Aspen Group Reports 14% Revenue Growth for Third Quarter Fiscal 2022

Rhea-AI Summary

Aspen Group, Inc. (ASPU) reported a revenue increase to $18.9 million for Q3 FY 2022, up from $16.6 million in Q3 FY 2021, marking a 14% year-over-year growth. However, the company faced a net loss of ($3.7 million), wider than the ($2.8 million) loss in the previous year. The gross profit rose to $9.2 million with a 49% gross margin. A revised revenue outlook for FY 2022 is set at $75.5 million to $77.5 million, down from earlier guidance of $77.0 to $80.0 million. The company aims to meet robust demand in nursing education despite challenges posed by COVID-19.

Positive

• Revenue increased to $18.9 million, 14% growth YoY.
• Gross profit rose to $9.2 million.
• New campus in Atlanta approved for BSN Pre-Licensure program.

Negative

• Net loss of ($3.7 million), wider than ($2.8 million) YoY.
• Revised revenue outlook lowered to $75.5-$77.5 million from $77.0-$80.0 million.
• Gross margin decreased from 52% to 49% due to higher marketing costs.

• Revenue increased to $18.9 million compared to $16.6 million last year
• Business units with highest Lifetime Value (LTV) programs accounted for 56% of revenue
• Net loss of ($3.7) million, including losses of $1.3 million related to new campus expansion
• Received approval to open BSN Pre-Licensure program in Atlanta

NEW YORK, March 15, 2022 (GLOBE NEWSWIRE) -- Aspen Group, Inc. (Nasdaq: ASPU) (“AGI”), an education technology holding company, today announced financial results for its third quarter fiscal year 2022 ended January 31, 2022.

Third Quarter Fiscal Year 2022 Summary Results

	Three Months Ended January 31,								Nine Months Ended January 31,
$ in millions, except per share data		2022				2021				2022				2021
Revenue	$	18.9			$	16.6			$	57.3			$	48.8
Gross Profit1	$	9.2			$	8.7			$	29.3			$	27.0
Gross Margin (%)1		49	%			52	%			51	%			55	%
Net Income (Loss)	$	(3.7	)		$	(2.8	)		$	(7.5	)		$	(8.1	)
Earnings (Loss) per Share	$	(0.15	)		$	(0.11	)		$	(0.30	)		$	(0.35	)
EBITDA2	$	(2.4	)		$	(2.2	)		$	(4.2	)		$	(4.5	)
Adjusted EBITDA2	$	(1.3	)		$	(0.9	)		$	(1.5	)		$	0.6

^{_______________________                                                                                         
1} _{GAAP gross profit calculation includes marketing and promotional costs, instructional costs and services, and amortization expense of $0.4 million and $1.3 million, and $0.4 million and $1.0 million, for the three and nine months ended January 31, 2022 and 2021, respectively.}
² _{Non-GAAP financial measure. See reconciliations of GAAP to non-GAAP financial measures under "Non-GAAP–Financial Measures" starting on page 5.}

“For the third quarter, Aspen Group delivered a 14% revenue increase year-over-year, despite the spike in Covid-19 infection rates driven by the Omicron variant, which caused critical healthcare staffing shortages and workload overloads for RNs during the quarter, lowering post-licensure degree program class starts amongst our predominantly RN student body,” said Michael Mathews, Chairman and CEO of AGI. “Importantly though, as the Omicron variant subsides, there are clear and prevailing longer-term trends in nursing that underpin robust demand for our offerings and reinforce our optimism for driving revenue growth and margin improvement. A growing number of nurses are leaving the profession as they reach retirement age or due to the pandemic-induced job fatigue. This supply-side trend, coupled with the rising demand for healthcare to support the aging U.S. population, is expected to perpetuate a nursing shortage through 2030. Registered nursing is one of the highest in-demand professions in the American workforce, and our EdTech platform puts us in a solid position to serve this growing market in an affordable way for students. Our recently improved balance sheet supports our long-term growth objectives.”

COVID-19 Update

Nursing students represented 87% of the Company’s total student body at the end of the third quarter of fiscal 2022. Of the 11,889 nursing students, 2,277 are BSN Pre-Licensure students located across our four metro locations (Phoenix, Austin, Tampa, and Nashville). The remaining 9,612 nursing students are licensed registered nurses (RNs) studying to earn an advanced degree (RN to BSN, MSN, MSN-FNP, or DNP degree programs). Post-licensure nursing students represent 70% of the Company’s total student body at the end of the third quarter and are the AGI students primarily affected by the COVID-19 pandemic.

Starting in the second half of June 2021 and continuing through January 2022, the Company saw lower course starts than seasonally expected among our RN student body. For example, at Aspen University, course starts among RNs from June 2021 through January 2022 increased by approximately 3% year-over-year. By comparison, over the previous two full fiscal years (Fiscal Year 2021 and Fiscal Year 2020), course starts among RNs at Aspen University increased by an average of approximately 10% year-over-year.

Aspen Group cannot be certain what impact future COVID-19 variants will have on the Company’s results through the remainder of Fiscal Year 2022 and into Fiscal Year 2023.

Liquidity

At January 31, 2022, the Company had cash and cash equivalents of $6.0 million, restricted cash of $1.4 million. Cash used in operations for the nine months ended January 31, 2022 was $7.7 million, which is attributed to changes in working capital to support increased revenue.

Earlier today, the Company announced financing agreements consisting of a $10 million convertible note and a $20 million revolving credit facility. Aspen Group received the proceeds of the convertible note at the closing. The $20 million revolving credit facility is undrawn. Additionally, the Company extended its existing $5 million Revolving Credit Facility by one year to November 4, 2023.

Updated Outlook for Fiscal Year 2022

The Company has revised its outlook for fiscal year 2022 revenue to a new range of $75.5 million to $77.5 million range from the prior range of $77.0 million to $80.0 million given in the second quarter fiscal 2022 earnings release on December 14, 2021.

The table below shows the revised forecast for fiscal year 2022 guidance metrics.

Dollar amounts in millions, except per share data	Prior Guidance Range								Revised Guidance Range
Revenue	$	77.0			$	80.0			$	75.5			$	77.5
Net Income (Loss)	$	(9.0	)		$	(7.0	)		$	(11.5	)		$	(10.5	)
GAAP Earnings (Loss) per Share	$	(0.38	)		$	(0.29	)		$	(0.46	)		$	(0.42	)
EBITDA1	$	(5.0	)		$	(3.0	)		$	(7.5	)		$	(6.5	)
Adjusted EBITDA1	$	(2.0	)		$	0.0			$	(3.5	)		$	(2.5	)

¹ _{See definitions of these Non-GAAP financial measures under "Non-GAAP–Financial Measures" starting on page 5. The guidance reconciliation follows a similar format.}

Fiscal Q3 2022 Financial and Operational Results (compared to Fiscal Q3 2021)

Revenue increased to $18.9 million for Fiscal Q3 2022 compared to $16.6 million for Fiscal Q3 2021. Aspen University’s (AU) revenue in the third quarter of fiscal year 2022, which includes the high LTV BSN Pre-Licensure program, accounted for 69%, or $13.0 million, versus 71% or $11.9 million, of consolidated revenue in the prior year period. United States University (USU) revenue for the quarter, which includes the high LTV MSN-FNP program, accounted for 31%, or $5.9 million versus 29%, or $4.8 million of consolidated revenue in the prior year period.

GAAP gross profit increased 6% to $9.2 million for Fiscal Q3 2022 compared to $8.7 million for Fiscal Q3 2021. Gross margin was 49% for Fiscal Q3 2022 compared to 52% for Fiscal Q3 2021. Gross margin in Fiscal Q3 2022 was impacted by higher instructional and marketing costs related to the new locations within the BSN Pre-Licensure program. AU gross margin was 50% of AU revenue for Fiscal Q3 2022 versus 54% in Fiscal Q3 2021, and USU gross margin was 52% of USU revenue for Fiscal Q3 2022 versus 53% in Fiscal Q3 2021.

Net loss and net loss per share were ($3.7) million and ($0.15), respectively, for Fiscal Q3 2022 compared to ($2.8) million and ($0.11), respectively, for Fiscal Q3 2021. AU generated net income of $0.9 million for Fiscal Q3 2022 versus $1.4 million in Fiscal Q3 2021, and USU generated net income of $0.3 million for each Fiscal Q3 2022 and Fiscal Q3 2021. AGI corporate incurred a net loss of ($5.0) million for Fiscal Q3 2022 as compared to ($4.5) million in the prior year period.

EBITDA was ($2.4) million and (13%) margin, respectively, for Fiscal Q3 2022 compared to EBITDA of ($2.2) million and (13%) margin, respectively, for Fiscal Q3 2021.

For Fiscal Q3 2022, AU generated EBITDA of $1.9 million and 15% margin as compared to $1.9 million or 16% margin in Fiscal Q3 2021. USU generated EBITDA of $0.4 million and 7% margin, as compared to $0.4 million or 8% margin in Fiscal Q3 2021. AGI corporate incurred EBITDA of ($4.8) million as compared to ($4.5) million in Fiscal Q3 2021.

Adjusted EBITDA was ($1.3) million and (7%) margin, respectively, for Fiscal Q3 2022 compared to Adjusted EBITDA of ($0.9) million and (5%) margin, respectively, for Fiscal Q3 2021.

For Fiscal Q3 2022, AU generated Adjusted EBITDA of $2.2 million and 17% margin, as compared to $2.5 million, or 21% margin, in Fiscal Q3 2021. USU generated Adjusted EBITDA of $0.6 million and 10% margin, as compared to $0.5 million, or 10% margin, in Fiscal Q3 2021. AGI corporate incurred Adjusted EBITDA of ($4.1) million as compared to ($3.8) million in Fiscal Q3 2021.

Operating Metrics

New student enrollments for the past five quarters are shown below:

		New Student Quarterly Enrollments
		Q3'21			Q4'21			Q1'22			Q2'22			Q3'22
Aspen University		1,593			1,593			1,601			1,750			1,301
USU		536			589			675			630			481
Total		2,129			2,182			2,276			2,380			1,782

New student enrollments, bookings and ARPU for Q3’22 compared to Q3’21 are shown below:

	Q3'21 Enrollments			Q3'21 Bookings 1				Q3'22 Enrollments			Q3'22 Bookings 1
				(in millions)							(in millions)
Aspen University	1,593			$	23.5			1,301			$	17.8
USU	536			$	9.6			481			$	8.6
Total	2,129			$	33.0			1,782			$	26.3
ARPU				$	15,513						$	14,785

_____________________
^{1 “Bookings” are defined by multiplying Lifetime Value (LTV) by new student enrollments for each operating unit. “Average Revenue Per Enrollment” (ARPU) is defined by dividing total Bookings by total new student enrollments for each operating unit.}

New student enrollments at AU decreased year-over-year by 18% due to the planned reduction of BSN Pre-Licensure enrollments in the Phoenix metro and the impact of COVID-19, specifically the effect that the Omicron variant surge has had among prospective RN students beginning in November 2021. New student enrollments at USU decreased by 10% year-over-year. RN student enrollments at USU were similarly impacted by COVID-19.

To provide context, the third quarter enrollment decrease of 16% year-over-year on a Company-wide basis was primarily a result of three factors:

• First, as previously disclosed, Aspen University reduced advertising spend in the Phoenix metro for the BSN pre-licensure program to a maintenance spend level through January, causing enrollments in that metro to drop by 51% year-over-year. The quarter was not affected by the temporary suspension of advertising and enrollments of new pre-licensure students in the Phoenix metro, which happened after the quarter closed.
• Second, enrollments at USU were down 10% year-over-year given the impact of the ongoing COVID-19 pandemic, as prospective post-licensure nursing students continue to delay their education goals on a short-term basis as they cared for COVID patients.
• Third, in addition to Aspen University also seeing a COVID effect among prospective nursing post-licensure students, Aspen’s 2.0 business plan called for a $1.3 million annual reduction of ad spend in fiscal 2022 in Aspen’s post-licensure Nursing + Other unit. In the third quarter this equated to a 14% drop in ad spend year-over-year. Consequently, given the drop in ad spend and the COVID effect, enrollments in the Aspen Nursing + Other unit dropped by 18% year-over-year.
  

In summary, excluding the 51% drop in enrollments in the Phoenix metro (BSN pre-licensure program) and the 18% drop in enrollments in Aspen University's Nursing + Other unit, total enrollments for the Company would have been down by approximately 1% year-over-year.

The chart below shows five quarters of active student body results. Active student body is comprised of active degree-seeking students, enrolled in a course at the end of the third quarter of fiscal year 2022 or are registered for an upcoming course.

A graph accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/9a608899-b65c-467c-9630-668840facf4c

AGI’s overall active degree-seeking student body (includes both Aspen University and USU) grew 2% year-over-year to 13,724 as of January 31, 2022 from 13,407 as of January 31, 2021 and students seeking nursing degrees were 11,889 or 87% of total active students at both universities. Of the 11,889 students seeking nursing degrees, 9,612 are RNs studying to earn an advanced degree, including 6,839 at Aspen University and 2,773 at USU, while the remaining 2,277 nursing students are enrolled in Aspen University’s BSN Pre-Licensure program in the Phoenix, Austin, Tampa, Nashville and Atlanta metros.

Conference Call

Aspen Group, Inc. will host a conference call to discuss its third quarter fiscal year 2022 results and business outlook on Tuesday, March 15, 2022, at 4:30 pm ET. Aspen Group, Inc. 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 9807158.

Subsequent to the call, a transcript of the audio cast will be available from the Company’s website at www.aspu.com. 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 9807158.

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 2022 and third quarter 2022 Financial Results Presentation published on the Company’s website at www.aspu.com, on the Presentations page under Company Info.

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 EBITDA, Adjusted EBITDA 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. 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 EBITDA as EBITDA excluding: (1) bad debt expense; (2) stock-based compensation; and (3) non-recurring charges. The following table presents a reconciliation of net loss to EBITDA and Adjusted EBITDA and of net income (loss) margin to the Adjusted EBITDA margin:

	Three Months Ended January 31,								Nine Months Ended January 31,
		2022				2021				2022				2021
Net loss	$	(3,733,997	)		$	(2,815,266	)		$	(7,457,143	)		$	(8,128,987	)
Interest expense, net		180,642				33,436				350,838				2,018,176
Taxes		231,610				10,460				388,520				45,090
Depreciation and amortization		883,536				535,273				2,480,179				1,552,254
EBITDA		(2,438,209	)			(2,236,097	)			(4,237,606	)			(4,513,467	)
Bad debt expense		350,000				670,000				1,050,000				1,702,000
Stock-based compensation		700,697				701,170				1,965,567				3,019,828
Non-recurring charges - Severance		—				—				19,665				44,000
Non-recurring (income) charges - Other		49,310				—				(345,056	)			375,437
Adjusted EBITDA	$	(1,338,202	)		$	(864,927	)		$	(1,547,430	)		$	627,798
Net loss Margin		(20)%				(17)%				(13)%				(17)%
Adjusted EBITDA Margin		(7)%				(5)%				(3)%				1%

The following tables present a reconciliation of net loss to EBITDA and Adjusted EBITDA and of net income (loss) margin to the Adjusted EBITDA margin by business unit:

	Three Months Ended January 31, 2022
	Consolidated				AGI Corporate				AU				USU
Net income (loss)	$	(3,733,997	)		$	(5,020,149	)		$	941,437			$	344,715
Interest expense, net		180,642				180,682				—				(40	)
Taxes		231,610				951				230,660				(1	)
Depreciation and amortization		883,536				47,536				738,172				97,828
EBITDA		(2,438,209	)			(4,790,980	)			1,910,269				442,502
Bad debt expense		350,000				—				225,000				125,000
Stock-based compensation		700,697				616,166				56,880				27,651
Non-recurring charges - Severance		—				—				—				—
Non-recurring charges - Other		49,310				49,310				—				—
Adjusted EBITDA	$	(1,338,202	)		$	(4,125,504	)		$	2,192,149			$	595,153
Net income (loss) Margin		(20)%			NM					7%				6%
Adjusted EBITDA Margin		(7)%			NM					17%				10%

^{________________________________
NM - Not meaningful}

	Three Months Ended January 31, 2021
	Consolidated				AGI Corporate				AU				USU
Net income (loss)	$	(2,815,266	)		$	(4,537,882	)		$	1,375,359			$	347,257
Interest expense, net		33,436				33,516				—				(80	)
Taxes		10,460				3,600				6,800				60
Depreciation and amortization		535,273				15,540				492,303				27,430
EBITDA		(2,236,097	)			(4,485,226	)			1,874,462				374,667
Bad debt expense		670,000				—				610,000				60,000
Stock-based compensation		701,170				692,244				(12,468	)			21,394
Non-recurring charges - Severance		—				—				—				—
Non-recurring charges - Other		—				—				—				—
Adjusted EBITDA	$	(864,927	)		$	(3,792,982	)		$	2,471,994			$	456,061
Net income (loss) Margin		(17)%			NM					12%				7%
Adjusted EBITDA Margin		(5)%			NM					21%				10%

	Nine Months Ended January 31, 2022
	Consolidated				AGI Corporate				AU				USU
Net income (loss)	$	(7,457,143	)		$	(14,537,849	)		$	4,605,707			$	2,474,999
Interest expense, net		350,838				353,193				(1,739	)			(616	)
Taxes		388,520				3,363				383,867				1,290
Depreciation and amortization		2,480,179				116,720				2,082,972				280,487
EBITDA		(4,237,606	)			(14,064,573	)			7,070,807				2,756,160
Bad debt expense		1,050,000				—				725,000				325,000
Stock-based compensation		1,965,567				1,732,412				149,773				83,382
Non-recurring charges - Severance		19,665				—				—				19,665
Non-recurring (income) charges - Other		(345,056	)			107,635				(452,691	)			—
Adjusted EBITDA	$	(1,547,430	)		$	(12,224,526	)		$	7,492,889			$	3,184,207
Net income (loss) Margin		(13)%			NM					12%				14%
Adjusted EBITDA Margin		(3)%			NM					19%				17%

	Nine Months Ended January 31, 2021
	Consolidated				AGI Corporate				AU				USU
Net income (loss)	$	(8,128,987	)		$	(15,929,868	)		$	5,892,892			$	1,907,989
Interest expense, net		2,018,176				2,018,258				—				(82	)
Taxes		45,090				14,250				30,580				260
Depreciation and amortization		1,552,254				42,023				1,424,030				86,201
EBITDA		(4,513,467	)			(13,855,337	)			7,347,502				1,994,368
Bad debt expense		1,702,000				—				1,522,000				180,000
Stock-based compensation		3,019,828				2,768,687				135,166				115,975
Non-recurring charges - Severance		44,000				44,000				—				—
Non-recurring charges - Other		375,437				375,437				—				—
Adjusted EBITDA	$	627,798			$	(10,667,213	)		$	9,004,668			$	2,290,343
Net income (loss) Margin		(17)%			NM					17%				14%
Adjusted EBITDA Margin		1%			NM					26%				16%

Definitions

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.

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

Average Revenue per Enrollment ("ARPU") – is defined by dividing total bookings by total enrollments.

Adjusted EBITDA Margin – is defined as Adjusted EBITDA divided by revenue. We believe Adjusted EBITDA margin is useful for management, analysts and investors as this measure allows for 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.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including the nursing shortage, our 2022 guidance, our liquidity, the impact of COVID-19 on our business including our RN to BSN program and our estimates as to Lifetime Value, bookings and ARPU. 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 of nursing students for the new programs, student attrition, national and local economic factors including whether COVID-19 will continue to have an adverse effect on the economy, uncertainties arising from the Russian invasion of Ukraine including its effect on the U.S. economy, supply chain issues and the labor market, competition from nursing schools in local markets, the competitive impact from the trend of non-profit universities using online education and consolidation among our competitors, and the impact of possible actions arising from the Arizona Board of Nursing investigation. Other risks are included in our filings with the SEC including our Form 10-K for the year ended April 30, 2021, as amended by the Form 10-Q for the fiscal quarter ended January 31, 2022. 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

GAAP Financial Statements

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

		January 31, 2022				April 30, 2021
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents		$	5,969,286			$	12,472,082
Restricted cash			1,433,397				1,193,997
Accounts receivable, net of allowance of $3,381,204 and $3,289,816, respectively			19,635,715				16,724,744
Prepaid expenses			1,375,628				1,077,831
Other current assets			31,032				68,529
Total current assets			28,445,058				31,537,183
Property and equipment:
Computer equipment and hardware			1,486,201				956,463
Furniture and fixtures			2,153,124				1,705,101
Leasehold improvements			7,179,896				5,729,324
Instructional equipment			656,409				421,039
Software			9,829,329				8,488,635
Construction in progress			900				247,767
			21,305,859				17,548,329
Less: accumulated depreciation and amortization			(7,533,571	)			(4,892,987	)
Total property and equipment, net			13,772,288				12,655,342
Goodwill			5,011,432				5,011,432
Intangible assets, net			7,907,075				7,908,360
Courseware, net			289,680				187,296
Accounts receivable, net of allowance of $— and $625,963, respectively			—				45,329
Long-term contractual accounts receivable			12,701,452				10,249,833
Deferred financing costs			88,393				18,056
Operating lease right of use assets, net			13,090,470				12,714,863
Deposits and other assets			523,898				479,212
Total assets		$	81,829,746			$	80,806,906

(Continued)

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

		January 31, 2022				April 30, 2021
		(Unaudited)
Liabilities and Stockholders’ Equity
Liabilities:
Current liabilities:
Accounts payable		$	1,806,656			$	1,466,488
Accrued expenses			2,079,249				2,040,896
Deferred revenue			6,182,781				6,825,014
Due to students			3,229,516				2,747,484
Operating lease obligations, current portion			2,106,981				2,029,821
Credit Facility			5,000,000				—
Other current liabilities			136,027				307,921
Total current liabilities			20,541,210				15,417,624
Operating lease obligations, less current portion			17,317,396				16,298,808
Total liabilities			37,858,606				31,716,432
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; 1,000,000 shares authorized,
0 issued and 0 outstanding at January 31, 2022 and April 30, 2021			—				—
Common stock, $0.001 par value; 40,000,000 shares authorized,
25,228,580 issued and 25,073,094 outstanding at January 31, 2022
25,066,297 issued and 24,910,811 outstanding at April 30, 2021			25,229				25,067
Additional paid-in capital			111,378,471				109,040,824
Treasury stock (155,486 at both January 31, 2022 and April 30, 2021)			(1,817,414	)			(1,817,414	)
Accumulated deficit			(65,615,146	)			(58,158,003	)
Total stockholders’ equity			43,971,140				49,090,474
Total liabilities and stockholders’ equity		$	81,829,746			$	80,806,906

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

		Three Months Ended January 31,								Nine Months Ended January 31,
			2022				2021				2022				2021
Revenue		$	18,944,798			$	16,624,837			$	57,316,004			$	48,761,444
Operating expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below)			9,275,419				7,559,951				26,658,188				20,732,254
General and administrative			11,771,487				10,644,438				34,359,276				30,723,349
Bad debt expense			350,000				670,000				1,050,000				1,702,000
Depreciation and amortization			883,536				535,273				2,480,179				1,552,254
Total operating expenses			22,280,442				19,409,662				64,547,643				54,709,857
Operating loss			(3,335,644	)			(2,784,825	)			(7,231,639	)			(5,948,413	)
Other income (expense):
Interest expense			(180,697	)			(33,539	)			(353,738	)			(2,018,664	)
Other income (expense), net			13,954				13,558				516,754				(116,820	)
Total other (expense) income, net			(166,743	)			(19,981	)			163,016				(2,135,484	)
Loss before income taxes			(3,502,387	)			(2,804,806	)			(7,068,623	)			(8,083,897	)
Income tax expense			231,610				10,460				388,520				45,090
Net loss		$	(3,733,997	)		$	(2,815,266	)		$	(7,457,143	)		$	(8,128,987	)
Net loss per share - basic and diluted		$	(0.15	)		$	(0.11	)		$	(0.30	)		$	(0.35	)
Weighted average number of common stock outstanding - basic and diluted			25,041,733				24,544,334				24,971,056				23,354,036

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Three Months Ended January 31, 2022 and 2021
(Unaudited)

		Common Stock					Additional Paid-In Capital				Treasury Stock				Accumulated Deficit				Total Stockholders’ Equity
		Shares		Amount
Balance at October 31, 2021		25,148,194		$	25,149		$	110,526,729			$	(1,817,414	)		$	(61,881,149	)		$	46,853,315
Stock-based compensation		—			—			700,697				—				—				700,697
Common stock issued for stock options exercised for cash		41,667			41			134,959				—				—				135,000
Common stock issued for vested restricted stock units		38,719			39			(39	)			—				—				—
Amortization of warrant based cost		—			—			16,125				—				—				16,125
Net loss		—			—			—				—				(3,733,997	)			(3,733,997	)
Balance at January 31, 2022		25,228,580		$	25,229		$	111,378,471			$	(1,817,414	)		$	(65,615,146	)		$	43,971,140
		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			2			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

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED)
Nine Months Ended January 31, 2022 and 2021
(Unaudited)

		Common Stock					Additional Paid-In Capital				Treasury Stock				Accumulated Deficit				Total Stockholders’ Equity
		Shares		Amount
Balance at April 30, 2021		25,066,297		$	25,067		$	109,040,824			$	(1,817,414	)		$	(58,158,003	)		$	49,090,474
Stock-based compensation		—			—			1,965,567				—				—				1,965,567
Common stock issued for stock options exercised for cash		58,419			58			190,976				—				—				191,034
Common stock issued for cashless stock options exercised		30,156			30			(30	)			—				—				—
Common stock issued for vested restricted stock units		73,708			74			(74	)			—				—				—
Amortization of warrant based cost		—			—			43,708				—				—				43,708
Warrants issued for deferred financing costs related to Credit Facility		—			—			137,500				—				—				137,500
Net loss		—			—			—				—				(7,457,143	)			(7,457,143	)
Balance at January 31, 2022		25,228,580		$	25,229		$	111,378,471			$	(1,817,414	)		$	(65,615,146	)		$	43,971,140
		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			2			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 at January 31, 2021		24,939,673		$	24,940		$	108,003,022			$	(1,817,414	)		$	(55,838,017	)		$	50,372,531

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

		Nine Months Ended January 31,
			2022				2021
Cash flows from operating activities:
Net loss		$	(7,457,143	)		$	(8,128,987	)
Adjustments to reconcile net loss to net cash used in operating activities:
Bad debt expense			1,050,000				1,702,000
Depreciation and amortization			2,480,179				1,552,254
Stock-based compensation			1,965,567				3,019,828
Amortization of warrant based cost			43,708				27,375
Amortization of debt discounts			—				1,550,854
Amortization of debt issue costs			18,056				156,029
Amortization of deferred financing costs			49,107				—
Modification charge for warrants exercised			—				25,966
Loss on asset disposition			36,445				—
Lease benefit			(96,450	)			—
Tenant improvement allowances received from landlords			816,591				—
Common stock issued for services			—				19,900
Changes in operating assets and liabilities:
Accounts receivable			(6,412,590	)			(6,493,238	)
Prepaid expenses			(297,797	)			(267,526	)
Other receivables			—				23,097
Other current assets			37,498				(1,205,083	)
Accounts receivable, other			45,329				—
Deposits and other assets			(44,686	)			(185,599	)
Accounts payable			340,168				(349,882	)
Accrued expenses			38,353				1,756,102
Due to students			482,032				(128,154	)
Deferred revenue			(642,233	)			1,887,377
Other current liabilities			(171,894	)			(238,032	)
Net cash used in operating activities			(7,719,760	)			(5,275,719	)
Cash flows from investing activities:
Purchases of courseware and accreditation			(161,262	)			(31,330	)
Purchases of property and equipment			(3,573,408	)			(2,877,758	)
Net cash used in investing activities			(3,734,670	)			(2,909,088	)
Cash flows from financing activities:
Borrowings under the Credit Facility			5,000,000				—
Proceeds from stock options exercised			191,034				2,578,700
Proceeds from warrants exercised			—				1,081,792
Net cash provided by financing activities			5,191,034				3,660,492

(Continued)

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

		Nine Months Ended January 31,
			2022				2021
Net decrease in cash, cash equivalents and restricted cash		$	(6,263,396	)		$	(4,524,315	)
Cash, cash equivalents and restricted cash at beginning of period			13,666,079				17,906,765
Cash, cash equivalents and restricted cash at end of period		$	7,402,683			$	13,382,450
Supplemental disclosure cash flow information:
Cash paid for interest		$	258,630			$	310,958
Cash paid for income taxes		$	13,520			$	49,008
Supplemental disclosure of non-cash investing and financing activities:
Common stock issued for conversion of Convertible Notes		$	—			$	10,000,000
Warrants issued as part of Credit Facility		$	137,500			$	—

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, 2022				April 30, 2021
Cash and cash equivalents		$	5,969,286			$	12,472,082
Restricted cash			1,433,397				1,193,997
Total cash, cash equivalents and restricted cash		$	7,402,683			$	13,666,079

 

FAQ

What was Aspen Group's revenue for Q3 FY 2022?

Aspen Group reported a revenue of $18.9 million for Q3 FY 2022.

What is the revised revenue outlook for Aspen Group in FY 2022?

The revised revenue outlook for FY 2022 is between $75.5 million and $77.5 million.

How much was the net loss reported by Aspen Group for Q3 FY 2022?

Aspen Group reported a net loss of $3.7 million for Q3 FY 2022.

What percentage of revenue did the BSN Pre-Licensure program contribute?

Business units with the highest Lifetime Value programs contributed 56% of revenue.