Can anyone explain how Zovio is going to pull this rabbit out of the hat? From Zovio's latest SEC Form 10K regarding Department of Education financial responsibility scores for Ashford University:
"The composite score is a number between negative 1.0 and positive 3.0. It must be at least 1.5 for the institution to be deemed financially responsible without the need for further Department financial oversight.'"
"...We expect the consolidated composite score for the year ended December 31, 2019 to be 0.7 and below the composite score requirement as a result of non-recurring restructuring and acquisition related charges. The Department has historically calculated Ashford’s composite score based on Zovio’s consolidated audited financial statements rather than Ashford’s stand alone audited financial statements. However, the deadline to submit audited financial statements to the Department is June 30, 2020, by which date we expect that Ashford will have been separated from Zovio as a result of the Conversion Transaction currently scheduled to close on or before June 1, 2020. Following separation and closing, and given that Ashford will no longer be owned by Zovio, Ashford will submit its stand-alone audited financial statements to the Department for the purpose of calculating the institution’s composite score. We expect Ashford’s composite score, based on its standalone audited financial statements for the year ended December 31, 2019, to be at least 1.6 and above the Department’s requirement for a composite score of 1.5 or greater."