per annum.
These financings will provide capital for 果冻APP传媒 Group to continue expanding its national footprint of BSN Pre-Licensure campuses in states with rapidly growing populations and to pursue a marketing strategy to support growth of its post-licensure nursing degree programs.
果冻APP传媒 University鈥檚 first-time pass rates for our BSN pre-licensure students taking the NCLEX-RN test in Arizona fell from 80% in 2020 to 58% in 2021, which is below the minimum 80% standard set by the Arizona Board of Nursing. As a result of the decline in NCLEX pass rates and other issues, and in alignment with a recommendation from the Arizona Board of Nursing, we voluntarily suspended BSN pre-licensure enrollments and the formation of new cohorts at our two Phoenix pre-licensure campuses, effective February 2022. We鈥檙e continuing discussions with the Arizona Board of Nursing regarding our future status, and until we have a formal agreement in place we won鈥檛 be publicly commenting on the matter.
果冻APP传媒 University has also entered into a Stipulated Agreement with the Arizona State Board for Private Post-secondary Education which includes a requirement to post a letter of credit or surety bond for $18.3听million within 45 days (in the fourth quarter of fiscal year 2022).
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