Exhibit 99.1

[aspu_ex99z1001.jpg]


FOR IMMEDIATE RELEASE:  July 12, 2018



Aspen Group Revenue Growth Rate Accelerates in Q4 to 68%



Reports Record Revenue of $22 Million in Fiscal 2018



NEW YORK, NY – July 12, 2018 - Aspen Group, Inc. (Nasdaq: ASPU), a post-secondary education company, today announced financial results for its 2018 fiscal fourth quarter ended April 30, 2018, highlighted by revenue of $7,225,029, an increase of 68% year-over-year.  Aspen Group also announced its full year results which are included in the consolidated financial statements at the end of this press release.


Aspen University students paying tuition and fees through a monthly payment method grew by 48% year-over-year, from 3,060 to 4,532. Those 4,532 students represent 70% of Aspen University’s total active student body of 6,500. United States University (“USU”) students paying tuition and fees through a monthly payment method grew from 204 to 293 students sequentially. Those 293 students represent 53% of USU’s total active student body of 557.


Michael Mathews, Chairman & CEO of Aspen Group, commented, “The company is focused on accelerating growth this upcoming fiscal year 2019 by growing both our core Aspen online nursing business and growing key new business initiatives such as USU’s Family Nurse Practitioner (“FNP”) program and our initial pre-licensure BSN hybrid online/on-campus program in Phoenix. However, we’d like to highlight the leverage in our historical business model by pointing to the fact that the Aspen University business has reached enough scale with 6,500 active students to deliver approximately $0.9 million of operating income for the fourth quarter.


Fiscal Q4 2018 Financial Highlights:*

·

Revenue totaled $7,225,029, an increase of 68% as compared to the prior fiscal year fourth quarter;

·

Gross Profit totaled $3,506,254, a 35% increase as compared to the prior fiscal year fourth quarter;

·

Net Loss applicable to shareholders of ($3,664,485), as compared to Net Loss of ($723,729) in the prior fiscal year fourth quarter; Diluted net loss per share was $(0.26), as compared to $(0.06) in the prior fiscal year; Adjusted diluted net loss per share was $(0.15) excluding the one-time interest expense related to the early extinguishment of the $10 million credit facility;

·

EBITDA, a non-GAAP financial measure, totaled $(1,599,471);

·

Adjusted EBITDA, a non-GAAP financial measure, totaled $(1,020,004);


In reviewing these comparisons, investors should note Aspen Group acquired USU on December 1, 2017. For the fourth quarter, revenues were $7,225,029, an increase of 68% as compared to the prior fiscal year fourth quarter. Aspen University’s increase in revenues was primarily a result of new class starts rising by 42% year-over-year. USU revenues contributed nearly 15% of the quarterly revenues for the Company, rising at a faster pace than the previously projected ~10% for the quarter.


Gross profit increased to $3,506,254 or 49% gross margin. Aspen University gross profit represented 57% of Aspen University revenues for the fourth quarter, while USU gross profit equaled 27% of USU revenues during the fourth quarter. Aspen University instructional costs and services represented 18% of Aspen University revenues for the 2018 quarter, while USU instructional costs and services equaled 38% of USU revenues during the 2018 quarter. Aspen University marketing and promotional costs represented 23% of Aspen University revenues for the 2018 quarter, while USU marketing and promotional costs equaled 35% of USU revenues during the 2018 quarter.


Net loss applicable to shareholders was ($3,664,485) or diluted net loss per share of $(0.26). Aspen University generated $0.9 million of operating income for the fourth quarter, while USU experienced an operating income loss of $(1.29) million during the fourth quarter. Aspen Group corporate contributed $3.28 million of operating expenses for the fourth quarter which included the one-time $1.5 million interest expense related to the extinguishment of the $10 million credit facility. Excluding the one-time $1.5 million interest expense, the adjusted diluted net loss per share, a non-GAAP financial measure, was $(0.15).





 


EBITDA, a non-GAAP financial measure, was $(1,599,471) or (22%). Adjusted EBITDA, a non-GAAP financial measure, was $(1,020,004) or (14%). Aspen University generated $1.37 million of Adjusted EBITDA for the fourth quarter, while USU experienced an Adjusted EBITDA loss of $(0.98) million during the fourth quarter. Aspen Group corporate contributed $1.41 million of operating expenses to the $(1,020,004) Adjusted EBITDA loss for the fourth quarter.


Fiscal 2018 Fourth Quarter Operational Highlights:


AGI New Student Enrollments


AGI delivered a company record of 1,273 total new student enrollments for the fiscal 2018 fourth quarter. Aspen University accounted for 1,096 new student enrollments (includes 116 Doctoral enrollments), while USU accounted for 177 new student enrollments (primarily FNP enrollments).


 

 

 

HISTORICAL ENROLLMENTS:

 

 

NEW ENROLLMENT METHODOLOGY:*

 

 

 

 

(Unconditional + Conditional Accepts)

 

 

(Unconditional Accepts only)

 

 

 

 

Q4’17

 

 

Q1’18

 

 

Q2’18

 

 

Q3’18

 

 

Q4’18

 

 

Q4’17**

 

 

Q1’18

 

 

Q2’18

 

 

Q3’18

 

 

Q4’18**

 

 

Aspen (Nursing + Other)

 

 

986

 

 

 

1,025

 

 

 

1,255

 

 

 

1,164

 

 

 

N/A

 

 

 

834

 

 

 

862

 

 

 

1,044

 

 

 

972

 

 

 

980

 

 

Aspen (Doctoral)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

116

 

 

USU (FNP + Other)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

177

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

834

 

 

 

862

 

 

 

1,044

 

 

 

972

 

 

 

1,273

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*

Note that starting in March, 2018, Aspen University no longer admits students without official transcripts (formerly called conditional acceptances).  This change was made for operational efficiency reasons, as the starts and revenues earned from conditional acceptance enrollments did not warrant the conditional acceptance policy to be continued. Below is a table reflecting historical enrollments (includes unconditional and conditional acceptance enrollments) against the new methodology of unconditional acceptance enrollments only.

 

 

**

From a year-over-year perspective, Aspen University had 834 enrollments (removing conditionals from fiscal Q4’17), therefore the 1,096 enrollments in fiscal Q4’18 represents a y/o/y increase of 31%.

 


Marketing Efficiency Ratio (MER) Analysis


AGI has developed a marketing efficiency ratio to continually monitor the performance of its business model.


Revenue per Enrollment (RPE)

Marketing Efficiency Ratio (MER) =

—————————————

Cost per Enrollment (CPE)


Cost per Enrollment (CPE)

The Cost per Enrollment measures the advertising investment spent in a given six month period, divided by the number of new student enrollments achieved in that given six month period, in order to obtain an average CPE for the period measured.


Revenue per Enrollment (RPE)

The Revenue per Enrollment takes each quarterly cohort of new degree-seeking student enrollments, and measures the amount of earned revenue including tuition and fees to determine the average RPE for the cohort measured. For the later periods of a cohort, we have used reasonable projections based off of historical results to determine the amount of revenue we will earn in later periods of the cohort.


The current CPE/RPE Marketing Efficiency Ratio for our three current degree segments is reflected in the below table.


 

 

 

Enrollments***

 

 

Cost-of-Enrollment

 

 

LTV

 

 

MER

 

 

Aspen (Nursing + Other)

 

 

980

 

 

$

1,124

*

 

$

7,350

 

 

 

6.5X

 

 

Aspen (Doctoral)

 

 

116

 

 

$

2,159

**

 

$

12,600

 

 

 

5.8X

 

 

USU (FNP + Other)****

 

 

177

 

 

$

1,955

**

 

$

17,820

 

 

 

9.1X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*

Based on a six-month rolling average

 

 

**

Based on only one full quarter of marketing spend, therefore six-month rolling average will be available next quarter

 

 

***

Note that starting in March, 2018, Aspen University no longer admits students without official transcripts (formerly called conditional acceptances).  Enrollments reported in the above table includes unconditional acceptance enrollments only.

 

 

****

Note that USU to date has capped the number of FNP enrollments to 75 every other month based on guidance from the California Board of Registered Nursing (CA BRN), therefore the cost-of-enrollment is artificially high relative to the potential enrollment demand. USU’s FNP program is undergoing the standard program review with the CA BRN in July, 2018 and should that limit be increased, the cost-of-enrollment is expected to decline thereafter.

 




 


Please be advised that the two new reporting units, Aspen (Doctoral) and USU (FNP + Other), began marketing on the internet in recent months, consequently the new reporting units will have received an immaterial amount of organic/referral enrollments, so the cost-of-enrollment today is essentially a reflection of the average cost of delivering a ‘paid’ enrollment.  Aspen’s traditional business unit (Nursing + Other) today delivers over 20% of its enrollments from organic/referral sources, which is what drives down the average cost-of-enrollment in this traditional unit. Organic/referral enrollments of course will increase over time in these two new reporting units.


Aspen University’s Pre-Licensure BSN Hybrid (online/on-campus) Degree Program Update


Aspen University has just begun its first semester (July 10, 2018) for its previously announced pre-licensure Bachelor of Science in Nursing (BSN) degree program at its initial campus in Phoenix, AZ.


Aspen’s pre-licensure BSN program is offered as a full-time, three-year (nine semester) program that is specifically designed for students who do not currently hold a state nursing license and have no prior nursing experience. Aspen is admitting students into three tracks; (1) high school graduates with no prior college credits, (2) students that have less than 48 general education prerequisites completed, and (3) students that have completed all 48 general education prerequisite credits and are ready to enter the core nursing courses and clinical experiences. Aspen is currently limited to a maximum of 30 students entering the two-year core nursing program each semester based on guidance provided by the Arizona State Board of Nursing.  This 30 student limitation per semester will remain in place until the first cohort of 30 students complete the NCLEX exam in mid-2020.


The semester that started on July 10, 2018 had 93 students enrolled, of which 29 entered with all pre-requisites completed, thereby entering the final two-year core nursing program. The remaining 64 students are enrolled in general education pre-requisite courses which must be completed before being admitted into the two-year core nursing program.


Additionally, 28 of the 64 general education students that started in July are anticipated to be ready to enter the two-year core nursing program for our upcoming semester starting on November 13, therefore we anticipate having a waitlist for our final two-year core nursing program for the remainder of the academic year (November and March semesters).  Because of the overwhelming demand for our nursing program in Phoenix, the Company is now assessing alternative approaches that would allow Aspen University to open a second campus in Phoenix in calendar year 2019.


Conference Call:


Aspen Group, Inc. will host a conference call to discuss its fiscal year 2018 fourth quarter (ending April 30, 2018) financial results and business outlook on Thursday, July 12, 2018, at 4:30 p.m. (ET).   The conference call can be accessed by dialing toll-free (844) 452-6823 (U.S.) or (731) 256-5216 (international), passcode 3395974. Subsequent to the call, a transcript of the audiocast will be available from the Company’s website at ir.aspen.edu. There will also be a 7 day dial-in replay which can be accessed by dialing toll-free (855) 859-2056 or (404) 537-3406 (international), passcode 3395974.


Non-GAAP – Financial Measures:


This press release includes both financial measures in accordance with Generally Accepted Accounting Principles, or GAAP, as well as non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should be viewed as supplemental to, and should not be considered as alternatives to net income, operating income, and cash flow from operating activities, liquidity or any other financial measures. They may not be indicative of the historical operating results of Aspen Group nor are they intended to be predictive of potential future results. Investors should not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP.


Our management uses and relies on Adjusted EBITDA and EBITDA, each of which are non-GAAP financial measures. We believe that both management and shareholders benefit from referring to the following non-GAAP financial measures in planning, forecasting and analyzing future periods. Our management uses these non-GAAP financial measures in evaluating its financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management recognizes that the non-GAAP financial measures have inherent limitations because of the excluded items described below.


Aspen Group defines Adjusted EBITDA as earnings (or loss) from continuing operations before the items in the table below. Aspen Group excludes these expenses because they are non-cash or non-recurring in nature.





 


We have included a reconciliation of our non-GAAP financial measures to the most comparable financial measures calculated in accordance with GAAP. We believe that providing the non-GAAP financial measures, together with the reconciliation to GAAP, helps investors make comparisons between Aspen Group and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measure and the corresponding GAAP measure provided by each company under applicable SEC rules.


The following table presents a reconciliation of Adjusted EBITDA to net loss allocable to common shareholders, a GAAP financial measure:


 

 

 

 

 

For the Years Ended

April 30,

 

 

 

 

 

 

2018

 

 

2017

 

Net loss

 

 

 

 

 

$

(7,061,060

)

 

$

(1,105,260

)

Interest expense

 

 

 

 

 

 

1,860,391

 

 

 

337,510

 

Depreciation & amortization

 

 

 

 

 

 

1,092,282

 

 

 

556,730

 

EBITDA (loss)

 

 

 

 

 

 

(4,008,387

)

 

 

(211,020

)

Program review settlement  

 

 

 

 

 

 

 

 

 

323,090

 

Bad debt expense

 

 

 

 

 

 

535,366

 

 

 

44,320

 

Acquisition expenses

 

 

 

 

 

 

828,566

 

 

 

211,122

 

Warrant buy back expense

 

 

 

 

 

 

 

 

 

206,000

 

Non-recurring charges

 

 

 

 

 

 

764,253

 

 

 

732,971

 

Stock-based compensation

 

 

 

 

 

 

642,566

 

 

 

338,294

 

Adjusted EBITDA (Loss)

 

 

 

 

 

$

(1,337,636

)

 

$

1,644,777

 


 

 

 

 

 

For the Quarters Ended

April 30,

 

 

 

 

 

 

2018

 

 

2017

 

Net loss

 

 

 

 

 

$

(3,664,486

)

 

$

(723,730

)

Interest expense

 

 

 

 

 

 

1,504,701

 

 

 

161,848

 

Depreciation & amortization

 

 

 

 

 

 

460,314

 

 

 

133,948

 

EBITDA (Loss)

 

 

 

 

 

 

(1,599,471

)

 

 

(427,934

)

Program review settlement

 

 

 

 

 

 

 

 

 

298,090

 

Bad debt expense

 

 

 

 

 

 

317,222

 

 

 

70,000

 

Acquisition expenses

 

 

 

 

 

 

 

 

 

211,122

 

Non-recurring charges

 

 

 

 

 

 

186,147

 

 

 

230,537

 

Stock-based compensation

 

 

 

 

 

 

176,098

 

 

 

84,461

 

Adjusted EBITDA

 

 

 

 

 

$

(1,020,004

)

 

$

466,276

 


About Aspen Group, Inc.:


Aspen Group, Inc. is a publicly held, for-profit post-secondary education company headquartered in New York, NY.  It owns two accredited universities, Aspen University and United States University. Aspen Group’s vision is to make college affordable again in America.


Forward-Looking Statements:


This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including accelerating growth, expected decline in cost of enrollments, the projected revenue per enrollment, the increase in organic referrals and anticipated waitlist for the November semester. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Important factors that could cause actual results to differ from those in the forward-looking statements are included in our filings with the SEC including our Form S-3 filed April 11, 2018, our Prospectus Supplement filed April 19, 2018 and our Form 10-K for the year ended April 30, 2018 which we expect to file July 13, 2018. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.


Company Contact:


Aspen Group, Inc.

Michael Mathews, CEO

914-906-9159




 


ASPEN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


 

 

April 30,

 

 

 

2018

 

 

2017

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$

14,612,559

 

 

$

2,756,217

 

Restricted cash

 

 

190,506

 

 

 

 

Accounts receivable, net of allowance of $468,174 and $328,864, respectively

 

 

6,802,723

 

 

 

4,434,862

 

Prepaid expenses

 

 

199,406

 

 

 

133,531

 

Promissory note receivable

 

 

 

 

 

900,000

 

Other receivables

 

 

184,569

 

 

 

81,464

 

Accrued interest receivable

 

 

 

 

 

8,000

 

Total current assets

 

 

21,989,763

 

 

 

8,314,074

 

 

 

 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

 

 

 

Call center equipment

 

 

140,509

 

 

 

53,748

 

Computer and office equipment

 

 

230,810

 

 

 

103,649

 

Furniture and fixtures

 

 

932,454

 

 

 

255,984

 

Software

 

 

2,878,753

 

 

 

2,131,344

 

 

 

 

4,182,526

 

 

 

2,544,725

 

Less accumulated depreciation and amortization

 

 

(1,320,360

)

 

 

(1,090,010

)

Total property and equipment, net

 

 

2,862,166

 

 

 

1,454,715

 

Goodwill

 

 

5,011,432

 

 

 

 

Intangible assets, net

 

 

9,641,667

 

 

 

 

Courseware, net

 

 

138,159

 

 

 

145,477

 

Accounts receivable, secured - net of allowance of $625,963, and $625,963, respectively

 

 

45,329

 

 

 

45,329

 

Long term contractual receivable

 

 

1,315,050

 

 

 

657,542

 

Other assets

 

 

584,966

 

 

 

56,417

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

41,588,532

 

 

$

10,673,554

 


 

 

April 30,

 

 

 

2018

 

 

2017

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,227,214

 

 

$

756,701

 

Accrued expenses

 

 

658,854

 

 

 

262,911

 

Deferred revenue

 

 

1,814,136

 

 

 

1,354,989

 

Refunds due students

 

 

815,841

 

 

 

310,576

 

Deferred rent, current portion

 

 

8,160

 

 

 

11,200

 

Convertible notes payable, current portion

 

 

1,050,000

 

 

 

50,000

 

Other current liabilities

 

 

203,371

 

 

 

 

Total current liabilities

 

 

6,777,576

 

 

 

2,746,377

 

 

 

 

 

 

 

 

 

 

Convertible note payable

 

 

1,000,000

 

 

 

 

Warrant Liability

 

 

 

 

 

52,500

 

Deferred rent

 

 

77,365

 

 

 

34,437

 

Total liabilities

 

 

7,854,941

 

 

 

2,833,314

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies - See Note 11

 

 

— 

 

 

 

— 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity :

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 10,000,000 shares authorized,
0 issued and outstanding at April 30, 2018 and 2017

 

 

 

 

 

 

Common stock, $0.001 par value; 250,000,000 shares authorized,

 

 

 

 

 

 

 

 

18,333,521 issued and 18,316,854 outstanding at April 30, 2018

 

 

 

 

 

 

 

 

13,504,012 issued and 13,487,345 outstanding at April 30, 2017

 

 

18,334

 

 

 

13,504

 

Additional paid-in capital

 

 

66,557,005

 

 

 

33,607,423

 

Treasury stock (16,667 shares)

 

 

(70,000

)

 

 

(70,000

)

Accumulated deficit

 

 

(32,771,748

)

 

 

(25,710,687

)

Total stockholders’ equity

 

 

33,733,591

 

 

 

7,840,240

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

41,588,532

 

 

$

10,673,554

 





 


ASPEN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS


 

 

For the Year Ended

 

 

 

April 30,

 

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

Revenues

 

$

22,021,512

 

 

$

14,246,696

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

Cost of revenues (exclusive of depreciation and amortization shown separately below)

 

 

9,853,819

 

 

 

5,061,222

 

General and administrative

 

 

16,328,580

 

 

 

9,087,740

 

Program review settlement expense

 

 

 

 

 

323,090

 

Depreciation and amortization

 

 

1,092,283

 

 

 

556,730

 

Total operating expenses

 

 

27,274,682

 

 

 

15,028,782

 

 

 

 

 

 

 

 

 

 

Operating loss from operations

 

 

(5,253,170

)

 

 

(782,086

)

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Other income

 

 

149,761

 

 

 

14,336

 

Gain on extinguishment of warrant liability

 

 

52,500

 

 

 

 

Interest expense

 

 

(2,010,152

)

 

 

(337,510

)

Total other expense, net

 

 

(1,807,891

)

 

 

(323,174

)

 

 

 

 

 

 

 

 

 

Loss from operations before income taxes

 

 

(7,061,061

)

 

 

(1,105,260

)

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(7,061,061

)

 

$

(1,105,260

)

 

 

 

 

 

 

 

 

 

Net loss per share allocable to common stockholders - basic

 

$

(0.50

)

 

$

(0.10

)

 

 

 

 

 

 

 

 

 

Net loss per share allocable to common stockholders - diluted

 

$

(0.50

)

 

$

(0.10

)

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding: basic

 

 

14,215,868

 

 

 

11,558,112

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding: diluted

 

 

14,215,868

 

 

 

11,558,112

 





 


ASPEN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEAR ENDED APRIL 30, 2018


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

Stockholders'

 

 

 

Common Stock

 

 

Paid-In

 

 

Treasury

 

 

Accumulated

 

 

Equity

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Stock

 

 

Deficit

 

 

 

 

Balance at April 30, 2016

 

 

11,246,512

 

 

$

11,247

 

 

$

26,477,162

 

 

$

(70,000

)

 

$

(24,605,427

)

 

$

1,812,982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attorney fees associated with Registration Statement

 

 

 

 

 

 

 

 

(4,017

)

 

 

 

 

 

 

 

 

(4,017

)

Shares issued for cash

 

 

2,000,000

 

 

 

2,000

 

 

 

7,498,000

 

 

 

 

 

 

 

 

 

7,500,000

 

Fees associated with equity raise

 

 

 

 

 

 

 

 

(560,261

)

 

 

 

 

 

 

 

 

(560,261

)

Stock-based compensation

 

 

 

 

 

 

 

 

338,294

 

 

 

 

 

 

 

 

 

338,294

 

Warrant buyback

 

 

208,333

 

 

 

208

 

 

 

(194,208

)

 

 

 

 

 

 

 

 

(194,000

)

Shares issued for services rendered

 

 

49,167

 

 

 

49

 

 

 

52,453

 

 

 

 

 

 

 

 

 

52,502

 

Net loss, for the year ended April 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,105,260

)

 

 

(1,105,260

)

Balance at April 30, 2017

 

 

13,504,012

 

 

$

13,504

 

 

$

33,607,423

 

 

$

(70,000

)

 

$

(25,710,687

)

 

$

7,840,240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock issued for services

 

 

10,000

 

 

 

10

 

 

 

88,689

 

 

 

 

 

 

 

 

 

88,699

 

Stock-based compensation

 

 

 

 

 

 

 

 

642,566

 

 

 

 

 

 

 

 

 

642,566

 

Common stock issued for acquisition

 

 

1,203,209

 

 

 

1,203

 

 

 

10,214,041

 

 

 

 

 

 

 

 

 

10,215,244

 

Common stock issued for cashless warrant exercise

 

 

171,962

 

 

 

172

 

 

 

(172

)

 

 

 

 

 

 

 

 

 

Common stock issued for warrants exercised for cash

 

 

87,775

 

 

 

88

 

 

 

246,292

 

 

 

 

 

 

 

 

 

246,380

 

Common stock issued for stock options exercised for cash

 

 

136,563

 

 

 

137

 

 

 

475,688

 

 

 

 

 

 

 

 

 

475,825

 

Common stock issued in equity raise

 

 

3,220,000

 

 

 

3,220

 

 

 

23,019,780

 

 

 

 

 

 

 

 

 

23,023,000

 

Warrants issued with senior secured term loan

 

 

 

 

 

 

 

 

478,428

 

 

 

 

 

 

 

 

 

478,428

 

Fees associated with equity raise

 

 

 

 

 

 

 

 

(2,215,730

)

 

 

 

 

 

 

 

 

(2,215,730

)

Net loss, for the year ended April 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,061,061

)

 

 

(7,061,061

)

Balance at April 30, 2018

 

 

18,333,521

 

 

$

18,334

 

 

$

66,557,005

 

 

$

(70,000

)

 

$

(32,771,748

)

 

$

33,733,591

 








 


ASPEN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


 

 

For the Years ended

 

 

 

April 30,

 

 

 

2018

 

 

2017

 

Cash flows from operating activities:

  

                      

   

  

                      

   

Net loss

 

$

(7,061,061

)

 

$

(1,105,260

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Bad debt expense

 

 

535,366

 

 

 

44,320

 

Gain on extinguishment of warrant liability

 

 

(52,500

)

 

 

 

Depreciation and amortization

 

 

1,092,283

 

 

 

556,730

 

Stock-based compensation

 

 

642,566

 

 

 

338,294

 

Loss on asset disposition

 

 

27,590

 

 

 

 

Amortization and write-off origination fees

 

 

829,794

 

 

 

112,500

 

Amortization of prepaid shares for services

 

 

80,415

 

 

 

52,500

 

Warrant buyback expense

 

 

 

 

 

206,000

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(3,360,277

)

 

 

(2,974,073

)

Prepaid expenses

 

 

(13,593

)

 

 

(10,474

)

Accrued interest receivable

 

 

(45,400

)

 

 

(8,000

)

Other receivables

 

 

(103,105

)

 

 

(64,263

)

Other assets

 

 

(528,549

)

 

 

(25,242

)

Accounts payable

 

 

1,319,268

 

 

 

747,500

 

Accrued expenses

 

 

280,697

 

 

 

85,937

 

Deferred rent

 

 

22,079

 

 

 

14,123

 

Refunds due students

 

 

505,265

 

 

 

199,693

 

Deferred revenue

 

 

(1,953)

 

 

 

341,555

 

Other liabilities

 

 

221,180

 

 

 

 

Net cash used in operating activities

 

 

(5,609,935

)

 

 

(1,488,160

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Increase in restricted cash

 

 

(190,506

)

 

 

 

Purchases of courseware

 

 

(48,388

)

 

 

(8,800

)

Purchases of property and equipment

 

 

(1,836,618

)

 

 

(804,558

)

Notes receivable

 

 

900,000

 

 

 

(900,000

)

Cash paid in acquisition

 

 

(2,589,719

)

 

 

 

Proceeds from promissory note interest receivable

 

 

53,400

 

 

 

 

Net cash used in investing activities

 

 

(3,711,831

)

 

 

(1,713,358

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from Equity offering

 

 

23,023,000

 

 

 

7,500,000

 

Disbursements for equity offering costs

 

 

(2,215,730

)

 

 

(560,261

)

Repayment of convertible note payable - related party

 

 

 

 

 

(300,000

)

Repayment of loan payable - officer - related party

 

 

 

 

 

(1,000,000

)

Warrant Buyback

 

 

 

 

 

(400,000

)

Borrowing of bank line of credit

 

 

 

 

 

247,000

 

Payments for bank line of credit

 

 

 

 

 

(248,783

)

Borrowing of third party line of credit

 

 

 

 

 

2,150,000

 

Payments of third party line of credit

 

 

 

 

 

(2,150,000

)

Third party line of credit financing costs

 

 

 

 

 

(60,000

)

Disbursements for registration statement

 

 

 

 

 

(4,017

)

Proceeds of warrant and stock option exercises

 

 

722,204

 

 

 

 

Offering costs paid on debt financing

 

 

(351,366

)

 

 

 

Payment of senior secured term loan

 

 

(7,500,000

)

 

 

 

Proceeds from senior secured loan

 

 

7,500,000

 

 

 

 

Net cash provided by financing activities

 

 

21,178,108

 

 

 

5,173,939

 


(Continued)




 


ASPEN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)


 

 

For the Years ended

 

 

 

April 30,

 

 

 

2018

 

 

2017

 

Net increase in cash

 

 

11,856,342

 

 

 

1,972,421

 

 

 

 

 

 

 

 

 

 

Cash at beginning of year

 

 

2,756,217

 

 

 

783,796

 

 

 

 

 

 

 

 

 

 

Cash at end of year

 

$

14,612,559

 

 

$

2,756,217

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

540,341

 

 

$

297,151

 

Cash paid for income taxes

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

 

 

 

 

Warrants issued as part of senior secured loan

 

$

478,428

 

 

$

 

Assets acquired net of liabilities assumed for non-cash consideration

 

$

12,215,244

 

 

$

 

Common stock issued for services

 

$

88,700

 

 

$

52,502

 

Warrant derivative liability

 

$

 

 

$

52,500