Market Overview

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. (NASDAQ: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  

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