EXHIBIT 99.1

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FOR IMMEDIATE RELEASE:  March 16, 2021



Aspen Group Reports 33% Revenue Growth for the Third Quarter of Fiscal Year 2021


BSN Pre-licensure and USU (primarily MSN-FNP) units deliver 51% of consolidated revenue


BSN Pre-licensure program has launched in three new metros in the past five months


NEW YORK, NY – March 16, 2021 - Aspen Group, Inc. ("Aspen Group" or "AGI") (Nasdaq: ASPU), an education technology holding company, today announced financial results for its 2021 fiscal third quarter ended January 31, 2021.


Third Quarter and Year to Date Fiscal Year 2021 Summary Results


 

Three Months Ended

Nine Months Ended

$ in millions, except per share data

(rounding differences may occur)

January 31,
2021

January 31,
2020

January 31,
2021

January 31,
2020

Revenue

$16.6

$12.5

$48.8

$35.0

GAAP Gross Profit1

$8.7

$7.1

$27.0

$20.5

GAAP Gross Margin (%)1

52%

57%

55%

59%

Operating Income (Loss)

($2.8)

($1.7)

($5.9)

($3.7)

Net Income (Loss)

($2.8)

($2.3)

($8.1)

($5.0)

Earnings (Loss) per Share

($0.11)

($0.12)

($0.35)

($0.26)

Adjusted Net Income (Loss)2

($2.1)

($0.9)

($3.2)

($2.5)

Adjusted Earnings (Loss) per Share2

($0.09)

($0.05)

($0.14)

  ($0.13)

EBITDA2

($2.2)

($1.1)

($4.5)

$(1.6)

Adjusted EBITDA2

($0.9)

$0.2

$0.6

$1.5

1 GAAP gross profit calculation includes marketing and promotional costs, instructional costs & services, and amortization expense.

2 See reconciliations of GAAP to Non-GAAP financial measures under "Non-GAAPFinancial Measures" below.


“We delivered strong revenue growth of 33% in the third quarter despite moderate headwinds from COVID-19 combined with traditionally lower seasonality,” said Michael Mathews, Chairman and CEO of AGI. “Our Pre-licensure BSN and USU (primarily MSN-FNP) units are our highest growth and highest LTV businesses and now make up 51% of our consolidated revenue. We launched our BSN Pre-Licensure program in three new metros over the past five months. The start-up costs we face with each new campus including real estate leases, added instructional costs, and new marketing costs impacted our short-term profitability. However, the strong performance of the Phoenix metro BSN Pre-Licensure program, which delivered net income and EBITDA of $1.8 million for a 52% EBITDA margin, helped to offset the new campus start-up operating expenses, and demonstrates the future leverage from this unit.”




1



 


Third Quarter Fiscal Year 2021 Financial and Operational Results vs. Third Quarter Fiscal Year 2020:


Third Quarter Bookings1 and Average Revenue Per Enrollment (ARPU)2


 

Three Months Ended

Three Months Ended

 

$ in millions, except
ARPU
(rounding
differences may occur)

January 31,
2021
Enrollments

January 31,
2021
Bookings

January 31,
2020
Enrollments

January 31,
2020
Bookings

Year-over-Year %
Change of Total

Bookings & ARPU

Aspen University

1,593

 $23.5

1,371

 $19.9

 

USU

    536

 $9.6

    375

 $6.7

 

Total

2,129

 $33.0

            1,746

 $26.5

24%

ARPU

 

 $15,513

 

 $15,199

2%

1Bookings are defined by multiplying LTV by new student enrollments for each operating unit.

2Average Revenue Per Enrollment (ARPU) is defined by dividing total Bookings by total new student enrollments for each operating unit.


Higher bookings drove an average revenue per enrollment (ARPU) increase of 2%, reflecting a mix shift towards higher LTV nursing licensure degree programs, partially offset by the planned flattening of first year online pre-requisite student enrollments at the Phoenix BSN pre-licensure campuses.


Revenue increased 33% to $16.6 million for Q3 fiscal 2021 as compared to $12.5 million for Q3 fiscal 2020. USU accounted for 29% and Aspen University's BSN Pre-Licensure program accounted for 22% of overall Company revenues for Q3 fiscal 2021.


Gross profit and gross margin were $8.7 million and 52%, respectively, for Q3 fiscal 2021 versus $7.1 million and 57%, respectively, for Q3 fiscal 2020. For Q3 fiscal 2021, instructional costs were $3.9 million or 24% of consolidated revenue and marketing costs were $3.6 million or 22% of consolidated revenue. For Q3 fiscal 2020, instructional costs were $2.6 million or 21% of consolidated revenue and marketing costs were $2.5 million or 20% of consolidated revenue. The increase in instructional costs as a percent of revenue were primarily due to the hiring of full-time faculty for the Company’s Pre-licensure program at the Phoenix main campus preparing for double cohorts starting in February 2021, as well as new campuses in Tampa, FL and Austin, TX.


For the third quarter of fiscal year 2021, net loss applicable to shareholders was ($2.8 million) or basic net loss per share of ($0.11) versus net loss applicable to shareholders of ($2.3 million) or basic net loss per share of ($0.12) in the prior year period. Aspen University generated $1.4 million of net income for Q3 fiscal 2021, and USU generated $0.3 million of net income in Q3 fiscal 2021. AGI corporate incurred $4.5 million of operating expenses for Q3 fiscal 2021.


Adjusted Net Loss, a non-GAAP financial measure, was ($2.1 million) for the third quarter of fiscal year 2021 as compared to Adjusted Net Loss of ($0.9 million) in the prior year period. Adjusted Loss Per Share, a non-GAAP financial measure, was ($0.09) for the third quarter of fiscal year 2021 as compared to Adjusted Loss per Share of ($0.05) in the prior year period.




2



 


EBITDA, a non-GAAP financial measure, was ($2.2 million) or (13%) margin in Q3 fiscal 2021 as compared to an EBITDA of ($1.1 million) or (9%) margin in Q3 fiscal 2020. Adjusted EBITDA, a non-GAAP financial measure, was ($0.9 million) or (5%) margin in Q3 fiscal 2021 as compared to an Adjusted EBITDA of $0.2 million or 2% margin in Q3 fiscal 2020.


 

Three Months Ended January 31, 2021

*As a percentage of revenue
attributable to each unit

Aspen University

USU

AGI Corporate

Consolidated

GAAP Gross Profit Margin*

54%

53%

NA

52%

Instructional costs and services*

22%

27%

NA

24%

Marketing and promotional costs*

20%

21%

NA

22%

Net income

$1.4

$0.3

($4.5)

($2.8)

EBITDA1

$1.9

$0.4

($4.5)

($2.2)

EBITDA margin*

16%

8%

NA

(13%)

Adjusted EBITDA1

$2.5

$0.5

($3.8)

($0.9)

Adjusted EBITDA margin*

21%

10%

NA

(5%)

1 See reconciliations of GAAP to Non-GAAP financial measures under "Non-GAAPFinancial Measures" below.


COVID-19 Update and Fourth Quarter Revenue Forecast

In our third fiscal quarter ending January 31, 2021, which has been historically a seasonally slower quarter given it falls during the holiday months of November and December, Aspen University saw approximately 4% less course registrations than seasonally expected in our Aspen Nursing + Other unit (which equates to approximately $110,000 of reduced revenue per month or $330,000 in the quarter relative to the Company’s forecast).

USU’s MSN-FNP program also saw a similar course start decline of approximately 4% in the quarter relative to the Company’s forecast, which equates to approximately $190,000 of reduced revenue for the quarter.

We believe COVID-19 ‘Wave Two’ was the key factor in the lower course starts than forecasted at both universities in the quarter, given that all the states in the country are now affected – not just some of the major metros. Our predominant student demographic of Registered Nurses (as of January 31, 2021, 9,277 of the Company’s 13,407 total active students or 69% are RNs) has been especially overwhelmed over the past several months, so this is not unexpected.

The status and/or reasons identified by our predominantly RN student body who constitute the lower course starts over the past several months fall into four categories: 1) rescheduling of upcoming course registrations to a later date, 2) requests for temporary leave of absence, 3) requests to delay placement into preferred clinical location timed with the facility accepting new in-person students again, and 4) course or program withdrawal requests due to family emergencies, pressures at work/emotional distress and lack of time.


The Company expects the COVID ‘Wave Two’ effect to continue throughout the current fourth fiscal quarter, as we are forecasting approximately 4.5% less course registrations than seasonally expected in our Aspen Nursing + Other unit and USU’s MSN-FNP program. Consequently, in our current fourth fiscal quarter ending April 30, 2021, we are expecting year-over-year revenue growth in the range of 31% - 33% ($18.4 - $18.7 million), versus the Company’s previous forecast of 36% growth or $19.1 million.



3



 


Liquidity


At January 31, 2021, the Company reported cash and cash equivalents of $10.0 million and restricted cash of $3.4 million. The Company used cash of ($3.2 million) in operations in the third quarter of fiscal year 2021, as compared to using ($1.8 million) in same period last year. For the nine month period of fiscal year 2021, cash used from operations is $5.3 million or an average of $1.8 million per quarter.


Conference Call:


Aspen Group will host a conference call to discuss its third quarter fiscal year 2021 financial results and business outlook on Tuesday, March 16, 2021, at 4:30 p.m. (ET). Aspen Group will issue a press release reporting results after the market closes on that day. The conference call can be accessed by dialing toll-free (844) 452-6823 (U.S.) or (731) 256-5216 (international), passcode 9391007. 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 seven day dial-in replay which can be accessed by dialing toll-free (855) 859-2056 or (404) 537-3406 (international), passcode 9391007.


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 (loss), operating income (loss), and cash flow from operating activities, liquidity or any other financial measures. They may not be indicative of the historical operating results of AGI 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 Net Income (Loss), Adjusted Earnings (Loss) Per Share, EBITDA and Adjusted EBITDA, EBITDA margin and Adjusted EBITDA margin, which are non-GAAP financial measures. We believe that management, analysts and shareholders benefit from referring to the following non-GAAP financial measures to evaluate and assess our core operating results from period-to-period after removing the impact of items that affect comparability. Our management recognizes that the non-GAAP financial measures have inherent limitations because of the excluded items described below.


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 AGI 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.




4



 


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.

AGI defines Adjusted Net Income (Loss) as net earnings (loss) from operations adding back non-recurring charges and stock-based compensation expense as reflected in the table below.  Nine months fiscal 2021 includes – non-cash stock-based compensation expense of $1.2 million related to the accelerated amortization expense for the price vesting of Executive RSUs and non-recurring charges includes a $1.4 million interest expense charge related to the conversion of $10 million Convertible Notes and $0.1 million of interest expense which arose from the acceleration of amortization arising from the exercise of warrants issued to a lender. The following table presents a reconciliation of net loss and earnings (loss) per share to Adjusted Net Income (Loss) and Adjusted Earnings (Loss) Per Share:

 

 

Three Months Ended January 31,

 

Nine Months Ended January 31,

 

2021

 

2020

 

2021

 

2020

Earnings (loss) per share

$

(0.11)

 

 

$

(0.12)

 

 

$

(0.35)

 

 

$

(0.26)

 

Weighted average number of common stock outstanding*

24,544,334 

 

 

19,420,987 

 

 

23,354,036 

 

 

19,046,558 

 

Net loss

$

(2,815,266)

 

 

$

(2,281,052)

 

 

$

(8,128,987)

 

 

$

(4,994,502)

 

Add back:

 

 

 

 

 

 

 

   Stock-based compensation

701,170 

 

 

347,210 

 

 

3,019,828 

 

 

1,341,245 

 

   Non-recurring charges

— 

 

 

1,010,123 

 

 

1,906,203 

 

 

1,143,072 

 

Adjusted Net (Loss)

$

(2,114,096)

 

 

$

(923,719)

 

 

$

(3,202,956)

 

 

$

(2,510,185)

 

 

 

 

 

 

 

 

 

Adjusted (Loss) per Share

$

(0.09)

 

 

$

(0.05)

 

 

$

(0.14)

 

 

$

(0.13)

 

*Same share count used for GAAP and non-GAAP financial measures.


AGI defines Adjusted EBITDA as EBITDA excluding: (1) bad debt expense; (2) stock-based compensation; and (3) non-recurring charges such as stock based compensation and other items. Included in nine months fiscal 2021 is –non-cash stock-based compensation expense of $1.2 million related to the accelerated amortization expense for the price vesting of the Executive RSUs. The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature. Adjusted EBITDA is an important measure of our operating performance because it allows management, analysts and investors to evaluate and assess our core operating results from period-to-period after removing the impact of items that affect comparability.


The following table presents a reconciliation of consolidated net loss to EBITDA and Adjusted EBITDA:


 

Three Months Ended January 31,

 

Nine Months Ended January 31,

 

2021

 

2020

 

2021

 

2020

Net loss

$

(2,815,266)

 

 

$

(2,281,052)

 

 

$

(8,128,987)

 

 

$

(4,994,502)

 

Interest expense, net

33,436 

 

 

570,020 

 

 

2,018,176 

 

 

1,416,784 

 

Taxes

10,460 

 

 

98,173 

 

 

45,090 

 

 

243,035 

 

Depreciation and amortization

535,273 

 

 

475,393 

 

 

1,552,254 

 

 

1,710,192 

 

EBITDA

(2,236,097)

 

 

(1,137,466)

 

 

(4,513,467)

 

 

(1,624,491)

 

Bad debt expense

670,000 

 

 

2,547 

 

 

1,702,000 

 

 

651,205 

 

Stock-based compensation

701,170 

 

 

347,210 

 

 

3,019,828 

 

 

1,341,245 

 

Non-recurring charges

— 

 

 

1,010,123 

 

 

419,437 

 

 

1,143,072 

 

Adjusted EBITDA

$

(864,927)

 

 

$

222,414 

 

 

$

627,798 

 

 

$

1,511,031 

 






5



 


The following table presents a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA by business unit:


 

Three Months Ended January 31, 2021

 

Consolidated

 

AGI Corporate

 

Aspen BSN  Pre-Licensure

 

AU Online

 

AU Total

 

USU

Net income (loss)

$

(2,815,266)

 

 

$

(4,537,882)

 

 

$

989,100 

 

1

$

386,259 

 

 

$

1,375,359 

 

 

$

347,257 

 

Interest expense, net

33,436 

 

 

33,516 

 

 

— 

 

 

— 

 

 

— 

 

 

(80)

 

Taxes

10,460 

 

 

3,600 

 

 

— 

 

 

6,800 

 

 

6,800 

 

 

60 

 

Depreciation and amortization

535,273 

 

 

15,540 

 

 

25,000 

 

 

467,303 

 

 

492,303 

 

 

27,430 

 

EBITDA

(2,236,097)

 

 

(4,485,226)

 

 

1,014,100 

 

1

860,362 

 

 

1,874,462 

 

 

374,667 

 

Bad debt expense

670,000 

 

 

— 

 

 

— 

 

 

610,000 

 

 

610,000 

 

 

60,000 

 

Stock-based compensation

701,170 

 

 

692,244 

 

 

— 

 

 

(12,468)

 

 

(12,468)

 

 

21,394 

 

Adjusted EBITDA

$

(864,927)

 

 

$

(3,792,982)

 

 

$

1,014,100 

 

1

$

1,457,894 

 

 

$

2,471,994 

 

 

$

456,061 

 


1Aspen’s BSN Pre-Licensure program accounted for net income of $1.0 million (which includes $1.8 million of net income from the Phoenix metro, offset by the net loss of ($0.8) million in the Austin and Tampa metros) of the $1.4 million generated at Aspen University. Aspen’s BSN Pre-Licensure program accounted for EBITDA of $1.0 million of the $1.9 million EBITDA generated at Aspen University, operating at an EBITDA margin of 28% - the highest margin unit of the Company. Reconciliation from net income to EBITDA and Adjusted EBITDA for the Aspen BSN Pre-Licensure program delivers the same result, as there were no material interest, taxes, depreciation and amortization expenses incurred in this unit.



Definitions


Bookings – is defined by multiplying LTV by new student enrollments for each operating unit.


Lifetime Value ("LTV") – is calculated as the weighted average total amount of tuition and fees paid by every new student that enrolls in the Company's universities, after giving effect to attrition.


Average Revenue per Enrollment ("ARPU") – is defined by dividing total bookings by total new student enrollments for each operating unit.


Marketing Efficiency Ratio ("MER") – is defined as revenue per enrollment divided by cost per enrollment.

EBITDA Margin – is defined as EBITDA divided by revenues. We believe EBITDA margin is useful for management, analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors. EBITDA margin has certain limitations in that it does not take into account the impact to our consolidated statement of operations of certain expenses.


Adjusted EBITDA Margin – is defined as Adjusted EBITDA divided by revenues. We believe Adjusted EBITDA margin is useful for management, analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors. Adjusted EBITDA margin has certain limitations in that it does not take into account the impact to our consolidated statement of operations of certain expenses.


NM – Not meaningful.


Subsequent to the call, a transcript of the audiocast will be available from the Company's website at ir.aspen.edu.


For additional information on the financial statements and performance, please refer to the Aspen Group, Inc. Form 10-Q for the third quarter of fiscal year 2021 and Q3 2021 Financial Results Presentation published on our website.






6



 


Forward-Looking Statements


This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including our expectations regarding the future success of the BSN Pre-Licensure program, our estimates as to Lifetime Value, the expected future impact of bookings, and ARPU, and the course registrations forecast and revenue growth projections, as adjusted to reflect the anticipated impact of the COVID-19 ‘Wave Two’. 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 include the continued demand for nurses, student attrition, national and local economic factors including the substantial impact of the COVID-19 pandemic on our Aspen nursing programs (other than the pre-licensure program), the delays, side effects or other issues occurring in the manufacturing, delivering and administering the vaccines, the competitive impact from the trend of major non-profit and for-profit universities marketing online family nurse practitioner programs, consolidation among our competitors, the continued effectiveness of our marketing efforts, the effectiveness of our collection efforts and process improvements, unfavorable regulatory changes, including at the state level, and our ability to continue obtaining enrollments at low acquisition costs and keeping teaching costs down. Other risks are included in our filings with the SEC including our Form 10-K for the year ended April 30, 2020, and the prospectus supplement dated August 31, 2020. 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.


About Aspen Group, Inc.:


Aspen Group, Inc. is an education technology holding company that leverages its infrastructure and expertise to allow its two universities, Aspen University and United States University, to deliver on the vision of making college affordable again.


Investor Relations Contact:


Kim Rogers
Managing Director
Hayden IR
385-831-7337 
Kim@HaydenIR.com




7



 



ASPEN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


 

January 31, 2021

 

April 30, 2020

 

(Unaudited)

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

9,987,382 

 

 

$

14,350,554 

 

Restricted cash

3,395,068 

 

 

3,556,211 

 

Accounts receivable, net of allowance of $2,924,887 and $1,758,920, respectively

15,832,552 

 

 

14,326,791 

 

Prepaid expenses

1,209,197 

 

 

941,671 

 

Other receivables

— 

 

 

23,097 

 

Other current assets

1,378,173 

 

 

173,090 

 

Total current assets

31,802,372 

 

 

33,371,414 

 

 

 

 

 

Property and equipment:

 

 

 

Computer equipment and hardware

799,826 

 

 

649,927 

 

Furniture and fixtures

1,013,103 

 

 

1,007,099 

 

Leasehold improvements

920,736 

 

 

867,024 

 

Instructional equipment

315,993 

 

 

301,842 

 

Software

7,944,693 

 

 

6,162,770 

 

Construction in progress

907,780 

 

 

— 

 

 

11,902,131 

 

 

8,988,662 

 

Less accumulated depreciation and amortization

(4,355,308)

 

 

(2,841,019)

 

Total property and equipment, net

7,546,823 

 

 

6,147,643 

 

Goodwill

5,011,432 

 

 

5,011,432 

 

Intangible assets, net

7,900,000 

 

 

7,900,000 

 

Courseware, net

110,069 

 

 

111,457 

 

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

45,329 

 

 

45,329 

 

Long term contractual accounts receivable

9,986,613 

 

 

6,701,136 

 

Debt issue cost, net

26,389 

 

 

182,418 

 

Operating lease right of use assets, net

11,114,766 

 

 

6,412,851 

 

Deposits and other assets

500,470 

 

 

355,831 

 

Total assets

$

74,044,263 

 

 

$

66,239,511 

 

(Continued)



8



 


ASPEN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)


 

January 31, 2021

 

April 30, 2020

 

(Unaudited)

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

1,155,977 

 

 

$

1,505,859 

 

Accrued expenses

2,293,515 

 

 

537,413 

 

Deferred revenue

5,600,371 

 

 

3,712,994 

 

Due to students

2,243,690 

 

 

2,371,844 

 

Operating lease obligations, current portion

2,102,209 

 

 

1,683,252 

 

Other current liabilities

307,677 

 

 

545,711 

 

Total current liabilities

13,703,439 

 

 

10,357,073 

 

 

 

 

 

Convertible notes, net of discount of $0 and $1,550,854, respectively

— 

 

 

8,449,146 

 

Operating lease obligations, less current portion

9,968,293 

 

 

5,685,335 

 

Total liabilities

23,671,732 

 

 

24,491,554 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock, $0.001 par value; 1,000,000 shares authorized,

 

 

 

0 issued and 0 outstanding at January 31, 2021 and April 30, 2020

— 

 

 

— 

 

Common stock, $0.001 par value; 40,000,000 shares authorized,

 

 

 

24,939,673 issued and 24,784,187 outstanding at January 31, 2021

 

 

 

21,770,520 issued and 21,753,853 outstanding at April 30, 2020

24,940 

 

 

21,771 

 

Additional paid-in capital

108,003,022 

 

 

89,505,216 

 

Treasury stock (155,486 and 16,667 shares at January 31, 2021 and April 30, 2020, respectively)

(1,817,414)

 

 

(70,000)

 

Accumulated deficit

(55,838,017)

 

 

(47,709,030)

 

Total stockholders’ equity

50,372,531 

 

 

41,747,957 

 

Total liabilities and stockholders’ equity

$

74,044,263 

 

 

$

66,239,511 

 




9



 



ASPEN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



 

Three Months Ended January 31,

 

Nine Months Ended January 31,

 

2021

 

2020

 

2021

 

2020

Revenues

$

16,624,837 

 

 

$

12,537,940 

 

 

$

48,761,444 

 

 

$

34,981,887 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

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

7,559,951 

 

 

5,163,007 

 

 

20,732,254 

 

 

13,704,121 

 

   General and administrative

10,644,438 

 

 

8,625,041 

 

 

30,723,349 

 

 

22,613,242 

 

   Bad debt expense

670,000 

 

 

2,547 

 

 

1,702,000 

 

 

651,205 

 

   Depreciation and amortization

535,273 

 

 

475,393 

 

 

1,552,254 

 

 

1,710,192 

 

    Total operating expenses

19,409,662 

 

 

14,265,988 

 

 

54,709,857 

 

 

38,678,760 

 

 

 

 

 

 

 

 

 

Operating loss

(2,784,825)

 

 

(1,728,048)

 

 

(5,948,413)

 

 

(3,696,873)

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

   Interest expense

(33,539)

 

 

(571,958)

 

 

(2,018,664)

 

 

(1,424,607)

 

   Other income (expense), net

13,558 

 

 

34,117 

 

 

(116,820)

 

 

189,486 

 

     Total other expense, net

(19,981)

 

 

(537,841)

 

 

(2,135,484)

 

 

(1,235,121)

 

 

 

 

 

 

 

 

 

Loss before income taxes

(2,804,806)

 

 

(2,265,889)

 

 

(8,083,897)

 

 

(4,931,994)

 

 

 

 

 

 

 

 

 

Income tax expense

10,460 

 

 

15,163 

 

 

45,090 

 

 

62,508 

 

 

 

 

 

 

 

 

 

Net loss

$

(2,815,266)

 

 

$

(2,281,052)

 

 

$

(8,128,987)

 

 

$

(4,994,502)

 

 

 

 

 

 

 

 

 

Net loss per share - basic and diluted

$

(0.11)

 

 

$

(0.12)

 

 

$

(0.35)

 

 

$

(0.26)

 

 

 

 

 

 

 

 

 

Weighted average number of common stock outstanding - basic and diluted

24,544,334 

 

 

19,420,987 

 

 

23,354,036 

 

 

19,046,558 

 





10



 


ASPEN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Three Months Ended January 31, 2021 and 2020

(Unaudited)



 

Common Stock

 

Additional
Paid-In
Capital

 

Treasury
Stock

 

Accumulated
Deficit

 

Total
Stockholders’
Equity

 

Shares

 

Amount

 

 

 

 

Balance at October 31, 2020

24,416,539 

 

 

$

24,417 

 

 

$

105,092,551 

 

 

$

— 

 

 

$

(53,022,751)

 

 

$

52,094,217 

 

Stock-based compensation

— 

 

 

— 

 

 

701,170 

 

 

— 

 

 

— 

 

 

701,170 

 

Common stock issued for stock options exercised for cash

447,134 

 

 

447 

 

 

2,180,352 

 

 

(1,817,414)

 

 

— 

 

 

363,385 

 

Common stock issued for vested restricted stock units

74,000 

 

 

74 

 

 

(74)

 

 

— 

 

 

— 

 

 

— 

 

Common stock issued for services

2,000 

 

 

 

 

19,898 

 

 

— 

 

 

— 

 

 

19,900 

 

Amortization of warrant based cost

— 

 

 

— 

 

 

9,125 

 

 

— 

 

 

— 

 

 

9,125 

 

Net loss

— 

 

 

— 

 

 

— 

 

 

— 

 

 

(2,815,266)

 

 

(2,815,266)

 

Balance at January 31, 2021

24,939,673 

 

 

$

24,940 

 

 

$

108,003,022 

 

 

$

(1,817,414)

 

 

$

(55,838,017)

 

 

$

50,372,531 

 

 




 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

Additional
Paid-In
Capital

 

Treasury
Stock

 

Accumulated
Deficit

 

Total
Stockholders’
Equity

 

Shares

 

Amount

 

 

 

 

Balance at October 31, 2019

19,142,316 

 

 

$

19,142 

 

 

$

69,781,363 

 

 

$

(70,000)

 

 

$

(44,763,415)

 

 

$

24,967,090 

 

Stock-based compensation

— 

 

 

— 

 

 

737,820 

 

 

— 

 

 

— 

 

 

737,820 

 

Common stock issued for cashless stock options exercised

8,352 

 

 

 

 

(9)

 

 

— 

 

 

— 

 

 

— 

 

Common stock issued for stock options exercised for cash

121,407 

 

 

121 

 

 

530,547 

 

 

— 

 

 

— 

 

 

530,668 

 

Amortization of warrant based cost

— 

 

 

— 

 

 

9,125 

 

 

— 

 

 

— 

 

 

9,125 

 

Amortization of restricted stock issued for services

— 

 

 

— 

 

 

24,398 

 

 

— 

 

 

— 

 

 

24,398 

 

Restricted stock issued for services, subject to vesting

40,000 

 

 

40 

 

 

(40)

 

 

— 

 

 

— 

 

 

— 

 

Common stock issued for equity raise, net of underwriter costs of $1,222,371

2,415,000 

 

 

2,415 

 

 

16,042,464 

 

 

— 

 

 

— 

 

 

16,044,879 

 

Other offering costs

— 

 

 

— 

 

 

(51,282)

 

 

— 

 

 

— 

 

 

(51,282)

 

Beneficial conversion feature on convertible debt

— 

 

 

— 

 

 

1,692,309 

 

 

— 

 

 

— 

 

 

1,692,309 

 

Common stock short swing reclamation

— 

 

 

— 

 

 

5,433 

 

 

— 

 

 

— 

 

 

5,433 

 

Net loss

— 

 

 

— 

 

 

— 

 

 

— 

 

 

(2,281,052)

 

 

(2,281,052)

 

Balance at January 31, 2020

21,727,075 

 

 

$

21,727 

 

 

$

88,772,128 

 

 

$

(70,000)

 

 

$

(47,044,467)

 

 

$

41,679,388 

 






11



 


ASPEN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED)

Nine months ended January 31, 2021 and 2020

(Unaudited)

 

Common Stock

 

Additional
Paid-In
Capital

 

Treasury
Stock

 

Accumulated
Deficit

 

Total
Stockholders’
Equity

 

Shares

 

Amount

 

 

 

 

Balance at April 30, 2020

21,770,520 

 

 

$

21,771 

 

 

$

89,505,216 

 

 

$

(70,000)

 

 

$

(47,709,030)

 

 

$

41,747,957 

 

Stock-based compensation

— 

 

 

— 

 

 

3,019,828 

 

 

— 

 

 

— 

 

 

3,019,828 

 

Common stock issued for stock options exercised for cash

1,364,721 

 

 

1,365 

 

 

4,394,749 

 

 

(1,817,414)

 

 

— 

 

 

2,578,700 

 

Common stock issued for cashless stock options exercised

22,339 

 

 

22 

 

 

(22)

 

 

— 

 

 

— 

 

 

— 

 

Common stock issued for conversion of Convertible Notes

1,398,602 

 

 

1,399 

 

 

9,998,601 

 

 

— 

 

 

— 

 

 

10,000,000 

 

Common stock issued for vested restricted stock units

206,109 

 

 

206 

 

 

(206)

 

 

— 

 

 

— 

 

 

— 

 

Common stock issued for warrants exercised for cash

192,049 

 

 

192 

 

 

1,081,600 

 

 

— 

 

 

— 

 

 

1,081,792 

 

Common stock issued for services

2,000 

 

 

 

 

19,898 

 

 

— 

 

 

— 

 

 

19,900 

 

Modification charge for warrants exercised

— 

 

 

— 

 

 

25,966 

 

 

— 

 

 

— 

 

 

25,966 

 

Amortization of warrant based cost

— 

 

 

— 

 

 

27,375 

 

 

— 

 

 

— 

 

 

27,375 

 

Cancellation of treasury stock

(16,667)

 

 

(17)

 

 

(69,983)

 

 

70,000 

 

 

— 

 

 

— 

 

Net loss

— 

 

 

— 

 

 

— 

 

 

— 

 

 

(8,128,987)

 

 

(8,128,987)

 

Balance January 31, 2021

24,939,673 

 

 

$

24,940 

 

 

$

108,003,022 

 

 

$

(1,817,414)

 

 

$

(55,838,017)

 

 

$

50,372,531 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

Additional
Paid-In
Capital

 

Treasury
Stock

 

Accumulated
Deficit

 

Total
Stockholders’
Equity

 

Shares

 

Amount

 

 

 

 

Balance at April 30, 2019

18,665,551 

 

 

$

18,666 

 

 

$

68,562,727 

 

 

$

(70,000)

 

 

$

(42,049,965)

 

 

$

26,461,428 

 

Stock-based compensation

— 

 

 

— 

 

 

1,627,304 

 

 

— 

 

 

— 

 

 

1,627,304 

 

Common stock issued for cashless stock options exercised

190,559 

 

 

191 

 

 

(191)

 

 

— 

 

 

— 

 

 

— 

 

Common stock issued for stock options exercised for cash

234,233 

 

 

234 

 

 

768,147 

 

 

— 

 

 

— 

 

 

768,381 

 

Common stock issued for cashless warrant exercise

76,929 

 

 

77 

 

 

(77)

 

 

— 

 

 

— 

 

 

— 

 

Amortization of warrant based cost

— 

 

 

— 

 

 

27,690 

 

 

— 

 

 

— 

 

 

27,690 

 

Amortization of restricted stock issued for services

— 

 

 

— 

 

 

97,748 

 

 

— 

 

 

— 

 

 

97,748 

 

Restricted stock issued for services, subject to vesting

144,803 

 

 

144 

 

 

(144)

 

 

— 

 

 

— 

 

 

— 

 

Common stock issued for equity raise, net of underwriter costs of $1,222,371

2,415,000 

 

 

2,415 

 

 

16,042,464 

 

 

— 

 

 

— 

 

 

16,044,879 

 

Other offerings costs

— 

 

 

— 

 

 

(51,282)

 

 

— 

 

 

— 

 

 

(51,282)

 

Beneficial conversion feature on convertible debt

— 

 

 

— 

 

 

1,692,309 

 

 

— 

 

 

— 

 

 

1,692,309 

 

Common stock short swing reclamation

— 

 

 

— 

 

 

5,433 

 

 

— 

 

 

— 

 

 

5,433 

 

Net loss

— 

 

 

— 

 

 

— 

 

 

— 

 

 

(4,994,502)

 

 

(4,994,502)

 

Balance at January 31, 2020

21,727,075 

 

 

$

21,727 

 

 

$

88,772,128 

 

 

$

(70,000)

 

 

$

(47,044,467)

 

 

$

41,679,388 

 



12



 


ASPEN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

Nine Months Ended January 31,

 

2021

 

2020

Cash flows from operating activities:

 

 

 

Net loss

$

(8,128,987)

 

 

$

(4,994,502)

 

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

 

 

 

Bad debt expense

1,702,000 

 

 

651,205 

 

Depreciation and amortization

1,552,254 

 

 

1,710,192 

 

Stock-based compensation

3,019,828 

 

 

1,782,472 

 

Amortization of warrant based cost

27,375 

 

 

27,690 

 

Loss on asset disposition

— 

 

 

3,918 

 

Amortization of debt discounts

1,550,854 

 

 

182,218 

 

Amortization of debt issue costs

156,029 

 

 

88,825 

 

Modification charge for warrants exercised

25,966 

 

 

— 

 

Common stock issued for services

19,900 

 

 

97,748 

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(6,493,238)

 

 

(7,104,911)

 

Prepaid expenses

(267,526)

 

 

(567,192)

 

Other receivables

23,097 

 

 

395 

 

Other current assets

(1,205,083)

 

 

(173,090)

 

Deposits and other assets

(185,599)

 

 

280,091 

 

Accounts payable

(349,882)

 

 

(908,083)

 

Accrued expenses

1,756,102 

 

 

426,567 

 

Deferred rent

— 

 

 

(17,805)

 

Due to students

(128,154)

 

 

1,137,244 

 

Deferred revenue

1,887,377 

 

 

3,237,878 

 

Other current liabilities

(238,032)

 

 

313,875 

 

Net cash used in operating activities

(5,275,719)

 

 

(3,825,265)

 

Cash flows from investing activities:

 

 

 

Purchases of courseware and accreditation

(31,330)

 

 

(11,001)

 

Purchases of property and equipment

(2,877,758)

 

 

(1,929,878)

 

Net cash used in investing activities

(2,909,088)

 

 

(1,940,879)

 

Cash flows from financing activities:

 

 

 

Proceeds from warrants exercised

1,081,792 

 

 

— 

 

Proceeds from stock options exercised

2,578,700 

 

 

768,381 

 

Proceeds from sale of common stock net of underwriter costs

— 

 

 

16,044,879 

 

Disbursements for equity offering costs

— 

 

 

(51,282)

 

Common stock short swing reclamation

— 

 

 

5,433 

 

Net cash provided by financing activities

3,660,492 

 

 

16,767,411 

 

(Continued)






13



 


ASPEN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(Unaudited)

 

Nine Months Ended January 31,

 

2021

 

2020

Net (decrease) increase in cash, cash equivalents and restricted cash

$

(4,524,315)

 

 

$

11,001,267 

 

Cash, cash equivalents and restricted cash at beginning of period

17,906,765 

 

 

9,967,752 

 

Cash, cash equivalents and restricted cash at end of period

$

13,382,450 

 

 

$

20,969,019 

 

 

 

 

 

Supplemental disclosure cash flow information

 

 

 

Cash paid for interest

$

310,958 

 

 

$

979,792 

 

Cash paid for income taxes

$

49,008 

 

 

$

110,307 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

Common stock issued for conversion of Convertible Notes

$

10,000,000 

 

 

$

— 

 

Right-of-use lease asset offset against operating lease obligations

$

3,914,640 

 

 

$

7,693,268 

 

Common stock issued for services

$

— 

 

 

$

178,447 

 

Beneficial conversion feature on convertible debt

$

— 

 

 

$

1,692,309 

 


The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the accompanying consolidated balance sheet to the total amounts shown in the accompanying unaudited consolidated statements of cash flows:

 

January 31, 2021

 

January 31, 2020

 

 

 

 

Cash and cash equivalents

$

9,987,382 

 

 

$

20,512,808 

 

Restricted cash

3,395,068 

 

 

456,211 

 

Total cash, cash equivalents and restricted cash

$

13,382,450 

 

 

$

20,969,019 

 





14