˿Ƶ

false--04-30Q32023000148719812P6YP1Y00014871982022-05-012023-01-3100014871982023-05-12xbrli:shares00014871982023-01-31iso4217:USD00014871982022-04-30iso4217:USDxbrli:shares00014871982022-11-012023-01-3100014871982021-11-012022-01-3100014871982021-05-012022-01-310001487198us-gaap:CommonStockMember2022-10-310001487198us-gaap:AdditionalPaidInCapitalMember2022-10-310001487198us-gaap:TreasuryStockCommonMember2022-10-310001487198us-gaap:RetainedEarningsMember2022-10-3100014871982022-10-310001487198us-gaap:AdditionalPaidInCapitalMember2022-11-012023-01-310001487198us-gaap:CommonStockMember2022-11-012023-01-310001487198us-gaap:RetainedEarningsMember2022-11-012023-01-310001487198us-gaap:CommonStockMember2023-01-310001487198us-gaap:AdditionalPaidInCapitalMember2023-01-310001487198us-gaap:TreasuryStockCommonMember2023-01-310001487198us-gaap:RetainedEarningsMember2023-01-310001487198us-gaap:CommonStockMember2021-10-310001487198us-gaap:AdditionalPaidInCapitalMember2021-10-310001487198us-gaap:TreasuryStockCommonMember2021-10-310001487198us-gaap:RetainedEarningsMember2021-10-3100014871982021-10-310001487198us-gaap:AdditionalPaidInCapitalMember2021-11-012022-01-310001487198us-gaap:CommonStockMember2021-11-012022-01-310001487198us-gaap:RetainedEarningsMember2021-11-012022-01-310001487198us-gaap:CommonStockMember2022-01-310001487198us-gaap:AdditionalPaidInCapitalMember2022-01-310001487198us-gaap:TreasuryStockCommonMember2022-01-310001487198us-gaap:RetainedEarningsMember2022-01-3100014871982022-01-310001487198us-gaap:CommonStockMember2022-04-300001487198us-gaap:AdditionalPaidInCapitalMember2022-04-300001487198us-gaap:TreasuryStockCommonMember2022-04-300001487198us-gaap:RetainedEarningsMember2022-04-300001487198us-gaap:AdditionalPaidInCapitalMember2022-05-012023-01-310001487198us-gaap:CommonStockMember2022-05-012023-01-310001487198us-gaap:RetainedEarningsMember2022-05-012023-01-310001487198us-gaap:CommonStockMember2021-04-300001487198us-gaap:AdditionalPaidInCapitalMember2021-04-300001487198us-gaap:TreasuryStockCommonMember2021-04-300001487198us-gaap:RetainedEarningsMember2021-04-3000014871982021-04-300001487198us-gaap:AdditionalPaidInCapitalMember2021-05-012022-01-310001487198us-gaap:CommonStockMember2021-05-012022-01-310001487198us-gaap:RetainedEarningsMember2021-05-012022-01-31aspu:subsidiary0001487198aspu:LetterOfCreditForLevelOfTitleIVFundingAtUSUMember2023-01-310001487198aspu:LetterOfCreditForLevelOfTitleIVFundingAtUSUMember2022-04-300001487198aspu:CollateralForCorporateCreditCardAtAGIMember2023-01-310001487198aspu:CollateralForCorporateCreditCardAtAGIMember2022-04-300001487198aspu:LettersOfCreditForOperatingLeasesAtAUAndUSUMember2023-01-310001487198aspu:LettersOfCreditForOperatingLeasesAtAUAndUSUMember2022-04-300001487198aspu:CollateralForSuretyBondAtAUMember2023-01-310001487198aspu:CollateralForSuretyBondAtAUMember2022-04-300001487198us-gaap:EmployeeStockOptionMember2022-05-012023-01-310001487198us-gaap:EmployeeStockOptionMember2021-05-012022-04-300001487198us-gaap:RestrictedStockUnitsRSUMember2022-05-012023-01-310001487198us-gaap:RestrictedStockUnitsRSUMember2021-05-012022-04-300001487198us-gaap:WarrantMember2022-05-012023-01-310001487198us-gaap:WarrantMember2021-05-012022-04-300001487198us-gaap:RestrictedStockMember2022-05-012023-01-310001487198us-gaap:RestrictedStockMember2021-05-012022-04-300001487198us-gaap:ConvertibleDebtSecuritiesMember2022-05-012023-01-310001487198us-gaap:ConvertibleDebtSecuritiesMember2021-05-012022-04-30aspu:segment0001487198us-gaap:ComputerSoftwareIntangibleAssetMember2023-01-310001487198us-gaap:ComputerSoftwareIntangibleAssetMember2022-04-300001487198aspu:CoursewareMember2023-01-310001487198aspu:CoursewareMember2022-04-300001487198aspu:AccreditationMember2023-01-310001487198aspu:AccreditationMember2022-04-300001487198aspu:CoursewareAndAccreditationMember2023-01-310001487198aspu:CoursewareAndAccreditationMember2022-04-300001487198aspu:CoursewareAndAccreditationMember2022-11-012023-01-310001487198aspu:CoursewareAndAccreditationMember2021-11-012022-01-310001487198aspu:CoursewareAndAccreditationMember2022-05-012023-01-310001487198aspu:CoursewareAndAccreditationMember2021-05-012022-01-310001487198us-gaap:RevolvingCreditFacilityMemberaspu:CreditFacilityDueMarchFourteenTwoThousandTwentyThreeMemberus-gaap:LineOfCreditMember2023-01-310001487198us-gaap:RevolvingCreditFacilityMemberaspu:CreditFacilityDueMarchFourteenTwoThousandTwentyThreeMemberus-gaap:LineOfCreditMember2022-04-300001487198us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberaspu:CreditFacilityDueNovemberFourTwoThousandTwentyThreeMember2023-01-310001487198us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberaspu:CreditFacilityDueNovemberFourTwoThousandTwentyThreeMember2022-04-300001487198aspu:TwentyTwentyTwoConvertibleNotesMemberus-gaap:ConvertibleNotesPayableMember2023-01-310001487198aspu:TwentyTwentyTwoConvertibleNotesMemberus-gaap:ConvertibleNotesPayableMember2022-04-300001487198aspu:TwentyTwentyTwoConvertibleNotesMember2022-03-1400014871982022-03-14aspu:unaffiliated_lender0001487198us-gaap:ConvertibleDebtMemberaspu:TwentyTwentyTwoConvertibleNotesMember2022-03-140001487198aspu:TwentyTwentyTwoConvertibleNotesMemberus-gaap:ConvertibleNotesPayableMember2022-03-140001487198aspu:TwentyTwentyTwoConvertibleNotesMemberus-gaap:ConvertibleNotesPayableMember2022-03-142022-03-14aspu:dayxbrli:pure0001487198us-gaap:SubsequentEventMemberaspu:TwentyTwentyTwoConvertibleNotesMemberus-gaap:ConvertibleNotesPayableMember2023-05-120001487198aspu:TwentyTwentyTwoConvertibleNotesMember2022-03-142022-03-140001487198aspu:TwentyTwentyTwoConvertibleNotesMember2022-08-012022-08-310001487198us-gaap:RevolvingCreditFacilityMemberaspu:TwoThousandTwentyTwoRevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-03-140001487198us-gaap:RevolvingCreditFacilityMemberaspu:TwoThousandTwentyTwoRevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-03-142022-03-140001487198us-gaap:RevolvingCreditFacilityMemberaspu:TwoThousandTwentyTwoRevolvingCreditFacilityMember2023-01-310001487198us-gaap:RevolvingCreditFacilityMemberaspu:TwoThousandEighteenCreditFacilityAgreementMemberus-gaap:LineOfCreditMember2022-03-142022-03-1400014871982022-04-220001487198aspu:IntercreditorAgreementMember2022-04-22aspu:lender0001487198us-gaap:RevolvingCreditFacilityMember2022-04-220001487198us-gaap:WarrantMemberaspu:IntercreditorAgreementMember2022-04-220001487198us-gaap:WarrantMemberaspu:IntercreditorAgreementMember2022-04-222022-04-2200014871982022-03-0800014871982022-10-312022-10-310001487198us-gaap:SuretyBondMemberaspu:CollateralPledgedStateOfArizonaMember2022-12-012022-12-310001487198us-gaap:RevolvingCreditFacilityMemberaspu:TwoThousandEighteenCreditFacilityAgreementMember2018-11-050001487198us-gaap:RevolvingCreditFacilityMemberaspu:TwoThousandEighteenCreditFacilityAgreementMembersrt:MinimumMember2018-11-050001487198us-gaap:SubsequentEventMemberus-gaap:SecuredDebtMemberaspu:A15SeniorSecuredDebenturesDue2026Member2023-05-120001487198us-gaap:RevolvingCreditFacilityMemberaspu:TwoThousandEighteenCreditFacilityAgreementMember2021-08-312021-08-310001487198us-gaap:RevolvingCreditFacilityMemberaspu:TwoThousandEighteenCreditFacilityAgreementMember2022-04-300001487198us-gaap:RevolvingCreditFacilityMemberaspu:TwoThousandEighteenCreditFacilityAgreementMember2023-01-310001487198us-gaap:WarrantMemberus-gaap:RevolvingCreditFacilityMemberaspu:TwoThousandEighteenCreditFacilityAgreementMember2021-08-310001487198us-gaap:WarrantMemberus-gaap:RevolvingCreditFacilityMemberaspu:TwoThousandEighteenCreditFacilityAgreementMember2021-08-312021-08-310001487198us-gaap:RevolvingCreditFacilityMemberaspu:TwoThousandEighteenCreditFacilityAgreementMember2022-03-140001487198us-gaap:RevolvingCreditFacilityMemberaspu:TwoThousandEighteenCreditFacilityAgreementMembersrt:MaximumMember2022-03-14aspu:plan00014871982022-03-082022-03-080001487198aspu:EquityIncentivePlanMember2023-01-310001487198aspu:EquityIncentivePlanMember2022-04-3000014871982022-07-0500014871982022-07-060001487198aspu:A2018EquityIncentivePlanMember2021-12-210001487198aspu:A2018EquityIncentivePlanMember2021-12-220001487198srt:MaximumMemberus-gaap:PreferredStockMember2023-01-310001487198aspu:EquityDistributionAgreementMember2022-08-182022-08-180001487198aspu:EquityDistributionAgreementMember2022-05-012023-01-310001487198aspu:LampertCapitalAdvisorsMemberus-gaap:CommonStockMember2022-08-042022-08-040001487198aspu:LampertCapitalAdvisorsMemberus-gaap:CommonStockMember2022-08-040001487198aspu:LampertCapitalAdvisorsMemberus-gaap:CommonStockMember2022-08-012022-10-310001487198us-gaap:RestrictedStockMember2022-04-300001487198us-gaap:RestrictedStockMember2023-01-310001487198us-gaap:RestrictedStockMember2022-05-012023-01-310001487198us-gaap:RestrictedStockMember2021-05-012022-01-310001487198us-gaap:RestrictedStockUnitsRSUMember2022-04-300001487198us-gaap:RestrictedStockUnitsRSUMember2022-05-012023-01-310001487198us-gaap:RestrictedStockUnitsRSUMember2023-01-310001487198us-gaap:RestrictedStockUnitsRSUMembersrt:ChiefFinancialOfficerMember2021-08-162021-08-160001487198us-gaap:RestrictedStockUnitsRSUMembersrt:ChiefFinancialOfficerMember2021-08-160001487198srt:ChiefOperatingOfficerMemberus-gaap:RestrictedStockUnitsRSUMember2021-08-122021-08-120001487198us-gaap:RestrictedStockUnitsRSUMemberaspu:ChiefAcademicOfficerMember2021-08-122021-08-120001487198us-gaap:RestrictedStockUnitsRSUMember2021-08-120001487198us-gaap:RestrictedStockUnitsRSUMemberaspu:A2018EquityIncentivePlanMember2022-05-012023-01-310001487198us-gaap:RestrictedStockUnitsRSUMemberaspu:A2018EquityIncentivePlanMember2022-11-012023-01-310001487198us-gaap:RestrictedStockUnitsRSUMemberaspu:A2018EquityIncentivePlanMember2021-11-012022-01-310001487198us-gaap:RestrictedStockUnitsRSUMemberaspu:A2018EquityIncentivePlanMember2021-05-012022-01-310001487198srt:ChiefExecutiveOfficerMemberus-gaap:RestrictedStockUnitsRSUMember2021-07-212021-07-210001487198srt:ChiefExecutiveOfficerMemberus-gaap:RestrictedStockUnitsRSUMember2021-07-210001487198srt:ChiefExecutiveOfficerMemberus-gaap:RestrictedStockUnitsRSUMember2022-07-312022-07-310001487198srt:ChiefExecutiveOfficerMemberus-gaap:RestrictedStockUnitsRSUMember2021-11-012022-01-310001487198srt:ChiefExecutiveOfficerMemberus-gaap:RestrictedStockUnitsRSUMember2021-05-012022-01-310001487198us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2023-01-310001487198us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2020-02-042020-02-0400014871982020-02-040001487198aspu:ChiefNursingOfficerMemberus-gaap:RestrictedStockUnitsRSUMember2022-11-012023-01-310001487198aspu:ChiefNursingOfficerMemberus-gaap:RestrictedStockUnitsRSUMember2022-05-012023-01-310001487198aspu:ChiefNursingOfficerMemberus-gaap:RestrictedStockUnitsRSUMember2022-07-152022-07-150001487198aspu:ChiefNursingOfficerMemberus-gaap:RestrictedStockUnitsRSUMember2021-11-012022-01-310001487198aspu:ChiefNursingOfficerMemberus-gaap:RestrictedStockUnitsRSUMember2021-05-012022-01-310001487198us-gaap:WarrantMember2022-04-300001487198us-gaap:WarrantMember2021-05-012022-04-300001487198us-gaap:WarrantMember2022-05-012023-01-310001487198us-gaap:WarrantMember2023-01-310001487198aspu:ClassOfWarrantOrRightExercisePriceOneMember2023-01-310001487198aspu:ClassOfWarrantOrRightExercisePriceOneMember2022-05-012023-01-310001487198aspu:ClassOfWarrantOrRightExercisePriceTwoMember2023-01-310001487198aspu:ClassOfWarrantOrRightExercisePriceTwoMember2022-05-012023-01-310001487198aspu:ClassOfWarrantOrRightExercisePriceThreeMember2023-01-310001487198aspu:ClassOfWarrantOrRightExercisePriceThreeMember2022-05-012023-01-310001487198aspu:ClassOfWarrantOrRightExercisePriceFourMember2023-01-310001487198aspu:ClassOfWarrantOrRightExercisePriceFourMember2022-05-012023-01-310001487198aspu:ClassOfWarrantOrRightExercisePriceFiveMember2023-01-310001487198aspu:ClassOfWarrantOrRightExercisePriceFiveMember2022-05-012023-01-310001487198us-gaap:WarrantMemberus-gaap:RevolvingCreditFacilityMemberaspu:TwoThousandTwentyTwoRevolvingCreditFacilityMember2022-04-220001487198us-gaap:WarrantMember2022-04-220001487198us-gaap:WarrantMemberaspu:IntercreditorAgreementMember2023-01-310001487198us-gaap:WarrantMemberaspu:IntercreditorAgreementMember2022-04-300001487198us-gaap:WarrantMemberaspu:IntercreditorAgreementMember2022-11-012023-01-310001487198us-gaap:WarrantMemberaspu:IntercreditorAgreementMember2022-05-012023-01-310001487198us-gaap:WarrantMemberaspu:LeonAndTobyCoopermanFamilyFoundationMember2021-08-310001487198us-gaap:WarrantMemberaspu:LeonAndTobyCoopermanFamilyFoundationMember2021-08-312021-08-310001487198us-gaap:WarrantMemberus-gaap:RevolvingCreditFacilityMemberaspu:CreditFacilityAgreementMember2021-08-310001487198us-gaap:WarrantMemberaspu:LeonAndTobyCoopermanFamilyFoundationMember2022-11-012023-01-310001487198us-gaap:WarrantMemberaspu:LeonAndTobyCoopermanFamilyFoundationMember2022-05-012023-01-310001487198aspu:FormerBoardOfDirectorMemberus-gaap:WarrantMember2021-07-210001487198aspu:FormerBoardOfDirectorMemberus-gaap:WarrantMember2021-07-212021-07-210001487198aspu:FormerBoardOfDirectorMemberus-gaap:WarrantMember2022-11-012023-01-310001487198aspu:FormerBoardOfDirectorMemberus-gaap:WarrantMember2022-05-012023-01-310001487198us-gaap:EmployeeStockOptionMemberaspu:StockIncentivePlanMemberaspu:EmployeesAndDirectorsMember2022-04-300001487198us-gaap:EmployeeStockOptionMemberaspu:StockIncentivePlanMemberaspu:EmployeesAndDirectorsMember2021-05-012022-04-300001487198us-gaap:EmployeeStockOptionMemberaspu:StockIncentivePlanMemberaspu:EmployeesAndDirectorsMember2022-05-012023-01-310001487198us-gaap:EmployeeStockOptionMemberaspu:StockIncentivePlanMemberaspu:EmployeesAndDirectorsMember2023-01-310001487198aspu:ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeThreeMember2022-05-012023-01-310001487198aspu:ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeThreeMember2023-01-310001487198aspu:ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeFourMember2022-05-012023-01-310001487198aspu:ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeFourMember2023-01-310001487198aspu:ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeSixMember2022-05-012023-01-310001487198aspu:ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeSixMember2023-01-310001487198us-gaap:RestrictedStockUnitsRSUMember2022-11-012023-01-310001487198us-gaap:RestrictedStockUnitsRSUMember2021-11-012022-01-310001487198us-gaap:RestrictedStockUnitsRSUMember2021-05-012022-01-310001487198us-gaap:RestrictedStockMember2022-11-012023-01-310001487198us-gaap:RestrictedStockMember2021-11-012022-01-310001487198us-gaap:EmployeeStockOptionMember2022-11-012023-01-310001487198us-gaap:EmployeeStockOptionMember2021-11-012022-01-310001487198us-gaap:EmployeeStockOptionMember2022-05-012023-01-310001487198us-gaap:EmployeeStockOptionMember2021-05-012022-01-310001487198aspu:TuitionRevenueMember2022-11-012023-01-310001487198aspu:TuitionRevenueMember2021-11-012022-01-310001487198aspu:TuitionRevenueMember2022-05-012023-01-310001487198aspu:TuitionRevenueMember2021-05-012022-01-310001487198aspu:CourseFeeRevenueMember2022-11-012023-01-310001487198aspu:CourseFeeRevenueMember2021-11-012022-01-310001487198aspu:CourseFeeRevenueMember2022-05-012023-01-310001487198aspu:CourseFeeRevenueMember2021-05-012022-01-310001487198aspu:BookFeeRevenueMember2022-11-012023-01-310001487198aspu:BookFeeRevenueMember2021-11-012022-01-310001487198aspu:BookFeeRevenueMember2022-05-012023-01-310001487198aspu:BookFeeRevenueMember2021-05-012022-01-310001487198aspu:ExamFeeRevenueMember2022-11-012023-01-310001487198aspu:ExamFeeRevenueMember2021-11-012022-01-310001487198aspu:ExamFeeRevenueMember2022-05-012023-01-310001487198aspu:ExamFeeRevenueMember2021-05-012022-01-310001487198aspu:ServiceFeeRevenueMember2022-11-012023-01-310001487198aspu:ServiceFeeRevenueMember2021-11-012022-01-310001487198aspu:ServiceFeeRevenueMember2022-05-012023-01-310001487198aspu:ServiceFeeRevenueMember2021-05-012022-01-310001487198us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberus-gaap:NonUsMember2022-05-012023-01-310001487198us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberus-gaap:NonUsMember2021-11-012022-01-310001487198us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberus-gaap:NonUsMember2022-11-012023-01-310001487198us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberus-gaap:NonUsMember2021-05-012022-01-310001487198us-gaap:CustomerConcentrationRiskMemberaspu:PreLicensureNursingProgramMemberus-gaap:SalesRevenueNetMember2022-11-012023-01-310001487198us-gaap:CustomerConcentrationRiskMemberaspu:PreLicensureNursingProgramMemberus-gaap:SalesRevenueNetMember2022-05-012023-01-310001487198us-gaap:CustomerConcentrationRiskMemberaspu:PreLicensureNursingProgramMemberus-gaap:SalesRevenueNetMember2021-11-012022-01-310001487198us-gaap:CustomerConcentrationRiskMemberaspu:PreLicensureNursingProgramMemberus-gaap:SalesRevenueNetMember2021-05-012022-01-31utr:sqft0001487198srt:MinimumMember2023-01-310001487198srt:MaximumMember2023-01-310001487198us-gaap:LatestTaxYearMemberus-gaap:ForeignCountryMember2022-11-012023-01-310001487198us-gaap:LatestTaxYearMemberus-gaap:ForeignCountryMember2022-05-012023-01-310001487198us-gaap:ForeignCountryMemberus-gaap:TaxYear2022Member2021-11-012022-01-310001487198us-gaap:ForeignCountryMemberus-gaap:TaxYear2022Member2021-05-012022-01-310001487198us-gaap:ForeignCountryMembercountry:CAaspu:TaxYear2013To2021Member2021-05-012022-01-310001487198aspu:HemgMember2013-02-110001487198aspu:HemgMember2015-09-290001487198aspu:HemgMember2021-07-212021-07-210001487198aspu:HemgMember2021-05-012021-07-3100014871982021-04-162021-04-1600014871982020-01-012020-12-3100014871982021-01-012021-12-310001487198aspu:PhoenixArizonaMember2022-02-28aspu:employee00014871982022-03-012022-03-3100014871982022-06-30aspu:phase00014871982022-09-30aspu:quarter00014871982022-01-012022-03-3100014871982022-04-012022-06-3000014871982022-07-012022-09-300001487198srt:MinimumMember2022-09-202022-09-2000014871982020-05-012021-04-3000014871982021-05-012022-04-300001487198us-gaap:SuretyBondMemberaspu:CollateralPledgedStateOfArizonaMember2022-04-30aspu:state0001487198aspu:TitleIVProgramsAspenUniversityMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-05-012022-04-300001487198aspu:TitleIVProgramsUnitedStatesUniversityMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-05-012022-04-300001487198us-gaap:SubsequentEventMemberus-gaap:SecuredDebtMemberaspu:A15SeniorSecuredDebenturesDue2026Member2023-05-122023-05-120001487198us-gaap:SubsequentEventMemberaspu:A2018RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2023-05-122023-05-120001487198us-gaap:SubsequentEventMember2023-05-120001487198us-gaap:SubsequentEventMemberaspu:CashFromPrivateOfferingMember2023-05-120001487198us-gaap:SubsequentEventMemberus-gaap:SecuredDebtMemberaspu:A15SeniorSecuredDebenturesDue2026Membersrt:ScenarioForecastMember2024-05-122024-05-120001487198us-gaap:SubsequentEventMemberaspu:PennyWarrantsMember2023-05-120001487198us-gaap:SubsequentEventMemberaspu:PennyWarrantsMember2023-05-122023-05-120001487198us-gaap:SubsequentEventMemberaspu:TwentyTwentyTwoConvertibleNotesMemberus-gaap:ConvertibleNotesPayableMember2023-05-10aspu:debt_instrument
Table of Contents
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, 2023
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
AGI Logo.jpg
ASPEN GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware27-1933597
State or Other Jurisdiction of Incorporation or OrganizationI.R.S. Employer Identification No.
276 Fifth Avenue, Suite 505, New York, New York
10001
Address of Principal Executive OfficesZip Code
(646) 448-5144
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None.

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 
ClassOutstanding as of May 12, 2023
Common Stock, $0.001 par value per share
25,462,316 shares


Table of Contents
TABLE OF CONTENTS
Page Number
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
 



Table of Contents
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 31, 2023April 30, 2022
(Unaudited)
Assets
Current assets:
Cash and cash equivalents$1,603,501 $6,482,750 
Restricted cash4,923,525 6,433,397 
Accounts receivable, net of allowance of $3,622,365 and $3,460,288, respectively
22,517,343 24,359,241 
Prepaid expenses925,890 1,358,635 
Other current assets1,050,307 748,568 
Total current assets31,020,566 39,382,591 
Property and equipment:
Computer equipment and hardware1,584,826 1,516,475 
Furniture and fixtures2,219,245 2,193,261 
Leasehold improvements8,046,844 7,179,896 
Instructional equipment756,568 715,652 
Software11,306,700 10,285,096 
Construction in progress 2,100 
23,914,183 21,892,480 
Less: accumulated depreciation and amortization(11,102,309)(8,395,001)
Total property and equipment, net12,811,874 13,497,479 
Goodwill5,011,432 5,011,432 
Intangible assets, net7,900,000 7,900,000 
Courseware, net288,024 274,047 
Long-term contractual accounts receivable16,280,621 11,406,525 
Deferred financing costs155,041 369,902 
Operating lease right-of-use assets, net13,865,872 12,645,950 
Deposits and other assets501,190 578,125 
Total assets$87,834,620 $91,066,051 
(Continued)
The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.
1

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



January 31, 2023April 30, 2022
(Unaudited)
Liabilities and Stockholders’ Equity
Liabilities:
Current liabilities:
Accounts payable$2,247,043 $1,893,287 
Accrued expenses3,118,533 2,821,432 
Deferred revenue8,075,063 5,889,911 
Due to students2,977,365 4,063,811 
Current portion of long-term debt5,000,000  
Operating lease obligations, current portion2,346,766 2,036,570 
Other current liabilities306,484 130,262 
Total current liabilities24,071,254 16,835,273 
Long-term debt, net9,957,328 14,875,735 
Operating lease obligations, less current portion17,869,754 16,809,319 
Total liabilities51,898,336 48,520,327 
Commitments and contingencies – see Note 10
Stockholders’ equity:
Preferred stock, $0.001 par value; 1,000,000 shares authorized,
0 issued and 0 outstanding at January 31, 2023 and April 30, 2022
  
Common stock, $0.001 par value; 60,000,000 shares authorized,
25,586,837 issued and 25,431,351 outstanding at January 31, 2023
25,357,764 issued and 25,202,278 outstanding at April 30, 2022
25,587 25,358 
Additional paid-in capital113,035,546 112,081,564 
Treasury stock (155,486 at both January 31, 2023 and April 30, 2022)
(1,817,414)(1,817,414)
Accumulated deficit(75,307,435)(67,743,784)
Total stockholders’ equity35,936,284 42,545,724 
Total liabilities and stockholders’ equity$87,834,620 $91,066,051 

The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.
2

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


Three Months Ended January 31,Nine Months Ended January 31,
2023202220232022
Revenue$15,574,042 $18,944,798 $51,542,502 $57,316,004 
Operating expenses:
   Cost of revenue (exclusive of depreciation and amortization shown separately below)5,394,155 9,275,419 21,946,714 26,658,188 
   General and administrative9,624,528 11,771,487 31,039,666 34,359,276 
   Bad debt expense450,000 350,000 1,250,000 1,050,000 
   Depreciation and amortization919,152 883,536 2,775,330 2,480,179 
Total operating expenses16,387,835 22,280,442 57,011,710 64,547,643 
   Operating loss(813,793)(3,335,644)(5,469,208)(7,231,639)
Other income (expense):
   Interest expense(716,845)(180,697)(2,008,510)(353,738)
   Other income, net12,847 13,954 28,138 516,754 
Total other (expense) income, net(703,998)(166,743)(1,980,372)163,016 
Loss before income taxes(1,517,791)(3,502,387)(7,449,580)(7,068,623)
Income tax expense 37,249 231,610 114,071 388,520 
Net loss$(1,555,040)$(3,733,997)$(7,563,651)$(7,457,143)
Net loss per share - basic and diluted$(0.06)$(0.15)$(0.30)$(0.30)
Weighted average number of common stock outstanding - basic and diluted25,381,500 25,041,733 25,289,224 24,971,056 


The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.
3

Table of Contents
ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Three Months Ended January 31, 2023 and 2022
(Unaudited)



Common StockAdditional
Paid-In
Capital
Treasury
Stock
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance at October 31, 202225,460,849 $25,461 $112,634,162 $(1,817,414)$(73,752,395)$37,089,814 
Stock-based compensation— — 394,510 — — 394,510 
Common stock issued for vested restricted stock units125,988 126 (126)— —  
Amortization of warrant-based cost issued for services— — 7,000 — — 7,000 
Net loss— — — — (1,555,040)(1,555,040)
Balance at January 31, 202325,586,837 $25,587 $113,035,546 $(1,817,414)$(75,307,435)$35,936,284 
Common StockAdditional
Paid-In
Capital
Treasury
Stock
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance at October 31, 202125,148,194 $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 cash41,667 41 134,959 — — 135,000 
Common stock issued for vested restricted stock units38,719 39 (39)— —  
Amortization of warrant based cost— — 16,125 — — 16,125 
Net loss— — — — (3,733,997)(3,733,997)
Balance at January 31, 202225,228,580 $25,229 $111,378,471 $(1,817,414)$(65,615,146)$43,971,140 



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













4

Table of Contents
ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Nine Months Ended January 31, 2023 and 2022
(Unaudited)


Common StockAdditional
Paid-In
Capital
Treasury
Stock
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance at April 30, 202225,357,764 $25,358 $112,081,564 $(1,817,414)$(67,743,784)$42,545,724 
Stock-based compensation— — 899,176 — — 899,176 
Common stock issued for vested restricted stock units192,233 192 (192)— —  
Common stock issued for services25,000 25 24,475 — — 24,500 
Common stock issued for equity raise, net of underwriter costs11,840 12 9,523 — — 9,535 
Amortization of warrant-based cost issued for services— — 21,000 — — 21,000 
Net loss— — — — (7,563,651)(7,563,651)
Balance at January 31, 202325,586,837 $25,587 $113,035,546 $(1,817,414)$(75,307,435)$35,936,284 
Common StockAdditional
Paid-In
Capital
Treasury
Stock
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance at April 30, 202125,066,297 $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 cash58,419 58 190,976 — — 191,034 
Common stock issued for cashless stock options exercised30,156 30 (30)— —  
Common stock issued for vested restricted stock units73,708 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, 202225,228,580 $25,229 $111,378,471 $(1,817,414)$(65,615,146)$43,971,140 





The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.
5

Table of Contents


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended January 31,
 20232022
Cash flows from operating activities:
Net loss$(7,563,651)$(7,457,143)
Adjustments to reconcile net loss to net cash used in operating activities:
Bad debt expense1,250,000 1,050,000 
Depreciation and amortization2,775,330 2,480,179 
Stock-based compensation899,176 1,965,567 
Amortization of warrant-based cost21,000 43,708 
Amortization of deferred financing costs468,787 49,107 
Amortization of debt discounts88,500 18,056 
Common stock issued for services24,500  
Loss on asset disposition 36,445 
Non-cash lease benefit(267,290)(96,450)
Tenant improvement allowances received from landlords418,000 816,591 
Changes in operating assets and liabilities:
Accounts receivable(4,282,195)(6,412,590)
Prepaid expenses432,745 (297,797)
Other current assets(301,738)37,498 
Accounts receivable, other 45,329 
Deposits and other assets76,934 (44,686)
Accounts payable(68,244)340,168 
Accrued expenses297,101 38,353 
Due to students(1,086,446)482,032 
Deferred revenue2,185,152 (642,233)
Other current liabilities176,222 (171,894)
Net cash used in operating activities(4,456,117)(7,719,760)
Cash flows from investing activities:
Purchases of courseware and accreditation(82,000)(161,262)
Disbursements for reimbursable leasehold improvements(418,000)(816,591)
Purchases of property and equipment(1,181,706)(2,756,817)
Net cash used in investing activities(1,681,706)(3,734,670)
Cash flows from financing activities:
Proceeds from sale of common stock, net of underwriter costs9,535  
Payment of commitment fee for 2022 Credit Facility(200,000) 
Payments of deferred financing costs(60,833) 
Borrowings under the 2018 Credit Facility 5,000,000 
Proceeds from stock options exercised 191,034 
Net cash (used in) provided by financing activities(251,298)5,191,034 

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

6

Table of Contents

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
Nine Months Ended January 31,
20232022
Net decrease in cash, cash equivalents and restricted cash$(6,389,121)$(6,263,396)
Cash, cash equivalents and restricted cash at beginning of period12,916,147 13,666,079 
Cash, cash equivalents and restricted cash at end of period$6,527,026 $7,402,683 
Supplemental disclosure cash flow information:
Cash paid for interest$1,446,728 $258,630 
Cash paid for income taxes$25,253 $13,520 
Supplemental disclosure of non-cash investing and financing activities:
Warrants issued as part of the 2018 Credit Facility amendment$ $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,
20232022
Cash and cash equivalents $1,603,501 $5,969,286 
Restricted cash4,923,525 1,433,397 
Total cash, cash equivalents and restricted cash$6,527,026 $7,402,683 


The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.
7

Table of Contents
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2023
(Unaudited)


Note 1. Nature of Operations
Overview
˿Ƶ. ("AGI") is an education technology holding company. AGI has two subsidiaries, Aspen University Inc. ("Aspen University" or "AU") 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 ˿Ƶ., 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 institutionally accredited by the Distance Education Accrediting Council (“DEAC”), an 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”), an accrediting agency recognized by the DOE, through 2030.
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 had provisional certification resulting from the ownership change of control in connection with the acquisition by AGI on December 1, 2017. The provisional certification expired on December 31, 2020. The institution submitted its recertification application timely in October 2020, and received full certification on May 6, 2022, and a new Program Participation Agreement ("PPA") was issued with an effective period until December 31, 2025. On August 22, 2017, the DOE informed Aspen University of its determination that the institution had qualified to participate under the HEA and the Federal student financial assistance programs (Title IV, HEA programs) and set a subsequent program participation agreement reapplication date of March 31, 2021. On April 16, 2021, the DOE granted provisional certification for a two-year timeframe, and set a subsequent program participation reapplication date of September 30, 2023.

Basis of Presentation
The interim unaudited 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, 2023 and 2022, our cash flows for the nine months ended January 31, 2023 and 2022, and our consolidated financial position as of January 31, 2023 have been made. 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 unaudited 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, 2022 as filed with the SEC on July 29, 2022. The April 30, 2022 consolidated balance sheet is derived from those statements.
Note 2. Significant Accounting Policies
Basis of Consolidation

8

Table of Contents
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2023
(Unaudited)

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, 2022 as filed with the SEC on July 29, 2022.
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 assets ("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.
January 31, 2023April 30, 2022
Cash and cash equivalents$1,603,501 $6,482,750 
Restricted cash:
Letter of credit for level of Title IV funding at USU 9,872 
Collateral for corporate credit card at AGI250,000 250,000 
Letters of credit for operating leases at AU and USU1,173,525 1,173,525 
Collateral for surety bond at AU3,500,000 5,000,000 
Total restricted cash4,923,525 6,433,397 
Total cash and cash equivalents and restricted cash as shown on the statement of cash flows$6,527,026 $12,916,147 
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 January 31, 2023. As of January 31, 2023 and April 30, 2022, the Company maintained deposits exceeding federally insured limits by approximately $2,718,846 and $7,749,715, 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
9

Table of Contents
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2023
(Unaudited)

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. Students may receive discounts, scholarships, or refunds, which gives rise to variable consideration. 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, a contract liability, 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. Summarized below are shares not included in the computation of diluted net loss per share because the effects would have been anti-dilutive. The options, warrants, RSUs, unvested restricted stock and convertible notes are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share of common stock when their effect is dilutive. See Note 6. Stockholders’ Equity.

January 31, 2023April 30, 2022
Options to purchase common shares614,458 860,182 
Restricted stock units  
Warrants to purchase common shares425,000 649,174 
Unvested restricted stock523,056 929,928 
Convertible Notes10,000,000 10,000,000 
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 Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("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 does not expect the adoption of the new standard to have a material impact on its consolidated financial statements when adopted on the effective date of May 1, 2023.
In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The guidance was issued as improvements to ASU No. 2016-13 described above. The
10

Table of Contents
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2023
(Unaudited)

vintage disclosure changes require an entity to disclose current-period gross write-offs by year of origination for financing receivables. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. The amendments should be applied prospectively. Early adoption of the amendments is permitted, including adoption in an interim period. The amendments will impact our disclosures but will not otherwise impact the consolidated financial statements. The Company is currently evaluating the new guidance.
Reclassifications
Certain prior fiscal year amounts have been reclassified to conform to the current year presentation.
The tenant improvement allowances received from landlord's balance of $816,591 for the nine months ended January 31, 2022, which was previously included in "Purchases of property and equipment" in the accompanying consolidated statements of cash flows, was reclassified to "Disbursements for reimbursable leasehold improvements" to align with the current fiscal year presentation. There is no impact to total cash used in investing activities included in the accompanying consolidated statements of cash flows for the nine months ended January 31, 2022.
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, net of proceeds, is recognized as either other income or expense. There was no expense impact for such write-offs for the three and nine months ended January 31, 2023 and 2022.
Software consisted of the following:
January 31, 2023April 30, 2022
Software$11,306,700 $10,285,096 
Accumulated amortization(6,596,730)(5,170,943)
Software, net$4,709,970 $5,114,153 
Depreciation and amortization expense for property and equipment and software is summarized below:
Three Months Ended January 31,Nine Months Ended January 31,
2023202220232022
Depreciation and amortization expense:
Property and equipment, excluding software$417,044 $418,081 $1,281,521 $1,136,929 
Software$478,455 $443,284 $1,425,787 $1,283,088 
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, 2023 and 2022.
11

Table of Contents
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2023
(Unaudited)

Courseware and accreditation consisted of the following:
January 31, 2023April 30, 2022
Courseware$657,282 $575,283 
Accreditation59,350 59,350 
716,632 634,633 
Accumulated amortization(428,608)(360,586)
Courseware and accreditation, net$288,024 $274,047 
Amortization expense for courseware and accreditation is summarized below:
Three Months Ended January 31,Nine Months Ended January 31,
2023202220232022
Courseware and accreditation amortization expense$23,653 $21,744 $68,022 $58,877 
Amortization expense is included in "Depreciation and amortization" in the unaudited consolidated statements of operations.
Note 5. Debt

January 31, 2023April 30, 2022
Credit Facility due March 14, 2023 (the "2022 Revolving Credit Facility")$ $ 
Credit Facility due November 4, 2023 (the "2018 Credit Facility"); interest payable monthly in arrears5,000,000 5,000,000 
12% Convertible Notes due March 14, 2027 (the "2022 Convertible Notes"); interest payable monthly in arrears10,000,000 10,000,000 
Total long-term debt15,000,000 15,000,000 
   Less: current portion of long-term debt(5,000,000) 
   Less: unamortized debt discount(42,672)(124,265)
Total long-term debt, net$9,957,328 $14,875,735 
2022 Convertible Notes
On March 14, 2022, the Company issued $10 million in principal convertible notes (the "2022 Convertible Notes") to two unaffiliated lenders (individually a "Lender" and collectively, the "Lenders") in exchange for $5 million notes to each of the two unaffiliated Lenders. The proceeds are used for general corporate purposes, including funding the Company’s previous expansion of its BSN Pre-Licensure nursing degree program. The key terms of the Convertible Notes are as follows:

At any time after issuance date, the Lenders had the right to convert the principal into shares of the Company’s common stock at a conversion price of $1.00 per share;
The Convertible Notes automatically convert at $1.00 per share into shares of the Company’s common stock if the average closing price of our common stock is at least $2.00 over a 30 consecutive trading day period. This mandatory conversion is subject to each Lender’s 9.9% beneficial ownership limitation;
The Convertible Notes are due March 14, 2027 or approximately five years from the closing;
The interest rate of the Convertible Notes was 12% per annum (payable monthly in arrears), which increased to 14% per annum on May 12, 2023. See Note 11. Subsequent Events; and
The Convertible Notes are secured by a first priority lien (which was subsequently subordinated, as disclosed in Note 11. Subsequent Events) in all current and future accounts receivable of the Company’s subsidiaries, certain of the deposit accounts of the Company and its subsidiaries and a pledge of the common stock of the Company held by its Chief Executive Officer (the “2022 Collateral”).
12

Table of Contents
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2023
(Unaudited)

At closing of the 2022 Convertible Notes, the Company agreed to pay each Lender's legal fees arising from this transaction of $135,562 and another $60,833 incurred during August 2022, which has been recorded as a deferred financing cost debt discount and is being amortized over a one-year period in "Interest expense" in the accompanying consolidated financial statements.
2022 Revolving Credit Facility
On March 14, 2022, the Company entered into Revolving Promissory Note and Security Agreements (the "2022 Revolver Agreements") with the same two unaffiliated Lenders of the 2022 Convertible Notes for a one-year, $20 million secured revolving line of credit that requires monthly interest payments on sums borrowed at the rate of 12% per annum (the "2022 Revolving Credit Facility"). At January 31, 2023, there were no outstanding borrowings under the 2022 Revolving Credit Facility. The Company paid a 1% commitment fee of $200,000 at closing, which was recorded as a deferred financing cost, non-current asset, and is being amortized over the term of the loan of one-year, and another 1% commitment fee of $200,000 six months from the closing date, or September 14, 2022, since the revolving credit facility has not been replaced. On March 14, 2023, the 2022 Revolving Credit Facility expired.
Pursuant to the 2022 Convertible Notes (the "Notes"), all future indebtedness incurred by the Company, other than indebtedness expressly permitted by such Notes, will be subordinated to the Notes and the Prior Credit Facility, as defined below, with an exception for acquisitions of software and equipment under purchase money agreements and capital leases.

On March 14, 2022, in connection with the issuance of the Notes, the Company also entered into an intercreditor agreement (the “Intercreditor Agreement”) among the Company, the Lenders and the lender under a prior credit facility dated November 5, 2018 (as amended, the “2018 Credit Facility”). The Intercreditor Agreement provides among other things that the Company's obligations under, and the security interests in the Collateral granted pursuant to the Notes and the 2018 Credit Facility shall rank pari passu to one another.

In connection with the issuance of the Notes, the Company also entered into an Investors/Registration Rights Agreement with the Lenders (the “Registration Rights Agreement”) whereby, upon request of either Lender on or after August 15, 2022 the Company must file and obtain and maintain the effectiveness of a registration statement registering the shares of common stock issued or issuable upon conversion of the Convertible Notes. No lender requests have been made as of the date of this filing.

On March 14, 2022, the Company entered into an amendment with the lender pursuant to the 2018 Credit Facility to extend the maturity date of the 2018 Credit Facility by one year to November 4, 2023. See the "2018 Credit Facility" discussion below.

On March 14, 2022, the Company entered into a letter agreement with the Lenders (the “Letter Agreement”). Pursuant to the Letter Agreement, the Company and its subsidiaries made certain representations and warranties to the Lenders. The Letter Agreement also contained certain conditions precedent to the closing of the transactions.
On April 22, 2022, the Company entered into an agreement with an insurance company (the "Insurance Company") which issued an approximately $18.3 million surety bond which was required by the Arizona State Board for Private Postsecondary Education. In order to cause the Insurance Company to deliver the surety bond, the Company entered into a First Amendment to the Intercreditor Agreement with the two Lenders of the March 14, 2022, financing arrangements to amend the Intercreditor Agreement entered into by the same parties on March 14, 2022 (the “Amendment”). The Amendment provided that the Company and each of the Lenders, at all times prior to the delivery of the Termination Certificate (as defined below), excluding funding as directed by the surety bond as described more fully below, (i) the Company shall not be permitted to make any draw request or borrow any funds under the 2022 Revolver Agreements and (ii) the Lenders shall not be required to fund any loan or advance any funds under the 2022 Revolver Agreements. Upon that certain surety bond ceasing to be outstanding, the Company shall deliver to the lenders a certificate (such certificate, the “Termination Certificate”), certifying that the surety bond is no longer outstanding and that there are no further obligations in respect of the surety bond owing by the Company to the Insurance Company. Prior to issuance of the Termination Certificate and during the time the surety bond is in effect, the Insurance Company may cause the Company to draw on funds for the express purposes of resolving claims filed under the surety bond. In addition to the draw restriction on the 2022 Revolver Agreements, the Insurance Company required the Company to restrict $5 million of cash. As consideration for the Lenders agreeing to enter into the Amendment, the Company agreed to issue each Lender 100,000 five-year warrants exercisable at $1.00 per share. The fair value of the warrants is $118,000 and is being amortized over the remaining term of the debt. The fair value of the warrants are treated as deferred financing costs, a non-current asset, in the accompanying consolidated balance sheets at April 30, 2022. Total unamortized costs at January 31, 2023 were $29,500. See Note 6. Stockholders’ Equity for additional information related to these warrants.
13

Table of Contents
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2023
(Unaudited)

On October 31, 2022, Aspen University and the Arizona State Board for Private Postsecondary Education entered into a revised stipulated agreement that reduced AU's surety bond requirement from $18.3 million to $5.5 million and required Aspen University to pay a civil penalty of $12,000.
In December 2022, as a result of the revised stipulated agreement with the Arizona State Board for Private Postsecondary Education on October 31, 2022, $1.5 million of the restricted cash associated with the surety bond became unrestricted, providing additional cash for operations.
On January 12, 2023, the Company entered into an agreement with an Insurance Company described above, the effect of which was to remove the Company’s prohibition from borrowing under the 2022 Revolving Credit Facility. As a result, the Company and certain lenders entered into a Second Amendment to the Intercreditor Agreement, which removed a provision which was added by the First Amendment restricting the Company’s ability to draw down from the 2022 Revolving Credit Facility while the Insurance Company’s surety bond remained outstanding. The 2022 Revolving Credit Facility subsequently expired.

2018 Credit Facility
On November 5, 2018, the Company entered into the 2018 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 "2018 Credit Facility") evidenced by a revolving promissory note (the “Revolving Note”). Borrowings under the 2018 Credit Facility Agreement bear interest at 12% per annum. Interest payments are due monthly through the term of the 2018 Credit Facility. The Revolving Note was paid on May 12, 2023, with the proceeds from the 15% Senior Secured Debentures. See Note 11. Subsequent Events.
On August 31, 2021, the Company extended the 2018 Credit Facility Agreement with the Foundation by one year from November 4, 2021, to November 4, 2022 (see below, which were extended by one year). In conjunction with the extension of the 2018 Credit Facility on August 31, 2021, the Company drew down funds of $5,000,000. At each January 31, 2023 and April 30, 2022, there were $5,000,000 outstanding borrowings under the 2018 Credit Facility.
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 through the maturity date of November 4, 2023, as extended on March 14, 2022. On March 14, 2022, the Company extended its existing $5 million Credit Facility by one year to November 4, 2023, at an increased interest rate from 12% to 14% per annum. The fair value of the warrants were recorded as deferred financing costs, a non-current asset, in the accompanying consolidated balance sheets at April 30, 2022, to be amortized over the term of the 2018 Credit Facility. Total unamortized costs at January 31, 2023 were $35,065. See Note 6. Stockholders’ Equity for additional information related to these warrants.
Note 6. Stockholders’ Equity

AGI maintains two stock-based incentive plans: the 2012 Equity Incentive Plan (the “2012 Plan”) and the 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 on 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.

As of January 31, 2023 and April 30, 2022, there were 1,210,797 and 812,763 shares, respectively, remaining available for future issuance under the 2018 Plan.

On July 6, 2022, the Company amended its Certificate of Incorporation, as amended, to increase the number of authorized shares of common stock the Company is authorized to issue from 40,000,000 to 60,000,000 authorized shares, which was approved at a special meeting of the Company's stockholders held on July 6, 2022. This increase has been retrospectively adjusted to all periods in the accompanying consolidated financial statements.

14

Table of Contents
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2023
(Unaudited)

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.

Preferred Stock

The Company is authorized to issue 1,000,000 shares of “blank check” preferred stock with designations, rights and preferences as may be determined from time to time by our Board of Directors. As of January 31, 2023 and April 30, 2022, we had no shares of preferred stock issued and outstanding.

Common Stock

At both January 31, 2023 and April 30, 2022, the Company was authorized to issue 60,000,000 shares of common stock, respectively.
On August 18, 2022, ˿Ƶ. entered into an Equity Distribution Agreement (the “Agreement”) with Northland Securities, Inc. (“Northland”), pursuant to which the Company could issue and sell from time to time, through Northland, shares of the Company’s common stock (the “Shares”), with offering proceeds of up to $3,000,000.

On October 11, 2022, the Company canceled the Agreement. The Company sold 11,840 shares under the Agreement and received net proceeds of $9,535.

On August 4, 2022, the Compensation Committee approved a 25,000 common stock grant to Lampert Capital Advisors for financial advisory services to assist with locating and securing an accounts receivable financing facility to position the Company for future growth among its online post-licensure nursing degree programs. The grant had a grant date fair value of $24,500 based on a closing stock price of $0.98 per share, and it was fully vested on the grant date. The expense related to this grant of $24,500 was incurred in the second quarter of fiscal 2023. The expense is included in "General and administrative" expense in the consolidated statements of operations. See Note 11. Subsequent Events for additional fees and expenses paid in connection with the 15% Senior Secured Debentures on May 12, 2023.

Restricted Stock

As of both January 31, 2023 and April 30, 2022, there were no unvested shares of restricted common stock outstanding. During the nine months ended January 31, 2023 and 2022, there were 10,000 and zero restricted stock expirations. There is no unrecognized compensation expense related to restricted stock as of January 31, 2023.

Restricted Stock Units
A summary of the Company’s RSU activity, granted under the 2012 and 2018 Equity Incentive Plans, during the nine months ended January 31, 2023 is presented below:
Restricted Stock UnitsNumber of SharesWeighted Average Grant Date Fair Value
Unvested balance outstanding, April 30, 2022929,928 $6.12 
Granted15,000 0.35 
Forfeits(185,059)7.65 
Vested(236,813)0.70 
Expired  
Unvested balance outstanding, January 31, 2023523,056 $7.87 
___________________


15

Table of Contents
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2023
(Unaudited)

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 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, 2023 was $146,817 and $440,450, respectively, which is included in "general and administrative expense" in the accompanying consolidated statement of operations. The amortization expense related to these grants for the three and nine months ended January 31, 2022 was $146,817 and $293,633, respectively.

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 had 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. The Company was amortizing the expense over three years through July 2024 (the anticipated filing date of the Form 10-K for Fiscal Year 2024). At July 31, 2022, the Company assessed that the performance condition will not be met. Therefore, the cumulative amortization expense related to this grant of $242,708 was reversed, which is included in general and administrative expense in the consolidated statements of operations. 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 prior to the reversal.

Of the 523,056 unvested RSUs outstanding at January 31, 2023, 162,500 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 are 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, 2023 was $91,531 and $148,911, respectively, which includes an expense reversal of $139,431 due to the resignation of the Chief Nursing Officer on July 15, 2022. The amortization expense related to these transactions for the three and nine months ended January 31, 2022, was $112,155 and $336,466, respectively. The amortization expense is included in general and administrative expense in the consolidated statements of operations. The remaining unvested RSUs during the three and nine months ended January 31, 2023 were granted to employees.

At January 31, 2023, total unrecognized compensation expense related to unvested RSUs is $1,709,599 and is expected to be recognized over a weighted-average period of approximately 1.00 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 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.
16

Table of Contents
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2023
(Unaudited)

A summary of the Company’s warrant activity during the nine months ended January 31, 2023 is presented below:
WarrantsNumber of
Shares
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
Balance Outstanding, April 30, 2022649,174 $4.70 1.96$ 
Granted— $— — — 
Exercised— $— — — 
Surrendered— $— — — 
Expired(224,174)$6.87 — — 
Balance Outstanding, January 31, 2023425,000 $3.56 3.02$ 
Unvested(16,667)
Exercisable, January 31, 2023408,333 $3.42 3.00$ 

OUTSTANDING WARRANTSEXERCISABLE WARRANTS
Exercise
Price
Weighted
Average
Exercise
Price
Outstanding
Number of
Warrants
Weighted
Average
Exercise
Price
Weighted
Average
Remaining Life
In Years
Exercisable
Number of
Warrants
$1.00 1.00 200,000 $1.00 4.23200,000 
$4.89 $4.89 50,000 $4.89 1.1950,000 
$5.85 $5.85 50,000 $5.85 3.5850,000 
$6.00 $6.00 100,000 $6.00 1.09100,000 
$6.99 $6.99 25,000 $6.99 3.478,333 
 425,000   408,333 

On April 22, 2022, as consideration for amending the Intercreditor Agreement, the Company issued warrants to the same two unaffiliated Lenders of the 2022 Convertible Notes, to each purchase 100,000 shares of the Company’s common stock exercisable for five years from the date of issuance at the exercise price of $1.00 per share. See Note 5. Debt. The fair value of the warrants is $118,000 and is being amortized over the remaining term of the debt. The fair value of the warrants is treated as deferred financing costs, a non-current asset, in the accompanying consolidated balance sheets at January 31, 2023 and April 30, 2022. Total unamortized costs at January 31, 2023 and April 30, 2022 was $29,500 and $118,000, respectively. The Company has recognized $29,500 and $88,500 of amortization expense in connection with the fair value of the warrants for the three and nine months ended January 31, 2023, respectively, which is included in "interest expense" in the accompanying consolidated statement of operations.
On August 31, 2021, the Board of Directors approved the issuance of warrants to the Leon and Toby Cooperman Family Foundation as an extension fee in connection with the extension of the 2018 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 $11,168 and $33,504 of amortization expense in connection with the fair value of the warrants for the three and nine months ended January 31, 2023, 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
17

Table of Contents
ASPEN GROUP, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2023
(Unaudited)

over the three-year vesting period. The Company has recognized $7,000 and $21,000 of amortization expense in connection with the fair value of the warrants for the three and nine months ended January 31, 2023, 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.

There were no options granted to employees during the nine months ended January 31, 2023 and 2022.

A summary of the Company’s stock option activity for employees and directors during the nine months ended January 31, 2023, is presented below:
OptionsNumber of
Shares
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
Balance Outstanding, April 30, 2022
860,182 $7.03 1.25$ 
Granted  — — 
Exercised  — — 
Forfeited(36,634)8.89 — — 
Expired(209,090)7.42 — — 
Balance Outstanding, January 31, 2023
614,458 $6.79 0.73$