aspu-20210731

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from ___________ to ___________

Commission file number 001-38175

ASPEN GROUP, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

27-1933597

State or Other Jurisdiction of Incorporation or Organization

I.R.S. Employer Identification No.

276 Fifth Avenue, Suite 505, New York, New York

10001

Address of Principal Executive Offices

Zip Code

(646) 448-5144

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001	ASPU	The Nasdaq Stock Market (The Nasdaq Global Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


			Large accelerated filer ¨			Accelerated filer ¨
			Non-accelerated filer ☑			Smaller reporting company ☑
			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No þ


Class						Outstanding as of September 10, 2021
Common Stock, $0.001 par value per share						24,931,565 shares

Table of Contents

TABLE OF CONTENTS


		Page Number
	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements.	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations (Unaudited)	3
	Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)	4
	Consolidated Statements of Cash Flows (Unaudited)	5
	Condensed Notes to Consolidated Financial Statements (Unaudited)	7
	Note 1. Nature of Operations	7
	Note 2. Significant Accounting Policies	8
	Note 3. Property and Equipment	10
	Note 4. Courseware and Accreditation	10
	Note 5. Secured Note and Accounts Receivable	11
	Note 6. Debt	11
	Note 7. Stockholders' Equity	11
	Note 8. Revenue	15
	Note 9. Leases	16
	Note 10. Income Taxes	17
	Note 11. Commitments and Contingencies	18
	Note 12. Subsequent Events	20

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	33

Item 4.	Controls and Procedures.	33

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	34

Item 1A.	Risk Factors.	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	34

Item 3.	Defaults Upon Senior Securities.	35

Item 4.	Mine Safety Disclosures.	35

Item 5.	Other Information.	35

Item 6.	Exhibits.	35

SIGNATURES		37

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ASPEN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	July 31, 2021		April 30, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	6,554,423	$	8,513,290
Restricted cash	3,722,831		5,152,789
Accounts receivable, net of allowance of $3,272,977 and $3,289,816, respectively	17,190,238		16,724,744
Prepaid expenses	914,216		1,077,831
Other current assets	13,890		68,529
Total current assets	28,395,598		31,537,183

Property and equipment:
Computer equipment and hardware	1,193,278		956,463
Furniture and fixtures	1,793,686		1,705,101
Leasehold improvements	6,182,239		5,729,324
Instructional equipment	491,597		421,039
Software	8,951,241		8,488,635
Construction in progress	88,367		247,767
	18,700,408		17,548,329
Less: accumulated depreciation and amortization	(5,962,034)		(4,892,987)
Total property and equipment, net	12,738,374		12,655,342
Goodwill	5,011,432		5,011,432
Intangible assets, net	7,907,932		7,908,360
Courseware, net	303,020		187,296
Accounts receivable, net of allowance of $— and $625,963, respectively	—		45,329
Long term contractual accounts receivable	11,313,657		10,249,833
Debt issue cost, net	9,722		18,056
Operating lease right of use assets, net	12,242,456		12,714,863
Deposits and other assets	468,361		479,212
Total assets	$	78,390,552	$	80,806,906

(Continued)

The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.

Table of Contents

ASPEN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)


	July 31, 2021		April 30, 2021
	(Unaudited)
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,627,731	$	1,466,488
Accrued expenses	2,361,271		2,040,896
Deferred revenue	4,691,087		6,825,014
Due to students	2,905,192		2,747,484
Operating lease obligations, current portion	2,086,076		2,029,821
Other current liabilities	57,847		307,921
Total current liabilities	13,729,204		15,417,624

Operating lease obligations, less current portion	15,865,044		16,298,808
Total liabilities	29,594,248		31,716,432

Commitments and contingencies – see Note 11

Stockholders’ equity:
Preferred stock, $0.001 par value; 1,000,000 shares authorized,
0 issued and 0 outstanding at July 31, 2021 and April 30, 2021	—		—
Common stock, $0.001 par value; 40,000,000 shares authorized,
25,087,051 issued and 24,931,565 outstanding at July 31, 2021
25,066,297 issued and 24,910,811 outstanding at April 30, 2021	25,088		25,067
Additional paid-in capital	109,617,521		109,040,824
Treasury stock (155,486 at both July 31, 2021 and April 30, 2021)	(1,817,414)		(1,817,414)
Accumulated deficit	(59,028,891)		(58,158,003)
Total stockholders’ equity	48,796,304		49,090,474
Total liabilities and stockholders’ equity	$	78,390,552	$	80,806,906

The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.

Table of Contents

ASPEN GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended July 31,
	2021		2020
Revenue	$	19,430,995	$	15,165,562

Operating expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below)	8,593,568		5,847,523
General and administrative	10,946,477		8,793,756
Bad debt expense	350,000		400,000
Depreciation and amortization	779,409		490,624
Total operating expenses	20,669,454		15,531,903

Operating loss	(1,238,459)		(366,341)

Other income (expense):
Interest expense	(33,539)		(455,457)
Other income (expense), net	552,120		(123,298)
Total other income (expense), net	518,581		(578,755)

Loss before income taxes	(719,878)		(945,096)

Income tax expense (benefit)	151,010		(1,900)

Net loss	$	(

SEC Form 10-Q filed by Aspen Group Inc.