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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 January 31, 2022
or | | | | | |
☐ | 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 March 11, 2022 |
Common Stock, $0.001 par value per share | | 25,190,410 shares |
PART I. FINANCIAL INFORMATION
ITEM 1. 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)
The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.
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 – see Note 11 | | | |
| | | |
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 | |
The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.
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 | |
The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.
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 | |
The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.
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 | |
The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.
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)
The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.
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 | |
The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2022
(Unaudited)
Note 1. Nature of Operations
Overview
Ë¿¹ÏÊÓƵ. ("AGI") is an education technology holding company. AGI has two subsidiaries, Aspen University Inc. ("Aspen University"), organized in 1987, and United States University Inc. ("United States University" or "USU").
All references to the “Company”, “AGI”, “Aspen Group”, “we”, “our” and “us” refer to Ë¿¹ÏÊÓƵ., unless the context otherwise indicates.
AGI leverages its education technology infrastructure and expertise to allow its two universities, Aspen University and United States University, to deliver on the vision of making college affordable again. Because we believe higher education should be a catalyst to our students’ long-term economic success, we exert financial prudence by offering affordable tuition that is one of the greatest values in higher education. AGI’s primary focus relative to future growth is to target the high growth nursing profession.
Since 1993, Aspen University has been nationally accredited by the Distance Education Accrediting Council (“DEAC”), an institutional accrediting agency recognized by the United States Department of Education (the “DOE”), through January 2024.
Since 2009, USU has been institutionally accredited by WASC Senior College and University Commission. (“WSCUC”).
Both universities are qualified to participate under the Higher Education Act of 1965, as amended (HEA) and the Federal student financial assistance programs (Title IV, HEA programs). USU has a provisional certification resulting from the ownership change of control in connection with the acquisition by AGI on December 1, 2017.
COVID-19 Update
Nursing students represented 87% or 11,889 of the Company’s total student body of 13,724 students 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). Therefore, these 9,612 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 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.
We cannot be certain what impact future COVID-19 variants will have on the Company’s results as we progress through the remainder of fiscal 2022.
Basis of Presentation
Interim Financial Statements
The interim consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments and reclassifications and non-recurring adjustments) necessary to present fairly our results of operations for the three and nine months ended January 31, 2022 and 2021, our cash flows for the nine months ended January 31, 2022 and 2021, and our financial position as of January 31, 2022 have been made.
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2022
(Unaudited)
The results of operations for such interim periods are not necessarily indicative of the operating results to be expected for the full year.
Certain information and disclosures normally included in the notes to the annual consolidated financial statements have been condensed or omitted from these interim consolidated financial statements. Accordingly, these interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended April 30, 2021 as filed with the SEC on July 13, 2021. The April 30, 2021 consolidated balance sheet is derived from those statements.
Note 2. Significant Accounting Policies
Basis of Presentation and Consolidation
The Company prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles ("GAAP").
The consolidated financial statements include the accounts of AGI and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
A full listing of our significant accounting policies is described in Note 2. Summary of Significant Accounting Policies of our Annual Report on Form 10-K for the fiscal year ended April 30, 2021 as filed with the SEC on July 13, 2021.
Accounting Estimates
Management of the Company is required to make certain estimates, judgments and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates, judgments and assumptions impact the reported amounts of assets, liabilities, revenue and expenses and the related disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Significant estimates in the accompanying consolidated financial statements include the allowance for doubtful accounts, the valuation of lease liabilities and the carrying value of the related right-of-use ("ROU") assets, depreciable lives of property and equipment, amortization periods and valuation of courseware, intangibles and software development costs, valuation of goodwill, valuation of loss contingencies, valuation of stock-based compensation and the valuation allowance on deferred tax assets.
Cash, Cash Equivalents, and Restricted Cash
For the purposes of the consolidated statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Restricted cash as of January 31, 2022 of $1,433,397 consists of $1,173,525 which is collateral for letters of credit for the Aspen University and USU facility operating leases, $9,872 which is collateral for a letter of credit for USU required to be posted based on the level of Title IV funding in connection with USU's most recent Compliance Audit, and a $250,000 compensating balance under a secured credit line.
Restricted cash as of April 30, 2021 of $1,193,997 consisted of $934,125 which is collateral for letters of credit for the Aspen University and USU facility operating leases, $9,872 which is collateral for a letter of credit for USU required to be posted based on the level of Title IV funding in connection with USU's most recent Compliance Audit, and a $250,000 compensating balance under a secured credit line.
Concentration of Credit Risk
The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits of $250,000 per financial institution. The Company has not experienced any losses in such accounts from inception through
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2022
(Unaudited)
January 31, 2022. As of January 31, 2022 and April 30, 2021, the Company maintained deposits exceeding federally insured limits by approximately $7,549,724 and $13,005,537, respectively, held in two separate institutions.
Revenue Recognition and Deferred Revenue
The Company follows Accounting Standards Codification 606 (ASC 606). ASC 606 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASC also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer purchase orders, including significant judgments.
Revenue consists primarily of tuition and course fees derived from courses taught by the Company online and in-person as well as from related educational resources and services that the Company provides to its students. Under ASC 606, tuition and course fee revenue is recognized pro-rata over the applicable period of instruction and are not considered separate performance obligations. Non-tuition related revenue and fees are recognized as services are provided or when the goods are received by the student. (See Note 8. Revenue) Students may receive discounts, scholarships, or refunds, which gives rise to variable consideration. The amounts of discounts or scholarships are applied to individual student accounts when such amounts are awarded. Therefore, the tuition is reduced directly by these discounts or scholarships from the amount of the standard tuition rate charged.
Deferred revenue represents the amount of tuition, fees, and other student payments received in excess of the portion recognized as revenue and it is included in current liabilities in the accompanying consolidated balance sheets. Other revenue may be recognized as sales occur or services are performed.
Net Loss Per Share
Net loss per share is based on the weighted average number of shares of common stock outstanding during each period.
Options, warrants, restricted stock units ("RSUs") and unvested restricted stock are not included in the computation of diluted net loss per share because the effects would have been anti-dilutive. These common stock equivalents are only included in the calculation of diluted earnings per share of common stock when their effect is dilutive. See Note 7. Stockholders’ Equity.
Segment Information
The Company operates in one reportable segment as a single educational delivery operation using a core infrastructure that serves the curriculum and educational delivery needs of its online and campus students regardless of geography. The Company's chief operating decision makers, its Chief Executive Officer, Chief Operating Officer and Chief Academic Officer, manage the Company's operations as a whole.
Recent Accounting Pronouncement Not Yet Adopted
ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which significantly changes how entities will measure credit losses for most financial assets, including accounts receivable. ASU No. 2016-13 will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. On November 15, 2019, the FASB delayed the effective date of Topic 326 for certain small public companies and other private companies until fiscal years beginning after December 15, 2022 for SEC filers that are eligible to be smaller reporting companies under the SEC’s definition, as well as private companies and not-for-profit entities. The Company is currently evaluating the new guidance and has not yet determined whether the adoption of the new standard will have a material impact on its consolidated financial statements or the method of adoption.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation.
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2022
(Unaudited)
The Company has concluded that based on industry practices, the preferred presentation for cash received in advance for unearned tuition and stipends should be reclassified from "restricted cash" to "cash and cash equivalents." The cash balance of $3,958,793 for funds held for students for unbilled educational services that were received from Title IV and non-Title IV programs at April 30, 2021, which was previously included in "restricted cash" in the accompanying consolidated balance sheet, was reclassified to "cash and cash equivalents" to align with the current year presentation. There is no impact to total current assets included in accompanying consolidated balance sheet at April 30, 2021. The restricted cash balance at April 30, 2021, now includes letters of credit and a compensating balance under a secured credit line of $1,193,997.
Note 3. Property and Equipment
As property and equipment reach the end of their useful lives, the fully expired assets are written off against the associated accumulated depreciation and amortization.
When assets are disposed of before reaching the end of their useful lives both the recorded cost of the fixed asset and the corresponding amount of accumulated depreciation is reversed. Any remaining difference between the two is recognized as either other income or expense.
Software consisted of the following: | | | | | | | | | | | |
| January 31, 2022 | | April 30, 2021 |
Software | $ | 9,829,329 | | | $ | 8,488,635 | |
Accumulated amortization | (4,727,413) | | | (3,444,325) | |
Software, net | $ | 5,101,916 | | | $ | 5,044,310 | |
Depreciation and amortization expense for property and equipment and software is summarized below: | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended January 31, | | Nine Months Ended January 31, |
| 2022 | | 2021 | | 2022 | | 2021 |
Depreciation and amortization expense: | | | | | | | |
Property and equipment, excluding software | $ | 418,081 | | | $ | 158,110 | | | $ | 1,136,929 | | | $ | 490,868 | |
Software | $ | 443,284 | | | $ | 366,908 | | | $ | 1,283,088 | | | $ | 1,028,668 | |
Note 4. Courseware and Accreditation
As courseware and accreditation reach the end of their useful life, they are written off against the accumulated amortization. There was no expense impact for such write-offs for the three and nine months ended January 31, 2022 and 2021.
Courseware and accreditation consisted of the following: | | | | | | | | | | | |
| January 31, 2022 | | April 30, 2021 |
Courseware | $ | 569,483 | | | $ | 408,222 | |
Accreditation | 59,350 | | | 59,350 | |
| 628,833 | | | 467,572 | |
Accumulated amortization | (339,153) | | | (280,276) | |
Courseware and accreditation, net | $ | 289,680 | | | $ | 187,296 | |
Amortization expense for courseware and accreditation is summarized below: | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended January 31, | | Nine Months Ended January 31, |
| 2022 | | 2021 | | 2022 | | 2021 |
Amortization expense | $ | 21,744 | | | $ | 10,255 | | | $ | 58,877 | | | $ | 32,718 | |
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2022
(Unaudited)
Amortization expense is included in "Depreciation and amortization" in the unaudited consolidated statements of operations.
Note 5. Secured Note and Accounts Receivable
On March 30, 2008 and December 1, 2008, Aspen University sold courseware pursuant to marketing agreements to Higher Education Management Group, Inc. (“HEMG”), which was then a related party and principal stockholder of the Company. As discussed in Note 11. Commitments and Contingencies, the Company and Aspen University sued HEMG seeking to recover sums due under the agreements. Ultimately, the Company and Aspen University obtained a favorable default judgment, and as a result received a distribution from the bankruptcy trustee court of $498,120, which was included in "other (expense) income, net" in the unaudited consolidated statements of operations during the nine months ended January 31, 2022. Due to the bankruptcy of HEMG, the Company also wrote off a net receivable of $45,329 in the same period.
Note 6. Debt
Credit Facility
On November 5, 2018, the Company entered into a loan agreement (the “Credit Facility Agreement”) with the Leon and Toby Cooperman Family Foundation (the “Foundation”). The Credit Facility Agreement provides for a $5,000,000 revolving credit facility (the “Credit Facility”) evidenced by a revolving promissory note (the “Revolving Note”). Borrowings under the Credit Facility Agreement bear interest at 12% per annum. Interest payments are due monthly through the term of the Credit Facility.
On August 31, 2021, the Company extended the Credit Facility Agreement with the Foundation by one year from November 4, 2021 to November 4, 2022. In conjunction with the extension of the Credit Facility, the Company drew down funds of $5,000,000.
Additionally, on August 31, 2021, the Company issued to the Foundation warrants, as an extension fee, to purchase 50,000 shares of the Company’s common stock exercisable for five years from the date of issuance at the exercise price of $5.85 per share. The fair value of the warrants is $137,500 and is being amortized to interest expense over the 14-month line of credit period. The fair value of the warrants are treated as deferred financing costs in the accompanying consolidated balance sheets at January 31, 2022 to be amortized over the term of the Credit Facility. Total unamortized costs at January 31, 2022 were $88,393. See Note 7. Stockholders’ Equity for additional information related to these warrants.
At January 31, 2022 and April 30, 2021, there were $5,000,000 and no outstanding borrowings, respectively, under the Credit Facility. For information on a recent amendment to the Credit Facility and related financings, see Note 12. Subsequent Events.
The Credit Facility Agreement contains customary representations and warranties and events of default. Pursuant to the Loan Agreement and the Revolving Note, all future or contemporaneous indebtedness incurred by the Company, other than indebtedness expressly permitted by the Credit Facility Agreement and the Revolving Note, will be subordinated to the Facility. On March 6, 2019, the Company amended and restated the Credit Facility Agreement (the “Amended and Restated Facility Agreement”) and the Revolving Note. The Amended and Restated Facility Agreement provides among other things that the Company’s obligations thereunder are secured by a first priority lien in certain deposit accounts of the Company, all current and future accounts receivable of Aspen University and USU, certain of the deposit accounts of Aspen University and USU and all of the outstanding capital stock of Aspen University and USU.
Pursuant to the Credit Facility Agreement, on November 5, 2018 the Company issued to the Foundation warrants to purchase 92,049 shares of the Company’s common stock exercisable for five years from the date of issuance at the exercise price of $5.85 per share which were deemed to have a relative fair value of $255,071 (the "2018 Cooperman Warrants"). These warrants were exercised on June 8, 2020. The fair value of the warrants along with the upfront Facility fee were treated as debt issue cost assets to be amortized over the term of the loan. As a result of the aforementioned note extension, the remainder of the unamortized costs of $9,722 were written off during the quarter ended October 31, 2021. Total unamortized costs at January 31, 2022 and April 30, 2021 were $0 and $18,056, respectively.
Note 7. Stockholders’ Equity
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2022
(Unaudited)
AGI maintains two stock-based incentive plans: the 2012 Equity Incentive Plan (the “2012 Plan”) and 2018 Equity Incentive Plan (the “2018 Plan”) that provide for the grant of shares in the form of incentive stock options, non-qualified stock options, restricted shares, stock appreciation rights and RSUs to employees, consultants, officers and directors. The 2012 Plan expired March 15, 2022 and remains in effect for outstanding grants only, and is no longer available for new grants. On March 8, 2022 we transferred the 129,009 unused shares under the 2012 Plan to the 2018 Plan.
On December 22, 2021, the Company held its Annual Meeting of Shareholders at which the shareholders voted to amend the 2018 Plan to increase the number of shares of common stock available for issuance under the 2018 Plan from 1,600,000 to 2,350,000 shares.
As of January 31, 2022 and April 30, 2021 there were 732,013 and 549,739 shares remaining available for future issuance under the 2012 and the 2018 Plans, respectively. Following the increase to the 2018 Plan by shareholder approval and by virtue of the transfer of the former 2012 Plan shares to the 2018 Plan shares described above, there are now a total of 732,013 shares under the 2018 Plan of which zero shares are available for new grants. Because we reserved 12 million shares of common stock which covers the 10 million shares issuable upon the conversion of the new convertible notes (plus an extra 2 million shares required by the lenders), we cannot issue all of the awards available under the 2018 Plan unless our stockholders approve an increase in our authorized capital.
Common Stock
On January 3, 2022, the Compensation Committee approved a 117,316 common stock grant to the members of the Board of Directors for services in the 2021 calendar year. The grant had a grant date fair value of $279,212 based on a closing stock price of $2.38 per share. The grant was under the Company’s 2018 Plan and was fully vested and amortized as of January 31, 2022. These shares will be issued in the fourth quarter of fiscal year 2022. The amortization expense is included within stock-based compensation in general and administrative expense in the accompanying consolidated statement of operations.
Restricted Stock
As of January 31, 2022, there were no unvested shares of restricted common stock outstanding. During the nine months ended January 31, 2022, there were no new restricted stock grants, forfeitures, or expirations. There is no unrecognized compensation expense related to restricted stock as of January 31, 2022.
Restricted Stock Units
A summary of the Company’s RSU activity during the nine months ended January 31, 2022 is presented below:
| | | | | | | | | | | | | | |
Restricted Stock Units | | Number of Shares | | Weighted Average Grant Price |
Unvested balance outstanding, April 30, 2021 | | 549,972 | | | $ | 6.58 | |
Granted | | 514,142 | | | 5.62 | |
Forfeits | | (36,353) | | | 9.67 | |
Vested | | (75,124) | | (1) | 4.54 | |
Expired | | — | | | — | |
Unvested balance outstanding, January 31, 2022 | | 952,637 | | | $ | 4.84 | |
________________________________
(1) Includes 1,416 RSUs that will be issued in the fourth quarter of fiscal year 2022.
Of the 514,142 RSUs granted during the nine months ended January 31, 2022, 410,000 RSUs correspond to executive compensation grants summarized below.
On August 16 2021, the Compensation Committee approved a 125,000 RSU grant to the Company’s newly hired Chief Financial Officer as part of his employment agreement. The grant has a grant date fair value of $725,000 based on a closing stock price of $5.80 per share. On August 12, 2021, the Compensation Committee approved individual grants of 80,000 RSUs
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2022
(Unaudited)
to the Company’s Chief Operating Officer and Chief Academic Officer. The grants have a total grant date fair value of $1.0 million based on a closing stock price of $6.48 per share.
The three executive grants discussed above are under the Company’s 2018 Plan and are set to vest annually over a period of three years and are subject to continued employment as an officer of the Company on each applicable vesting date. The amortization expense related to these grants for the three and nine months ended January 31, 2022 was $146,817 and $293,633, respectively and is included in "general and administrative expense" in the accompanying consolidated statement of operations.
On July 21, 2021, as part of a new employment agreement, the Compensation Committee approved a 125,000 RSU grant to the Company's Chief Executive Officer under the Company's 2018 Plan. The grant has a grant date fair value of $873,750 based on a closing stock price of $6.99 per share. As stipulated in the grant, vesting is subject to continued employment with the Company and will occur in full on the date the Company files with the SEC a quarterly or annual report on Forms 10-Q or 10-K, as applicable, which reflects the Company's reported net income on a GAAP basis. At January 31, 2022, the Company is amortizing the expense over three years through July 2024 (the filing date of the Form 10-K for Fiscal Year 2024). The Company will continue to assess the performance condition at each reporting period. If the RSUs do not vest within three years from the July 21, 2021 effective date, they will be forfeited. The amortization expense related to this grant for the three and nine months ended January 31, 2022 was $(121,354) and $169,896, respectively, which is included in general and administrative expense in the consolidated statements of operations.
The remaining 104,142 RSUs granted during the nine months ended January 31, 2022 were granted to employees and have a grant date fair value that ranges from $2.09 to $6.50 per share, or a total of $253,738, vesting annually over three years and subject to continued employment on each applicable vesting date.
Of the 952,637 unvested RSUs outstanding at January 31, 2022, 195,000 remain from the February 4, 2020 executive grant. These RSUs vest four years from the grant date, if each applicable executive is still employed by the Company on the vesting date and subject to accelerated vesting for all RSUs if the closing price of the Company’s common stock is at least $12 for 20 consecutive trading days. On the grant date, the closing price of the Company's common stock on The Nasdaq Global Market was $9.49 per share. The amortization expense related to this grant for the three and nine months ended January 31, 2022 and 2021, was approximately $112,155 and $336,466, and $149,855 and $1.6 million, respectively, which is included in general and administrative expense in the consolidated statements of operations.
At January 31, 2022, total unrecognized compensation expense related to unvested RSUs is $4,612,404 and is expected to be recognized over a weighted-average period of approximately 1.59 years.
Warrants
The Company estimates the fair value of warrants utilizing the Black-Scholes pricing model, which is dependent upon several variables such as the expected term, expected volatility of the Company’s stock price over the expected term, expected risk-free interest rate over the expected term and expected dividend yield rate over the expected term. The Company believes this valuation methodology is appropriate for estimating the fair value of warrants issued to directors which are subject to ASC Topic 718 requirements. These amounts are estimates and thus may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes expense on a straight-line basis over the vesting period of each warrant issued.
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2022
(Unaudited)
A summary of the Company’s warrant activity during the nine months ended January 31, 2022 is presented below: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Warrants | | Number of Shares | | Weighted Average Exercise Price | | Weighted Average Remaining Contractual Term | | Aggregate Intrinsic Value |
Balance Outstanding, April 30, 2021 | | 374,174 | | | $ | 6.37 | | | 1.90 | | $ | — | |
Granted | | 75,000 | | | $ | 6.23 | | | 4.55 | | — | |
Exercised | | — | | | $ | — | | | — | | | — | |
Surrendered | | — | | | $ | — | | | — | | | — | |
Expired | | — | | | $ | — | | | — | | | — | |
Balance Outstanding, January 31, 2022 | | 449,174 | | | $ | 6.35 | | | 1.71 | | $ | — | |
| | | | | | | | |
Exercisable, January 31, 2022 | | 424,174 | | | $ | 6.31 | | | 1.55 | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
OUTSTANDING WARRANTS | | EXERCISABLE WARRANTS |
Exercise Price | | Weighted Average Exercise Price | | Outstanding No. of Warrants | | Weighted Average Exercise Price | | Weighted Average Remaining Life In Years | | Exercisable No. of Warrants |
$ | 4.89 | | | $ | 4.89 | | | 50,000 | | | $ | 4.89 | | | 2.19 | | 50,000 | |
$ | 5.85 | | | $ | 5.85 | | | 50,000 | | | $ | 5.85 | | | 4.58 | | 50,000 | |
$ | 6.00 | | | $ | 6.00 | | | 100,000 | | | $ | 6.00 | | | 2.09 | | 100,000 | |
$ | 6.87 | | | $ | 6.87 | | | 224,174 | | | $ | 6.87 | | | 0.48 | | 224,174 | |
$ | 6.99 | | | $ | 6.99 | | | 25,000 | | | | | | | |
| | | | 449,174 | | | | | | | 424,174 | |
On August 31, 2021, the Compensation Committee approved the issuance of warrants to the Leon and Toby Cooperman Family Foundation as an extension fee in connection with the extension of the Credit Facility Agreement. The warrants allow for the purchase of 50,000 shares of the Company’s common stock and have an exercise price of $5.85. The warrants have an exercise period of five years from the August 31, 2021 issuance date and will terminate automatically and immediately upon the expiration of the exercise period. The fair value of the warrants is $137,500 and is being amortized over the 14-month line of credit period. The Company has recognized $29,464 and $49,107 of amortization expense in connection with the fair value of the warrants for the three and nine months ending January 31, 2022, respectively, which is included in "interest expense" in the accompanying consolidated statement of operations.
On July 21, 2021, the Executive Committee approved the issuance of warrants to a former member of the Board of Directors for the purchase of 25,000 shares of the Company's common stock with an exercise price of $6.99 per share. The warrants have an exercise period of five years from the July 21, 2021 issuance date and vest annually over a three year period subject to continued service on the Company's Advisory Board on each applicable vesting date. The warrants will terminate automatically and immediately upon the expiration of the exercise period. The fair value of the warrants is $84,000 and is being amortized over the three year vesting period. The Company has recognized $7,000 and $16,333 of amortization expense in connection with the fair value of the warrants for the three and nine months ending January 31, 2022, respectively, which is included in general and administrative expense in the accompanying consolidated statement of operations.
During the three months ended July 31, 2020, there was a warrant modification and acceleration charge of $25,966 related to the exercise of 192,049 warrants by the Leon and Toby Cooperman Family Foundation, which was included in “other (expense) income, net” in the accompanying consolidated statement of operations.
On April 10, 2019, the Company issued warrants to an Advisory Board member for services to purchase 50,000 shares of the Company's common stock with an exercise price of $4.89 per share. The warrants have an exercise period of five years from the April 10, 2019 issuance date and vest annually over a three year period. The warrants will terminate automatically and
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2022
(Unaudited)
immediately upon the expiration of the exercise period. The fair value of the warrants is $109,500 and is being amortized over the three year vesting period. The Company has recognized $9,125 and $27,375 of amortization expense in connection with the fair value of the warrants for the three and nine months ending January 31, 2022 and 2021, respectively, which is included in general and administrative expense in the accompanying consolidated statement of operations.
Stock Option Grants to Employees and Directors
The Company estimates the fair value of share-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables such as the expected option term, expected volatility of the Company’s stock price over the expected term, expected risk-free interest rate over the expected option term and expected dividend yield rate over the expected option term. The Company believes this valuation methodology is appropriate for estimating the fair value of stock options granted to employees and directors which are subject to ASC Topic 718 requirements. These amounts are estimates and thus may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes compensation on a straight-line basis over the requisite service period for each award.
The Company utilizes the simplified method to estimate the expected life for stock options granted to employees. The simplified method was used as the Company does not have sufficient historical data regarding stock option exercises. The expected volatility is based on historical volatility. The risk-free interest rate is based on the U.S. Treasury yields with terms equivalent to the expected life of the related option at the time of the grant. Dividend yield is based on historical trends. While the Company believes these estimates are reasonable, the compensation expense recorded would increase if the expected life was increased, a higher expected volatility was used, or if the expected dividend yield increased.
A summary of the Company’s stock option activity for employees and directors during the nine months ended January 31, 2022, is presented below: | | | | | | | | | | | | | | | | | | | | | | | | | | |
Options | | Number of Shares | | Weighted Average Exercise Price | | Weighted Average Remaining Contractual Term | | Aggregate Intrinsic Value |
Balance Outstanding, April 30, 2021 | | 1,214,473 | | | $ | 6.24 | | | 1.88 | | $ | 204,719 | |
Granted | | — | | | — | | | — | | | — | |
Exercised | | (258,419) | | | 5.60 | | | — | | | — | |
Forfeited | | (4,586) | | | 4.59 | | | — | | | — | |
Expired | | (22,793) | | | 3.21 | | | — | | | — | |
Balance Outstanding, January 31, 2022 | | 928,675 | | | $ | 6.84 | | | 1.41 | | $ | — | |
| | | | | | | | |
Exercisable, January 31, 2022 | | 891,264 | | | $ | 6.92 | | | 1.38 | | $ | — | |
Of the 258,419 options exercised, 200,000 options were exercised via the cashless method by the Company’s Chief Operating Officer in September 2021. As part of this cashless transaction, 30,156 net shares were issued and 169,844 were retained by the Company. The remainder of the 58,419 options were exercised for cash.
During the three and nine months ended January 31, 2022 and 2021, the Company received proceeds from the exercise of stock options for cash of $135,000 and $191,034, and $363,385 and $2,578,700, respectively.
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2022
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
OUTSTANDING OPTIONS | | EXERCISABLE OPTIONS |
Exercise Price | | Weighted Average Exercise Price | | Outstanding Number of Options | | Weighted Average Exercise Price | | Weighted Average Remaining Life In Years | | Exercisable Number of Options |
$3.24 to $4.38 | | $ | 4.14 | | | 115,890 | | | $ | 4.15 | | | 0.94 | | 103,389 | |
$4.50 to $5.20 | | $ | 4.99 | | | 153,944 | | | $ | 5.03 | | | 1.77 | | 137,394 | |
$5.95 to $6.28 | | $ | 5.95 | | | 28,000 | | | $ | 5.95 | |