NEW YORK, March 15, 2018 (GLOBE NEWSWIRE) -- Aspen Group, Inc. (Nasdaq:ASPU), a post-secondary education company, today announced financial results for its 2018 third quarter ended January 31, 2018, highlighted by revenue of $5.7 million, and active student body growth at Aspen University (AU) of 49% year-over-year and 110% active student body growth at United States University (USU) since May, 2017 (9-month period). Both Aspen University and United States University ended the quarter with nursing students representing 73% of their active student body.

Michael Mathews, Chairman & CEO of Aspen Group, commented, “We’re pleased to report that already 46% of USU’s total active students have selected to pay for their education through a monthly payment method. This immediate uptake, particularly from Nurse Practitioner students at USU, gives us great confidence that USU will follow in AU’s footsteps with the overwhelming majority of students paying month-to-month.”

Fiscal Q3 2018 Financial Highlights:*

  • Revenue totaled $5,701,958, an increase of 53% as compared to the prior fiscal year;
  • GAAP Gross Profit totaled $2,900,633, a 29% increase as compared to the prior fiscal year;
  • Net Loss applicable to shareholders of ($2,147,945), as compared to Net Income of $7,377 in the prior fiscal year; Diluted Net Loss per share was $(0.15), as compared to $0.00 in the prior fiscal year;
  • EBITDA, a non-GAAP financial measure, totaled $(1,588,565);
  • Adjusted EBITDA, a non-GAAP financial measure, totaled $(597,305);

Fiscal 2018 Third Quarter Financial and Operational Highlights:*

  Aspen University United States University
  Q3 FY’2018 Q3 FY’2018
New Student Enrollments 1,164 103*
Active Student Body 6,066 446
-College of Nursing Students 4,401 326
Monthly Payment Method Students 4,194 204

For the third quarter, revenues increased 53% to $5,701,958 as compared to $3,735,626 for the same period the prior year. GAAP Gross Profit increased to $2,900,633 or 51% Gross Margin. Net loss applicable to shareholders was ($2,147,945) or Diluted Net Loss per share of $(0.15). EBITDA, a non-GAAP financial measure, was $(1,588,565) or (28%). Adjusted EBITDA, a non-GAAP financial measure, was $(597,305) or (10%).

One-time expenses related to the acquisition of United States University totaled $610,219, which represented an increase in the company’s EPS loss by an additional $(0.04).

Aspen University increased its internet advertising spend rate sequentially by approximately $167,000 or 17%, primarily the result of a spending increase at the Doctoral level during the month of January. Additionally, the company launched a 9-person outside sales force in January, initially targeting the San Diego, Los Angeles, Phoenix and NY Metropolitan areas. These two sales & marketing investment initiatives are designed to drive incremental enrollment growth in the upcoming 2019 fiscal year, consequently the company’s gross margin and marketing efficiency ratios are expected to moderately decline short-term as a result.

*All comparatives include USU financial results for the two month period from December 1, 2017 – January 31, 2018.

Excluding the $610,219 one-time USU acquisition expenses, G&A increased sequentially by $900,750. The acquisition of United States University accounted for over three-quarters of the G&A increase, as the company’s non-faculty full-time staff rose from 110 to 142 employees. The majority of the remaining increase was a one-time expense of legal fees related to the HEMG NJ bankruptcy proceeding in which the company is a creditor. On a year-over-year basis, G&A rose by 119%, from $2,133,074 to $4,677,359.

The following table presents gross profit calculated in accordance with GAAP:

  For the Quarters Ended
  January 31,
  2018*  2017
Revenues $5,701,958  $3,735,626
Costs of revenues (exclusive of amortization shown separately)  2,665,664   1,359,131
Amortization expenses excluded from cost of revenues  135,661    119,577
GAAP gross profit $2,900,633  $2,256,918

The following table presents a reconciliation of EBITDA and Adjusted EBITDA to Net loss, a GAAP financial measure:

  For the Quarters Ended 
  January 31, 
  2018*  2017 
Net income (loss) $(2,147,945) $7,377 
Interest expense, net of interest income  211,486   78,317 
Depreciation & amortization  347,894   132,727 
EBITDA (loss)  (1,588,565)  218,421 
Bad debt expense  132,644   (25,680)
USU Acquisition expenses  610,219    
Non-recurring charges  85,853   146,809 
Stock-based compensation  162,544   96,498 
Adjusted EBITDA (Loss) $(597,305) $436,048 

Fiscal Year 2018 Fourth Quarter Business Update:

The company expects to have approximately 70 enrollment advisors employed by early-April, approximately one month ahead of its original fiscal year-end target date. Consequently, the company intends to increase its internet marketing monthly spend rate to over $600,000 beginning with the month of April.

Revenues for fiscal year 2018 fourth quarter are expected to increase by at least $1 million sequentially, or over $6.7 million.

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, operating income, and cash flow from operating activities, liquidity or any other financial measures. They may not be indicative of the historical operating results of Aspen Group 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 the following 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 comparison.  Our management recognizes that the non-GAAP financial measures have inherent limitations because of the excluded items described above.

Aspen Group defines Adjusted EBITDA as earnings (or loss) from continuing operations before the items in the table above. Aspen Group excludes these expenses because they are non-cash or non-recurring in nature.

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 Aspen Group 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.

Conference Call:

Aspen Group, Inc. will host a conference call to discuss its fiscal year 2018 third quarter (ending January 31, 2018) financial results and business outlook on Thursday, March 15, 2018, at 4:30 p.m. (ET).  The conference call can be accessed by dialing toll-free (844) 452-6823 (U.S.) or (731) 256-5216 (international), passcode 6565836. Subsequent to the call, a transcript of the audiocast will be available from the Company’s website at There will also be a 7 day dial-in replay which can be accessed by dialing toll-free (855) 859-2056 or (404) 537-3406 (international), passcode 6565836.

About Aspen Group, Inc.:

Aspen Group, Inc. is a publicly held, for-profit post-secondary education company headquartered in New York, NY.  It owns two accredited universities, Aspen University and United States University. Aspen Group’s vision is to make college affordable again in America.

Aspen University’s mission is to offer any motivated college-worthy student the opportunity to receive a high quality, responsibly priced distance-learning education for the purpose of achieving sustainable economic and social benefits for themselves and their families. Aspen University is dedicated to providing the highest quality education experiences taught by top-tier faculty - 54% of Aspen University’s faculty hold doctoral degrees. To learn more about Aspen University, visit

United States University began its institutional history in 1997 as InterAmerican College. In 2010, the school was renamed to United States University and recently moved its campus into the heart of San Diego. United States University is regionally accredited by the Accrediting Commission for Senior Colleges and Universities of the Western Association of Schools and Colleges, offering bachelor and master level degree programs in nursing, education, health science, and business & management. To learn more about United States University, visit

Forward-Looking Statements:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including USU students electing monthly payment plans as have AU students, the expected short-term impact of internet and outside sales expenses and future marketing spend rate and fourth quarter anticipated revenues. 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 unexpected difficulties integrating United States University, a change in the effectiveness of our marketing and changes in the economy. Further information on our risk factors is contained in our filings with the SEC, including our Form 10-K for the year ended April 30, 2017. 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.

Company Contact:

Aspen Group, Inc.
Michael Mathews, CEO

  January 31,  April 30, 
  2018  2017 
Current assets:      
Cash and cash equivalents $3,803,080  $2,756,217 
Restricted cash  190,506    
Accounts receivable, net of allowance of $544,492 and $328,864, respectively  8,592,958   4,434,862 
Prepaid expenses  288,640   133,531 
Promissory note receivable     900,000 
Other receivables  233,862   81,464 
Accrued interest receivable     8,000 
Total current assets  13,109,046   8,314,074 
Property and equipment:        
Call center equipment  96,305   53,748 
Computer and office equipment  130,137   103,649 
Furniture and fixtures  712,209   255,984 
Software  2,590,297   2,131,344 
   3,528,948   2,544,725 
Less accumulated depreciation and amortization  (1,161,030)  (1,090,010)
Total property and equipment, net  2,367,918   1,454,715 
Goodwill  5,011,432    
Intangible assets, net  9,916,667    
Courseware, net  137,557   145,477 
Accounts receivable, secured - related party, net of allowance of $625,963, and $625,963, respectively  45,329   45,329 
Long term contractual receivable  935,878   657,542 
Other assets  585,206   56,417 
Total assets $32,109,033  $10,673,554 

  January 31,  April 30, 
  2018  2017 
Liabilities and Stockholders’ Equity        
Current liabilities:        
Accounts payable $1,273,990  $756,701 
Accrued expenses  596,633   262,911 
Deferred revenue  4,156,550   1,354,989 
Refunds due students  730,722   310,576 
Deferred rent, current portion  7,429   11,200 
Convertible notes payable- related party, current portion  1,000,000    
Convertible notes payable, current portion  50,000   50,000 
Other current liabilities  186,134    
Total current liabilities  8,001,458   2,746,377 
Convertible note payable - related party  1,000,000    
Senior secured term loan, net of discount  6,769,932    
Warrant Liability     52,500 
Deferred rent  60,295   34,437 
Total liabilities  15,831,685   2,833,314 
Commitments and contingencies       
Stockholders’ equity:        
Common stock, $0.001 par value; 250,000,000 shares authorized,        
15,072,332 issued and 15,055,665 outstanding at January 31, 2018        
13,504,012 issued and 13,487,345 outstanding at April 30, 2017  15,072   13,504 
Additional paid-in capital  45,439,538   33,607,423 
Treasury stock (16,667 shares)  (70,000)  (70,000)
Accumulated deficit  (29,107,262)  (25,710,687)
Total stockholders’ equity  16,277,348   7,840,240 
Total liabilities and stockholders’ equity $32,109,033  $10,673,554 

  For the  For the 
  Three Months Ended  Nine Months Ended 
  January 31,  January 31, 
  2018  2017  2018  2017 
Revenues $5,701,958  $3,735,626  $14,796,483  $9,957,467 
Operating expenses                
Cost of revenues (exclusive of depreciation and amortization shown separately below)  2,665,664   1,359,131   6,282,814   3,490,046 
General and administrative  4,677,359    2,133,074   10,975,085   6,228,554 
Program review settlement expense     25,000      25,000 
Depreciation and amortization  347,894   132,727   631,969   422,782 
Total operating expenses  7,690,917   3,649,932   17,889,868   10,166,382 
Operating (loss) income  (1,988,959)  85,694   (3,093,385)  (208,915)
Other income (expense):                
Other income  46,179   1,684   88,067   3,047 
Gain on extinguishment of warrant liability  52,500      52,500    
Interest expense  (257,665)  (80,001)  (443,757)  (175,662)
Total other expense, net  (158,986)  (78,317)  (303,190)  (172,615)
(Loss) income before income taxes  (2,147,945)  7,377   (3,396,575)  (381,530)
Income tax expense (benefit)            
Net (loss) income $(2,147,945) $7,377  $(3,396,575) $(381,530)
Net (loss) income per share allocable to common stockholders - basic $(0.15) $0.00  $(0.25) $(0.03)
Net (loss) income per share allocable to common stockholders - diluted $(0.15) $0.00  $(0.25) $(0.03)
Weighted average number of common shares outstanding: basic  14,491,634   11,467,345   13,862,992   11,419,270 
Weighted average number of common shares outstanding: diluted  14,491,634   13,040,970   13,862,992   11,419,270 

        Additional        Total 
  Common Stock  Paid-In  Treasury  Accumulated  Stockholders' 
  Shares  Amount  Capital  Stock  Deficit  Equity 
Balance at April 30, 2017  13,504,012  $13,504  $33,607,423  $(70,000) $(25,710,687) $7,840,240 
Fees associated with equity raise        (14,033)        (14,033)
Restricted stock issued for services  10,000    10    88,690          88,700  
Stock-based compensation        466,468         466,468 
Common stock issued for acquisition  1,203,209   1,203   10,214,041         10,215,244 
Common stock issued for cashless warrant exercises  162,072    162    (162 )         
Common stock issued for warrants exercised for cash  79,442    79    143,410          143,489  
Common stock issued for stock options exercised  113,597    114    455,273          455,387  
Warrants issued with senior secured term loan        478,428         478,428 
Net loss, for the Nine months ended January 31, 2018              (3,396,575)  (3,396,575)
Balance at January 31, 2018  15,072,332  $15,072   $45,439,538   $(70,000) $(29,107,262 ) $16,277,348  

  For the 
  Nine months ended 
  January 31, 
  2018  2017 
Cash flows from operating activities:      
Net loss $(3,396,575 ) $(381,530)
Adjustments to reconcile net loss to net cash used in operating activities:        
Bad debt expense (recovery)  298,144   (25,680)
Gain on extinguishment of warrant liability  (52,500)   
Depreciation and amortization  631,969   422,782 
Loss on asset disposal  27,590    
Stock-based compensation  466,468   253,833 
Amortization of debt discounts  99,726   15,625 
Amortization of prepaid shares for services  37,039   52,500 
Warrant buyback expense     206,000 
Changes in operating assets and liabilities:         
Accounts receivable  (4,534,118)  (2,331,140)
Prepaid expenses  (59,451)  28,715 
Accrued interest receivable  (45,400)   
Other receivables  (152,398)   
Other assets  (528,789)  (25,241)
Accounts payable  366,044   875,110 
Accrued expenses  218,476   105,111 
Deferred rent  22,087   17,318 
Refunds due students  420,146   124,912 
Deferred revenue  2,340,461   562,643 
Other liabilities  186,134    
Net cash used in operating activities  (3,654,947)  (99,042)
Cash flows from investing activities:        
Cash paid in asset acquisition  (2,589,719)   
Proceeds from promissory note interest receivable  53,400    
Increase in restricted cash  (190,506)   
Purchases of courseware  (33,369)  (6,550)
Purchases of property and equipment  (1,171,473)  (565,306)
Proceeds from promissory note receivable  900,000    
Net cash used in investing activities  (3,031,667)  (571,856)
Cash flows from financing activities:        
Warrant Buyback     (400,000)
Borrowing of bank line of credit     247,000 
Payments for bank line of credit     (248,783)
Borrowing of third party line of credit     1,250,000 
Third party line of credit financing costs     (60,000)
Proceeds of warrant and stock options exercised  598,876    
Offering costs paid on debt financing  (351,366)   
Disbursements for equity offering costs  (14,033)  (4,017)
Proceeds from senior secured term loan  7,500,000    
Net cash provided by financing activities  7,733,477   784,200 
Net increase in cash  1,046,863   113,302 
Cash at beginning of period  2,756,217   783,796 
Cash at end of period $3,803,080  $897,098 

  For the 
  Nine months ended 
  January 31, 
  2018  2017 
Supplemental disclosure of cash flow information:        
Cash paid for interest $316,781  $145,105 
Cash paid for income taxes $  $ 
Supplemental disclosure of non-cash investing and financing activities        
Warrants issued as part of senior secured loan $478,428  $ 
Assets acquired net of liabilities assumed for non-cash consideration $12,215,244  $ 
Common stock issued for services $  $62,002 
Warrant derivative liability $  $52,500