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 June 30, 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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Reston,
Virginia |
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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, $0.01 par value |
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7,363,804 shares |
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(Class) |
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(Outstanding at August 11, 2004) |
Explanatory Note:
This quarterly report on Form 10-Q for the quarter ended June 30, 2004 includes financial statements for the three-month and six-month periods ended June 30, 2003 reflecting a different classification of certain revenues and expenses from classifications previously presented relating to our relationship with formerly one of our largest customer. The reclassification is a result of responding to comments we received from the Division of Corporation Finance of the SEC (the “Staff”) in connection with the Staff’s review of our Registration Statement on Form S-1 (File No. 333-108380) filed in August 2003.
While this reclassification causes revenues and expenses reported herein for the three-month and six-month periods ended June 30, 2003 to be lower than previously reported, it has no impact on our current or previously reported assets, liabilities or net loss. See “Notes to Financial Statements” and “Management’s Discussion and Analysis of Operations and Results of Operations” for further information.
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
VCAMPUS CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
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Three Months Ended |
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Six Months Ended |
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2003 |
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2004 |
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2003 |
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2004 |
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Revenues: |
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Online tuition revenues |
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$ |
1,430,384 |
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$ |
1,395,653 |
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$ |
2,853,905 |
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$ |
2,805,156 |
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Development and other revenues |
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178,913 |
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52,336 |
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370,289 |
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105,950 |
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Other service revenues |
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31,597 |
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16,955 |
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61,366 |
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47,890 |
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Net revenues |
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1,640,894 |
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1,464,944 |
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3,285,560 |
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2,958,996 |
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Costs and expenses: |
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Cost of revenues |
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569,951 |
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361,810 |
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1,029,415 |
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726,613 |
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Sales and marketing |
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551,062 |
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362,430 |
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1,194,400 |
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949,332 |
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Product development and operations |
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638,930 |
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804,783 |
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1,362,880 |
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1,385,034 |
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General and administrative |
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435,538 |
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451,688 |
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900,220 |
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897,865 |
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Depreciation and amortization |
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246,470 |
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337,665 |
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495,420 |
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586,599 |
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Reorganization and other non-recurring charges |
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112,729 |
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— |
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172,729 |
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— |
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Stock-based compensation |
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13,005 |
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32,498 |
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66,814 |
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61,976 |
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Total costs and expenses |
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2,567,685 |
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2,350,874 |
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5,221,878 |
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4,607,419 |
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Loss from operations |
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(926,791 |
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(885,930 |
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(1,936,318 |
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(1,648,423 |
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Other income |
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207,138 |
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173,899 |
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207,138 |
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173,899 |
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Interest expense and amortization of debt discount and debt offering costs, net |
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(24,006 |
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(1,585,830 |
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(51,780 |
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(1,612,542 |
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Net loss |
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(743,659 |
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(2,297,861 |
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(1,780,960 |
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(3,087,066 |
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Dividends to preferred stockholders |
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(1,839,784 |
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— |
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(2,419,032 |
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— |
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Net loss attributable to common stockholders |
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$ |
(2,583,443 |
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$ |
(2,297,861 |
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(4,199,992 |
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(3,087,066 |
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Net loss per share, basic |
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$ |
(1.09 |
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$ |
(0.34 |
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$ |
(2.12 |
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$ |
(0.51 |
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Net loss per share — assuming dilution |
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$ |
(1.09 |
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$ |
(0.34 |
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$ |
(2.12 |
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$ |
(0.51 |
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See accompanying notes.
2
VCAMPUS CORPORATION
CONSOLIDATED BALANCE SHEETS
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December 31 |
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June 30 |
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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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$ |
3,304,454 |
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Accounts receivable, less allowance of $5,000 at December 31, 2003 and June 30, 2004 |
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290,530 |
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293,166 |
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Loans receivable from related party |
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83,745 |
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66,859 |
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Loans receivable—current |
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40,526 |
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41,486 |
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Prepaid expenses and other current assets |
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691,781 |
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400,045 |
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Total current assets |
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1,641,566 |
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4,106,010 |
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Property and equipment, net |
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509,662 |
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418,712 |
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Capitalized software costs and courseware development costs, net |
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1,653,295 |
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1,893,612 |
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Loans receivable—less current portion |
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33,726 |
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17,114 |
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Other assets |
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127,598 |
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516,752 |
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Other intangible assets, net |
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569,494 |
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479,998 |
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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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$ |
7,760,515 |
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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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$ |
509,700 |
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Accrued expenses |
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369,763 |
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367,364 |
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Notes payable |
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225,000 |
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— |
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Deferred revenues |
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1,010,563 |
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306,112 |
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Total current liabilities |
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2,828,313 |
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1,183,176 |
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