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Aspen Group Reports Record Revenue of $12.5 Million in the Third Quarter Fiscal Year 2020, Delivering 48% Growth Year-over-Year

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Revenue Growth Reflects Business Shift to Higher LTV Programs; Aspen BSN Pre-Licensure and USU Increased to 42% of Revenue, Up from 25% in Third Quarter 2019

Liquidity at Quarter End Improves to a Record $26 Million Following the Equity Financing and Debt Restructure

NEW YORK, March 10, 2020 (GLOBE NEWSWIRE) -- Aspen Group, Inc. (ASPU) (“the Company or AGI”), an education technology holding company, today announced financial results for its 2020 fiscal third quarter ended January 31, 2020.

Third Quarter and Year-to-Date Fiscal Year 2020 Summary Results

Three months ended

Nine months ended

($ in millions, rounding differences may occur)

January 31, 2020

January 31, 2019

% Change

January 31, 2020

January 31, 2019

% Change

Revenue

$12.5

$8.5

48%

$35.0

$23.8

47%

GAAP Gross profit

$7.1

$4.2

68%

$20.5

$11.8

74%

GAAP Gross margin (%)

57%

50%

700 bps

59%

50%

900 bps

Operating Loss

($1.7)

($2.4)

29%

($3.7)

($7.7)

52%

Net Loss

($2.3)

($2.4)

3%

($5.0)

($7.7)

35%

Cash Used in Operations

($1.8)

($1.9)

7%

($3.8)

($7.4)

49%

EBITDA (Loss)*

($1.1)

($1.7)

34%

$(1.6)

($5.9)

73%

Adjusted EBITDA Profit/(Loss)*

$0.2

($1.1)

>100%

$1.5

($4.2)

>100%

*See “Non-GAAP Financial Measures” on page 3.

Third Quarter Performance Highlights

  • Revenue grew 48% to $12,537,940, while marketing expenses increased by only 9% year-over-year, driving a gross margin improvement of 700 basis points to 57%

  • Bookings rose 72% to $26.5 million lifting average revenue per enrollment (ARPU) 34% to $15,199

  • Aspen University Online and Pre-Licensure BSN units, as well as United States University, were net income positive for the second consecutive quarter primarily due to improved operating efficiencies and lower enrollment costs

  • AGI recorded $1.0 million of one-time expense items in the quarter primarily related to the CFO transition, current period equity financing and the acceleration of the fiscal year 2019 debt conversion

  • Excluding the impact of one-time expenses, net loss for the quarter would have been ($1.3 million) versus the reported net loss of ($2.3 million)

Michael Mathews, Chairman and CEO of AGI, commented, “Our strategy of prioritizing marketing dollars to increase enrollment in our highest LTV nursing programs is working, as evidenced by another quarter of exceptional revenue growth and a 72% increase in bookings. This quarter’s growth benefited from just a 9% increase in our marketing spend demonstrating the efficiency of each marketing dollar spent, which returned a 15.1X MER and 16.2X MER in the quarter for Aspen University and United States University, respectively. A focus on operational improvements combined with lower enrollment costs resulted in another quarter of positive net income for all of our business units – Aspen University online, and pre-licensure BSN, and United States University. These results underscore the performance of our proprietary Edtech platform in lowering enrollment costs and contributing the key competitive advantages of lower tuition rates, financial flexibility and better outcomes for our students, which in turn are powering our growth. In January, we strengthened our balance sheet with a $16 million equity raise and restructured our debt to lower our interest expense and add the convert feature. These initiatives will allow us to continue investing in new pre-licensure campuses, a potential $100 million opportunity in the next five years. We will continue to invest in our future to deliver solid long-term financial performance and drive shareholder value.”

Fiscal 2020 Third Quarter Financial and Operational Results (versus Fiscal 2019 Third Quarter):

  • New student enrollments increased 28% to 1,746

    • Aspen University (AU) new student enrollments increased 23% to 1,371

    • United States University (USU) new student enrollments increased 49% to 375

  • Weighted average cost of enrollment declined 28% to $989, driven by higher conversion rates

  • Bookings increased 72% to $26.5 million due to strong growth in highest LTV degree programs

  • Average revenue per enrollment (ARPU) increased 34% over the prior year to $15,199

  • Total active student body grew 32% over the prior year to 11,033

  • Total nursing student body increased to 9,240 from 6,586 students, or 84% versus 79% of total student enrollment

Below is a comparison of enrollments and bookings** from Q3 2019 to Q3 2020. The Company’s total enrollments rose 28% year-over-year, while bookings increased 72% year-over-year to $26.5 million from $15.5 million. This translates to a 34% increase in average revenue per user (ARPU)** year-over-year, from $11,352 to $15,199, driven by the Company’s focused marketing spending on the highest LTV degree programs during the quarter.

Total Bookings and Average Revenue Per Enrollment (ARPU)

Q3'2019
Enrollments

Q3'2019
Bookings**

Q3'2020
Enrollments

Q3'2020
Bookings**

Percent Change
Total Bookings & ARPU**

Aspen University

1,112

$

11,000,250

1,371

$

19,855,050

USU

251

$

4,472,820

375

$

6,682,500

Total

1,363

$

15,473,070

1,746

$

26,537,550

72%

ARPU

$

11,352

$

15,199

34%

**“Bookings” are defined by multiplying LTV by new student enrollments for each operating unit. “Average Revenue Per User” (ARPU) is defined by dividing total bookings by total enrollments.

AGI’s overall active student body (includes both AU and USU) grew 32% year-over-year from 8,354 to 11,033. AU’s total active degree-seeking student body grew 25% year-over-year from 7,393 to 9,274. AU students paying tuition and fees through a monthly payment method grew by 13% year-over-year, from 5,259 to 5,966, representing 64% of AU’s total active student body.

On a year-over-year basis, USU’s total active student body grew from 961 to 1,759 or 83%. Sequentially, USU students paying tuition and fees through a monthly payment method increased to 1,159, up from 1,101, representing 66% of USU’s total active student body.

Revenues increased 48% to $12,537,940 for the fiscal quarter ended January 31, 2020 as compared to $8,494,627 in Q3 2019. USU accounted for 27.3% and AU’s Pre-Licensure BSN program accounted for 14.2% of overall Company revenues.

Gross profit increased by 68% to $7,094,150 or 57% gross margin for Q3 2020 versus $4,221,939 or 50% gross margin in Q3 2019. AU gross margin represented 58% of AU revenues for Q3 2020, and USU gross margin represented 60% of USU revenues for Q3 2020. AU instructional costs and services represented 19% of AU revenues for Q3 2020, while USU instructional costs and services represented 25% of USU revenues for Q3 2020. AU marketing and promotional costs represented 20% of AU revenues for Q3 2020, while USU marketing and promotional costs represented 15% of USU revenues for Q3 2020.

Net loss applicable to shareholders was $(2,281,052) or net loss per basic share of ($0.12) for Q3 2020 versus ($2,355,940) or ($0.13) for Q3 2019. Note that AGI recorded $1.0 million of one-time expense items in the quarter primarily related to the CFO transition, current period equity financing and the acceleration of the fiscal year 2019 debt conversion. Excluding the one-time expense items, the Company would have recorded a net loss of ($1,270,928) or a net loss per basic share of ($0.07).

AU generated $1.3 million of net income for Q3 2020, and USU generated $40,028 of net income in Q3 2020. AGI corporate incurred a net loss of ($3.6 million) for Q3 2020. Excluding the one-time expense items, AGI corporate would have had a net loss of ($2.6 million).

EBITDA, a non-GAAP financial measure, was ($1,137,466) or (9%) margin as compared to an EBITDA loss of ($1,726,399) or (20%) margin in Q3 2019. Adjusted EBITDA, a non-GAAP financial measure, was $222,415 or 2% margin as compared to an Adjusted EBITDA loss of ($1,105,209) or (13%) margin in Q3 2019.

AU generated EBITDA of $1.6 million or 18% margin and Adjusted EBITDA of $1.9 million or 21% margin for Q3 2020. Note that Aspen’s pre-licensure BSN program accounted for $553,345 of the $1.6 million EBITDA generated at AU, operating at an EBITDA margin of 31% — remaining the highest margin unit of the Company.

USU generated EBITDA of $163,025 or 5% margin and $248,074 of Adjusted EBITDA or 7% margin Q3 2020.

AGI corporate generated an EBITDA loss of ($2.9 million), which reflects $1.0 million of one-time expense items.

AGI consolidated generated an EBITDA loss of ($1.1 million) and Adjusted EBITDA of $222,415 for Q3 2020, compared to an EBITDA loss of ($1.7 million) and an Adjusted EBITDA loss of ($1.1 million) for Q3 2019.

The Company used cash of ($1.8 million) in operations in Q3 2020, as compared to using ($1.9 million) in Q3 2019, an improvement of 7% year-over-year. Liquidity at quarter end improved to a record $26 million following the January 2020 equity financing and debt restructure.

Full Year Forecast:

The Company reiterated its forecast for fiscal year 2020 bookings growth to meet or exceed 54% to $102 million.

The Company increased its revenue growth forecast for fiscal year 2020 to 42% versus 41% reflecting fiscal third quarter revenue performance.

Conference Call:

Aspen Group, Inc. will host a conference call to discuss its fiscal year 2020 third quarter financial results and business outlook on Tuesday, March 10, 2020, at 4:30 p.m. (ET). AGI 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 7808728. Subsequent to the call, a transcript of the audiocast will be available from the Company’s website at ir.apen.edu. There will also be a seven day dial-in replay which can be accessed by dialing toll-free (855) 859-2056 (U.S.) or (404) 537-3406 (International), passcode 7808728.

Non-GAAP – Financial Measures:

This press release includes both financial measures in accordance with the 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 EBITDA and EBITDA, each of which are non-GAAP financial measures. We believe that both management and shareholders benefit from referring to these 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.

AGI defines Adjusted EBITDA as earnings (or loss) from operations before the items in the table below. It is important to note that there were $1,010,124 of non-recurring charges for the fiscal quarter ended January 31, 2020 compared to $83,174 in the fiscal quarter ended January 31, 2019. Adjusted EBITDA is an important measure of our operating performance because it allows management, investors and analysts to evaluate and assess our core operating results from period-to-period after removing the impact of items of a non-operational nature that affect comparability.

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. 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 net loss allocable to common shareholders to Adjusted EBITDA:

Three Months Ended January 31,

Nine Months Ended January 31,

2020

2019

2020

2019

Net loss

$

(2,281,052

)

$

(2,355,940

)

$

(4,994,502

)

$

(7,668,295

)

Interest income (expense), net

570,020

(241,607

)

1,416,784

(159,332

)

Taxes

98,173

315,856

243,035

325,132

Depreciation and amortization

475,393

555,292

1,710,192

1,577,464

EBITDA (loss)

(1,137,466

)

(1,726,399

)

(1,624,491

)

(5,925,031

)

Bad debt expense

2,547

187,178

651,205

480,067

Non-recurring charges

1,010,124

83,174

1,143,072

390,711

Stock-based compensation

347,210

350,838

1,341,245

866,129

Adjusted EBITDA Profit/(Loss)

$

222,415

$

(1,105,209

)

$

1,511,031

$

(4,188,124

)

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.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements relating to the growth of future student enrollments, bookings and ARPU, Fiscal 2020 revenue growth, the expansion of the highest LTV programs, expected G&A trends including Fiscal 2020 Adjusted EBITDA, gross margins, expected campus expansion, campus capital expenditures and campus operating metrics and generating cash from operations. 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 high demand for nurses, the continued effectiveness of our marketing efforts, unanticipated delays in opening new campuses, failure to continue to obtain enrollments at low acquisition costs and keeping instructional costs down, potential student attrition and national and local economic factors. Other risks are included in our filings with the SEC including our Prospectus Supplement dated January 17, 2020, our Form 10-K for the year ended April 30, 2019 and our Quarterly Report on Form 10-Q for the three months ended July 31, 2019. 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.

Investor Relations Contact:

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


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

January 31, 2020

April 30, 2019

(Unaudited)

Assets

Current assets:

Cash

$

20,512,808

$

9,519,352

Restricted cash

456,211

448,400

Accounts receivable, net of allowance of $1,759,824 and $1,247,031, respectively

14,128,185

10,656,470

Prepaid expenses

977,937

410,745

Other receivables

1,750

2,145

Other current assets

173,090

Total current assets

36,249,981

21,037,112

Property and equipment:

Call center equipment

305,766

193,774

Computer and office equipment

396,898

327,621

Furniture and fixtures

1,550,520

1,381,271

Software

5,725,500

4,314,198

7,978,684

6,216,864

Less accumulated depreciation and amortization

(2,662,273

)

(1,825,524

)

Total property and equipment, net

5,316,411

4,391,340

Goodwill

5,011,432

5,011,432

Intangible assets, net

7,900,000

8,541,667

Courseware, net

121,235

161,930

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

45,329

45,329

Long term contractual accounts receivable

6,067,234

3,085,243

Debt issue cost, net

211,999

300,824

Right of use lease asset

7,693,268

Deposits and other assets

349,535

629,626

Total assets

$

68,966,424

$

43,204,503

(Continued)


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)

January 31, 2020

April 30, 2019

(Unaudited)

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

791,138

$

1,699,221

Accrued expenses

1,077,985

651,418

Deferred revenue

5,694,743

2,456,865

Refunds due students

2,311,745

1,174,501

Deferred rent, current portion

47,436

Convertible note payable

50,000

50,000

Operating lease obligations, current portion

1,649,934

Other current liabilities

584,659

270,786

Total current liabilities

12,160,204

6,350,227

Convertible notes, net of discount of $1,692,309

8,307,691

Senior secured loan payable, net of discount of $353,328 at April 30, 2019

9,646,672

Operating lease obligations

6,043,334

Deferred rent

775,807

746,176

Total liabilities

27,287,036

16,743,075

Commitments and contingencies

Stockholders’ equity:

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

0 issued and outstanding at January 31, 2020 and April 30, 2019

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

21,727,075 issued and 21,710,408 outstanding at January 31, 2020

18,665,551 issued and 18,648,884 outstanding at April 30, 2019

21,727

18,666

Additional paid-in capital

88,772,128

68,562,727

Treasury stock (16,667 shares)

(70,000

)

(70,000

)

Accumulated deficit

(47,044,467

)

(42,049,965

)

Total stockholders’ equity

41,679,388

26,461,428

Total liabilities and stockholders’ equity

$

68,966,424

$

43,204,503


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended
January 31,

Nine Months Ended
January 31,

2020

2019

2020

2019

Revenues

$

12,537,940

$

8,494,627

$

34,981,887

$

23,811,275

Operating expenses

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

5,163,007

4,076,980

13,704,121

11,664,887

General and administrative

8,627,588

6,284,041

23,264,447

18,318,061

Depreciation and amortization

475,393

555,292

1,710,192

1,577,464

Total operating expenses

14,265,988

10,916,313

38,678,760

31,560,412

Operating loss

(1,728,048

)

(2,421,686

)

(3,696,873

)

(7,749,137

)

Other income (expense)

Other income

34,117

142,180

189,486

240,074

Interest expense

(571,958

)

(76,434

)

(1,424,607

)

(159,232

)

Total other income/(expense), net

(537,841

)

65,746

(1,235,121

)

80,842

Loss before income taxes

(2,265,889

)

(2,355,940

)

(4,931,994

)

(7,668,295

)

Income tax expense

15,163

62,508

Net loss

$

(2,281,052

)

$

(2,355,940

)

$

(4,994,502

)

$

(7,668,295

)

Net loss per share allocable to common stockholders - basic

$

(0.12

)

$

(0.13

)

$

(0.26

)

$

(0.42

)

Weighted average number of common stock outstanding - basic

19,420,987

18,398,095

19,046,558

18,350,360


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Three Months Ended January 31, 2020 and 2019
(Unaudited)

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

(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 $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

Common Stock

Additional
Paid-In
Capital

Treasury
Stock

Accumulated
Deficit

Total
Stockholders’
Equity

Shares

Amount

Balance at October 31, 2018

18,391,092

$

18,391

$

67,102,509

$

(70,000

)

$

(38,084,103

)

$

28,966,797

Stock-based compensation

350,838

350,838

Common stock issued for cashless stock options exercised

55,871

56

(56

)

Common stock issued for stock options exercised for cash

22,985

23

50,018

50,041

Common stock issued for cashless warrant exercise

35,921

36

(36

)

Relative fair value of warrants issued with debt

255,071

255,071

Net loss

(2,355,940

)

(2,355,940

)

Balance at January 31, 2019

18,505,869

$

18,506

$

67,758,344

$

(70,000

)

$

(40,440,043

)

$

27,266,807


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED)
Nine Months Ended January 31, 2020 and 2019
(Unaudited)

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 $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

Common Stock

Additional
Paid-In
Capital

Treasury
Stock

Accumulated
Deficit

Total
Stockholders’
Equity

Shares

Amount

Balance at April 30, 2018

18,333,521

$

18,334

$

66,557,005

$

(70,000

)

$

(32,771,748

)

$

33,733,591

Stock-based compensation

866,129

866,129

Common stock issued for cashless stock options exercised

86,635

87

(87

)

Common stock issued for stock options exercised for cash

49,792

49

110,094

110,143

Common stock issued for cashless warrant exercise

35,921

36

(36

)

Relative fair value of warrants issued with debt

255,071

255,071

Purchase of treasury stock, net of broker fees

(7,370,000

)

(7,370,000

)

Re-sale of treasury stock, net of broker fees

7,370,000

7,370,000

Fees associated with equity raise

(29,832

)

(29,832

)

Net loss

(7,668,295

)

(7,668,295

)

Balance at January 31, 2019

18,505,869

$

18,506

$

67,758,344

$

(70,000

)

$

(40,440,043

)

$

27,266,807


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Nine Months Ended
January 31,

2020

2019

Cash flows from operating activities:

Net loss

$

(4,994,502

)

$

(7,668,295

)

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

Bad debt expense

651,205

480,066

Depreciation and amortization

1,710,192

1,577,464

Stock-based compensation

1,782,472

866,129

Warrants issued for services

27,690

Loss on asset disposition

3,918

Amortization of debt discounts

182,218

Amortization of debt issue costs

88,825

24,657

Amortization of prepaid shares for services

8,285

Non-cash payments to investor relations firm

97,748

Changes in operating assets and liabilities:

Accounts receivable

(7,104,911

)

(4,209,576

)

Prepaid expenses

(567,192

)

(152,094

)

Other receivables

395

105,334

Other current assets

(173,090

)

Other assets

280,091

(22,846

)

Accounts payable

(908,083

)

(517,981

)

Accrued expenses

426,567

(88,048

)

Deferred rent

(17,805

)

638,713

Refunds due students

1,137,244

554,219

Deferred revenue

3,237,878

885,091

Other liabilities

313,875

88,332

Net cash used in operating activities

(3,825,265

)

(7,430,550

)

Cash flows from investing activities:

Purchases of courseware and accreditation

(11,001

)

(89,573

)

Purchases of property and equipment

(1,929,878

)

(1,873,326

)

Net cash used in investing activities

(1,940,879

)

(1,962,899

)

Cash flows from financing activities:

Proceeds from sale of common stock net of underwriter costs

16,044,879

Disbursements for equity offering costs

(51,282

)

(29,832

)

Common stock short swing reclamation

5,433

Proceeds of stock options exercised and warrants exercised

768,381

110,143

Repayment of convertible note payable

(1,000,000

)

Offering costs paid on debt financing

(100,000

)

Purchase of treasury stock, net of broker fees

(7,370,000

)

Re-sale of treasury stock, net of broker fees

7,370,000

Net cash provided by (used in) financing activities

16,767,411

(1,019,689

)

(Continued)


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (Continued)

Nine Months Ended
January 31,

2020

2019

Net increase (decrease) in cash and cash equivalents

$

11,001,267

$

(10,413,138

)

Cash, restricted cash, and cash equivalents at beginning of period

9,967,752

14,803,065

Cash and cash equivalents at end of period

$

20,969,019

$

4,389,927

Supplemental disclosure cash flow information

Cash paid for interest

$

979,792

$

163,139

Cash paid for income taxes

$

110,307

$

Supplemental disclosure of non-cash investing and financing activities

Common stock issued for services

$

178,447

$

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

$

7,693,268

$

Beneficial conversion feature on convertible debt

$

1,692,309

$

Warrants issued as part of revolving credit facility

$

$

255,071

The following table provides a reconciliation of cash and restricted cash reported within the unaudited consolidated balance sheets that sum to the same such amounts shown in the unaudited consolidated statements of cash flows:

Nine Months Ended
January 31,

2020

2019

Cash

$

20,512,808

$

4,197,235

Restricted cash

456,211

192,692

Total cash and restricted cash

$

20,969,019

$

4,389,927