Nature of Operations and Liquidity
|12 Months Ended|
Apr. 30, 2019
|Organization, Consolidation and Presentation of Financial Statements [Abstract]|
|Nature of Operations and Liquidity||
Note 1. Nature of Operations and Liquidity
Aspen Group, Inc. (together with its subsidiaries, the Company, Aspen, or AGI) is a holding company, which has three subsidiaries. They are Aspen University, Inc. (Aspen University) organized in 1987, Aspen Nursing, Inc. (ANI) (a subsidiary of Aspen University) formed in July 2018 and United States University, Inc. (USU) formed in May 2017. USU was the vehicle we used to acquire United States University on December 1, 2017. (See Note 5). When we refer to USU in this Report, we refer to either the online university which has operated under the name United States University or our subsidiary which operates this university, as the context implies.
AGI 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. Because we believe higher education should be a catalyst to our students long-term economic success, we exert financial prudence by offering affordable tuition that is one of the greatest values in higher education. AGIs primary focus relative to future growth is to target the high growth nursing profession, as today 81% of all students across both universities are degree-seeking nursing students.
Since 1993, Aspen University has been nationally accredited by the Distance Education and Accrediting Council (DEAC), a national accrediting agency recognized by the U.S. Department of Education (the DOE). In February 2019, the DEAC informed Aspen University that it had renewed its accreditation for five years through January 2024.
Since 2009, USU has been regionally accredited by WASC Senior College and University Commission. (WSCUC).
Both universities are qualified to participate under the Higher Education Act of 1965, as amended (HEA) and the Federal student financial assistance programs (Title IV, HEA programs). USU has a provisional certification resulting from the ownership change of control on December 1, 2017.
At April 30, 2019, the Company had a cash balance of $9,519,352 with an additional $448,400 in restricted cash.
In April 2018, the Company raised $23,023,000 in equity through the sale of 3,220,000 shares at $7.15 per share. With the proceeds, the Company repaid a $7.5 million senior secured term loan.
On November 5, 2018 the Company entered into a three year, $5,000,000 senior revolving credit facility. There is currently no outstanding balance under that facility.
The Company paid $1,160,000 of principal and accrued interest related to a convertible note on December 3, 2018, as explained in Note 9. Also, on February 25, 2019, the Company paid a total of $1,080,000, which included the remaining $1 million of principal, $19,068 of accrued unpaid interest and settlement expense of $60,932 to prepay the debt and eliminate the holders conversion option. This was the final payment for the acquisition of USU and was originally due on December 1, 2019. (See Note 9).
The Company also anticipates ongoing investment spending, including an expected investment of approximately $600,000 related to the new campus for its Pre-Licensure BSN Program with Honor Health.
In March 2019, the Company entered into loan agreements and received proceeds of $10 million. In connection with the loan agreements, the Company issued 18 month senior secured promissory notes, with the right to extend the term of the loan for an additional 12 months by paying a 1% one-time extension fee. Also, as a term of the loan agreement, the February 25, 2019 payment detailed above was made. (See Note 10)
During the year ended April 30, 2019 the Company used cash of $4,835,313, which included using $10,216,014 in operating activities. The Company expects revenue growth to continue, and expenses to grow at a slower pace. As a result, the Company expects cash used in operations to decline in future quarters as compared to the quarter ending April 30, 2019.
The Company has analyzed its liquidity position and believes its current resources are adequate to meet anticipated liquidity needs for the next 12 months.
The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef