Exhibit 99.2
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 20, 2016
Greenwood Hall, Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 333-184796 | 99-0376273 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 12424 Wilshire Blvd, Suite 1030, Los Angeles, California | 90025 | |
| (Address of principal executive offices) | (Zip Code) |
(310) 907-8300
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition
On July 20, 2016, Greenwood Hall, Inc. issued a press release providing an update on its Fiscal 2016 progress and Fiscal Year 2017 financial outlook. The full text of the press release is attached hereto as Exhibit 99.1.
Such guidance constitutes forward-looking statements for the purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. We wish to caution you that such statements are just predictions and actual events or results may differ materially. We refer you to the annual report on Form 10-K and the quarterly report on Form 10-Q that the Company filed with the SEC on December 15, 2015 and July 18, 2016, respectively. These documents contain and identify important factors that could cause actual results to differ materially from those contained in our projections or forward looking Statements.
The Company undertakes no obligation to update its financial outlook or guidance, other than as part of its quarterly or yearly earnings disclosure, and that silence on the financial outlook or guidance by the Company or Company officials should not be interpreted that guidance has or has not changed.
The information in this current report, including the exhibit hereto, is being “furnished” in accordance with General Instruction B.2 of Form 8-K. As such, this information is not deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filings with the Securities and Exchange Commission unless it is explicitly so incorporated in such filings.
Item 7.01 Regulation FD Disclosure.
On July 20, 2016, representatives of Greenwood Hall, Inc. (the “Company”) began making presentations to investors regarding the Company using the slides containing the information attached to this Current Report on Form 8-K as Exhibit 99.2 (the “Slides”). The Company expects to use the Slides, in whole or in part, and possibly with modifications, in connection with presentations to investors, analysts and others commencing on July 20, 2016.
By filing this Current Report on Form 8-K and furnishing the information contained herein, the Company makes no admission as to the materiality of any information in this report that is required to be disclosed solely by reason of Regulation FD.
The information contained in the Slides is summary information that is intended to be considered in the context of the Company's Securities and Exchange Commission (“SEC”) filings and other public announcements that the Company may make by press release or otherwise, from time-to-time. The Company undertakes no duty or obligation to publicly update or revise the information contained in this report, although it may do so from time to time as its management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.
In accordance with General Instruction B.2 of this Current Report on Form 8-K, the information presented in Item 7.01 of this Current Report on Form 8-K and Exhibit 99.2 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, unless the Company specifically states that the information is to be considered “filed” under the Exchange Act or incorporates it by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
See Exhibit Index immediately following the signature page.
Forward-Looking Statements
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that represent the Company's current expectations and beliefs. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws. Any statements made in this press release about Greenwood Hall's future financial condition, results of operations, expectations, plans, or prospects, including the information under the heading "Financial Outlook" constitute forward-looking statements. Forward-looking statements also include those preceded or followed by the words "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "projects," "should," "targets," “on track,” “trends or trending,” and/or similar expressions. These forward-looking statements are based on Greenwood Hall's current estimates and assumptions and, as such, involve uncertainty and risk. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from those contemplated by the forward-looking statements because of a number of factors, including the risk factors described in Greenwood Hall’s Annual Report on Form 10-K for the period ended August 31, 2015, that are incorporated herein by reference. Any forward-looking statement in this report speaks only as of the date in which it is made. Except to the extent required under the federal securities laws, Greenwood Hall does not intend to update or revise the forward-looking statements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| GREENWOOD HALL, INC. | ||
| Date: July 20, 2016 | ||
| By: | /s/ John Hall | |
| Name: John Hall | ||
| Title: Chief Executive Officer | ||
Exhibit Description
99.1 Press Release issued by Greenwood Hall, Inc. on July 20, 2016.
99.2 Investor Relations Slideshow in use beginning July 20, 2016 (furnished only).
Exhibit 99.1
Greenwood Hall Reports Third Quarter 2016 Financial Results and Financial Outlook for FY-2017
49% Increase in EdTech revenues and Adjusted
EBITDA loss improved 75% year-over-year
| · | Best Adjusted EBITDA Performance in Over 10 Quarters |
| · | 10 Contracts Signed In Q3 Bolster 90% EdTech Sales Growth Outlook for FY-2017 |
| · | Improvement in Adjusted EBIDTA Performance Expected to Continue |
SANTA MONICA, CALIF., July 20, 2016 - Greenwood Hall, Inc. (QTCQB: ELRN), a Los Angeles-based education technology company that helps colleges and universities improve student engagement and outcomes, announced its financial results for the third quarter of Fiscal Year 2016. The Company experienced a $484,437, or 49%, increase in revenue from its EdTech-related offerings during the third quarter compared to the same period in 2015. Overall revenue for the quarter ending May 31, 2016 was relatively flat at $2,155,082, compared to $2,170,894 for the same quarter in 2015, primarily due to lower revenue from the Company’s legacy, non-EdTech business, compared to the same period in 2015.
Third Quarter 2016 Highlights
| · | Addition of 18 client contracts this fiscal year to date – 10 of which were signed during the third quarter, including contracts with the University of Oklahoma, Nevada State,, University of Arizona, Troy University, and Oklahoma City Community College. |
| · | Renewal of strategic subscription agreement with University of the Southwest. |
| · | Strategic EdTech revenue of $1.47 million, compared to $0.99 million during the same period last year, representing a 49% increase year-over-year in a critical vertical. |
| · | 75% improvement in Adjusted EBITDA from the same period last year. |
“We believe our third quarter results demonstrate our ability to achieve double-digit revenue growth in our education business while improving Adjusted EBITDA. While our third quarter reflects nearly 50% revenue growth in our EdTech segment, 10 of the 18 new contracts with education partners were signed in the third quarter, which means that many of the new contracts are not expected to have an impact on revenue until our fourth quarter of FY-2016 and continuing into FY-2017, which begins September 1, 2016,” said Dr. John Hall, Chief Executive Officer of Greenwood Hall.
Financial Outlook
The Company today provided select financial guidance for FY-2017.
Guidance for FY-2017 is for the period September 1, 2016 – August 31, 2017 and compares against projected results for the twelve-month period from September 1, 2015 through August 31, 2016. Based on our existing and new service contracts for the Company’s strategic EdTech offerings, Management anticipates FY-2017 revenues related to the Company’s EdTech business to increase by up to 90-100% and could be in the range of up to $ 11.5 - 12.2 million, compared to projected EdTech revenues of approximately $ 6.0 – 6.3 million for FY-2016. Revenue pertaining to the Company’s legacy and non-strategic offerings are anticipated to be in the range of up to $ 250K – 500K, compared to projected legacy business revenues of approximately $ 1.3 – 1.4 million for FY-2016. The Company anticipates having positive Adjusted EBITDA for the full FY-2017.
Hall added, “We have seen good momentum this fiscal year in terms of both revenue growth and putting ourselves on a path to profitability as we establish ourselves as an EdTech leader in helping colleges and universities maximize student success. Our progress and results for the third quarter support our present financial outlook for up to 90-100% revenue growth in our core EdTech business in Fiscal Year 2016.”
The Company believes its financial outlook for FY-2017 is further bolstered by the recent announcement that it has resolved litigation that was related to legacy, non-education operations of Greenwood Hall’s subsidiary, PCS Link, Inc. We believe the resolution of this matter reduces the uncertainty and risk that was associated with this particular litigation and eliminates the material expenditures associated with defending against the litigation.
Reconciliation of Adjusted EBITDA to Net Income
| Three Months Ended | Nine Months Ended | |||||||||||||||
| May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | |||||||||||||
| NET LOSS | $ | (1,526,201 | ) | $ | (1,977,200 | ) | $ | (7,007,214 | ) | $ | (4,771,058 | ) | ||||
| Adjustments: | ||||||||||||||||
| Equity Expense | 222,566 | 1,031,226 | 748,992 | 1,031,326 | ||||||||||||
| Interest Expense | 550,801 | 198,477 | 3,240,317 | 510,275 | ||||||||||||
| Other Expense | - | - | - | - | ||||||||||||
| Transaction Related Expenses | 150,000 | - | 410,000 | - | ||||||||||||
| Change in Value of Derivatives | 412,115 | 57,956 | 189,380 | 194,826 | ||||||||||||
| Miscellaneous Income (expense), net | 16,482 | (10,518 | ) | 49,752 | 21,343 | |||||||||||
| Total Adjustments | 1,351,964 | 1,277,141 | 4,638,441 | 1,757,770 | ||||||||||||
| ADJUSTED EBITDA (LOSS) | $ | (174,237 | ) | $ | (700,059 | ) | $ | (2,368,773 | ) | $ | (3,013,288 | ) | ||||
About Greenwood Hall, Inc.
Greenwood Hall is an education technology company that helps colleges and universities manage the student journey. Every Greenwood Hall solution is designed to increase revenue and improve student engagement as well as learning outcomes. Since 2006, Greenwood Hall has developed customized turnkey solutions that combine strategy, people, proven processes and robust technology to help schools effectively and efficiently improve student outcomes, as well as increase revenues and expand into new marketing channels, such as online learning. Greenwood Hall has served more than 60 education clients and over 75 degree programs.
For more information, visit http://www.greenwoodhall.com, follow us on Twitter @GreenwoodHall and Facebook at http://www.facebook.com/GreenwoodandHall.
Statement Concerning Forward-Looking Information
Any statements made in this press release about Greenwood Hall's future financial condition, results of operations, expectations, plans, or prospects, including the information under the heading "Financial Outlook" constitute forward-looking statements. Forward-looking statements also include those preceded or followed by the words "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "projects," "should," "targets" and/or similar expressions. These forward-looking statements are based on Greenwood Hall's current estimates and assumptions and, as such, involve uncertainty and risk. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from those contemplated by the forward-looking statements because of a number of factors, including the risk factors described in Greenwood Hall’s Annual Report on Form 10-K for the period ended August 31, 2015, that are incorporated herein by reference. Any forward-looking statement in this release speaks only as of the date in which it is made. Except to the extent required under the federal securities laws, Greenwood Hall does not intend to update or revise the forward-looking statements.
*Non-GAAP Financial Measures
This press release includes references to Adjusted EBITDA, a non-GAAP financial measure. Adjusted EBITDA represents our earnings before interest expense, other income (expense), income taxes, depreciation and amortization, transactional-related expenses, stock-based compensation, and changes in the fair value of our derivative financial instruments. Adjusted EBITDA is a key measure used by Management and the Board of Directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operational plans. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our Management and Board of Directors. Adjusted EBITDA should not be considered as an alternative to any measure of financial performance calculated and presented in accordance with U.S. GAAP. In addition, Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate Adjusted EBITDA in the same manner as we do.
Media Contact
John Hall
Chief Executive Officer
Greenwood Hall, Inc.
jhall@greenwoodhall.com
310-907-8200
Exhibit 99.2