Annual report pursuant to Section 13 and 15(d)

Discontinued Operations

v3.20.1
Discontinued Operations
12 Months Ended
Dec. 31, 2019
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations

Note 4—Discontinued Operations

 

On October 28, 2019, four creditors of Legacy Education Alliance International Ltd. ("Legacy UK"), one of our UK subsidiaries, obtained an order from the High Court of Justice, Business and Property Courts of England and Wales (the "English Court") with respect to the business and affairs of Legacy UK. Pursuant to the Administration Order of November 15, 2019, from the English Court, the two individuals appointed as administrators engaged a third-party to market Legacy UK's business and assets for sale to one or more third parties. On November 26, 2019, Legacy UK's assets and deferred revenues sold for £300 thousand (British pounds) to Mayflower Alliance LTD. We will not receive any proceeds from the sale of Legacy UK. Further details, including the resolution of claims and liabilities, and other information regarding the administration may not be forthcoming for several months. We are considering our alternatives for future operations in the United Kingdom and is continuing to conduct business outside the United States through its other foreign subsidiaries in Canada, Hong Kong, Australia, and South Africa. The impact of this transaction is reflected as a discontinued operation in the consolidated financial statements.

 

The major classes of assets and liabilities of Legacy UK were as follows:

 

    As of December 31,  
(in thousands)   2019     2018  
Major classes of assets            
Cash and cash equivalents   $     $ 396  
Restricted cash           714  
Deferred course expenses           1,859  
Prepaid expenses and other current assets           145  
Inventory           34  
  Discontinued operations-current assets           3,148  
Property and equipment, net           31  
Other assets           143  
Discontinued operations-other assets           174  
Total major classes of assets - discontinued operations   $     $ 3,322  
Major classes of liabilities                
Accounts payable     3,408       2,373  
Accrued course expenses     472       391  
Accrued salaries, wages and benefits           174  
Other accrued expenses     619       698  
Deferred revenue, current portion           13,186  
Total major classes of liabilities - discontinued operations   $ 4,499     $ 16,822  

  

The financial results of the discontinued operations are as follows:

 

    Years Ended December 31,  
(in thousands)   2019     2018  
Revenue   $ 14,315     $ 17,240  
Total operating costs and expenses     15,647       17,778  
Loss from discontinued operations     (1,332 )     (538 )
Other income (expense), net     (359 )     (402 )
Gain on disposal of discontinued operations     8,300        
Net gain (loss) from discontinued operations   $ 6,609     $ (940 )

   

The following is a summary of Legacy UK cash flow activities for the periods stated (in thousands):

  

    Years Ended December 31,  
    2019     2018  
Net cash used in operating activities     (350 )     (284 )
Net cash used in investing activities     (8 )     (39 )
Net cash provided by (used in) financing activities     —         —    
Effect of exchange rate differences on cash     (752 )     (115 )
Net decrease in cash and cash equivalents and restricted cash   $ (1,110 )   $ (438 )