United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the quarterly period ended March 31, 2004. |
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OR |
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Transaction report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the transition period from to . |
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Commission File Number 0-21421
VCAMPUS CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware |
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54-1290319 |
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(State
or other jurisdiction of |
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(I.R.S. Employer Identification No.) |
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1850 Centennial Park Drive |
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20191 |
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(Address of principal executive offices) |
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(Zip Code) |
703-893-7800
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes o No ý
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
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Common Stock, $0.01 par value |
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6,442,556 shares |
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(Class) |
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(Outstanding at May 12, 2004) |
Explanatory Note:
This quarterly report on Form 10-Q for the quarter ended March 31, 2004 includes financial statements for the corresponding three-month period ended March 31, 2003 reflecting a different classification of certain revenues and expenses from classifications previously presented relating to our relationship with one of our largest customers. The reclassification is a result of responding to comments we received from the Division of Corporation Finance of the SEC (the “Staff”) in connection with the Staff’s review of our Registration Statement on Form S-1 (File No. 333-108380) filed in August 2003.
While this reclassification causes revenues and expenses reported herein for the quarter ended March 31, 2003 to be lower than previously reported, it has no impact on our current or previously reported assets, liabilities or net loss. See “Notes to Financial Statements” and “Management’s Discussion and Analysis of Operations and Results of Operations” for further information.
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
VCAMPUS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended |
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2003 |
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2004 |
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Revenues: |
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Online tuition revenues |
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$ |
1,423,521 |
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$ |
1,409,503 |
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Development and other revenues |
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191,376 |
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53,614 |
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Other service revenues |
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29,769 |
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30,935 |
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Net revenues |
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1,644,666 |
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1,494,052 |
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Costs and expenses: |
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Cost of revenues |
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459,464 |
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364,803 |
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Sales and marketing |
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643,338 |
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586,902 |
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Product development and operations |
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723,950 |
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580,251 |
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General and administrative |
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464,682 |
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446,177 |
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Depreciation and amortization |
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248,950 |
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248,934 |
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Reorganization and other non-recurring charges |
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60,000 |
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— |
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Stock-based compensation |
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53,809 |
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29,478 |
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Total costs and expenses |
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2,654,193 |
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2,256,545 |
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Loss from operations |
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(1,009,527 |
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(762,493 |
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Interest expense |
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(27,774 |
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(26,712 |
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Net loss |
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(1,037,301 |
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(789,205 |
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Dividends to preferred stockholders |
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(579,248 |
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— |
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Net loss attributable to common stockholders |
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$ |
(1,616,549 |
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$ |
(789,205 |
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Net loss per share, basic |
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$ |
(1.03 |
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$ |
(0.15 |
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Net loss per share — assuming dilution |
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$ |
(1.03 |
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$ |
(0.15 |
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See accompanying notes.
2
VCAMPUS
CORPORATION
CONSOLIDATED
BALANCE SHEETS
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December 31 |
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March 31 |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
534,984 |
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$ |
4,982,610 |
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Accounts receivable, less allowance of $5,000 at December 31, 2003 and March 31, 2004 |
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290,530 |
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286,873 |
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Loans receivable from related party |
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83,745 |
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75,338 |
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Loans receivable—current |
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40,526 |
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41,002 |
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Prepaid expenses and other current assets |
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691,781 |
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1,226,289 |
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Total current assets |
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1,641,566 |
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6,612,112 |
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Property and equipment, net |
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509,662 |
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451,268 |
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Capitalized software costs and courseware development costs, net |
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1,653,295 |
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1,976,433 |
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Loans receivable—less current portion |
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33,726 |
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25,482 |
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Other assets |
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127,598 |
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127,614 |
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Other intangible assets, net |
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569,494 |
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524,746 |
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Goodwill |
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328,317 |
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328,317 |
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Total assets |
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$ |
4,863,658 |
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$ |
10,045,972 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
1,222,987 |
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$ |
1,627,226 |
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Accrued expenses |
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369,763 |
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926,785 |
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Notes payable |
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225,000 |
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2,192,675 |
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Deferred revenues |
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1,010,563 |
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683,237 |
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Total current liabilities |
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2,828,313 |
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5,429,923 |
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Commitments and contingencies: |
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— |
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— |
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Stockholders’ equity: |
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Common Stock, $0.01 par value per share; 36,000,000 shares authorized; 5,167,000 and 6,206,612 shares issued and outstanding at December 31, 2003 and March 31, 2004, respectively |
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51,670 |
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62,066 |
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Additional paid-in capital |
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92,376,579 |
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95,736,092 |
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Accumulated deficit |
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(90,392,904 |
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(91,182,109 |
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Total stockholders’ equity |
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2,035,345 |
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4,616,049 |
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Total liabilities and stockholders’ equity |
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$ |
4,863,658 |
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$ |
10,045,972 |
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See accompanying notes.
3
VCAMPUS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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Three Months Ended |
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2003 |
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2004 |
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Operating activities |
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Net loss |
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$ |
(1,037,301 |
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$ |
(789,205 |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation |
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73,579 |
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67,770 |
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Amortization |
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175,371 |
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181,164 |
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Debt discount amortization |
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21,210 |
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5,588 |
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Compensatory stock options and warrants |
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53,809 |
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29,478 |
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Decrease in allowance for doubtful accounts |
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(334 |
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— |
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Changes in operating assets and liabilities: |
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(Increase) decrease in accounts receivable |
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(198,204 |
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3,657 |
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Decrease in prepaid expenses and other current assets |
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91,625 |
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236,677 |
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Increase in other assets |
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(91 |
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(16 |
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Increase in accounts payable and accrued expenses |
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