Aspen Group, Inc. Announces Closing of $12.4 Million Private Placement
May 16 2023 - 4:01PM
Aspen Group, Inc. ("AGI") (OTC Pink: ASPU), an education technology
holding company, today announced that it has closed on a private
placement of debentures with JGB Management Inc. for gross proceeds
of $12.4 million, before an 11% original issue discount, fees and
other financing expenses, from the issuance of a senior secured
debenture. AGI also issued the investors a total of 2.2 million
five-year warrants. The Company intends to use the proceeds from
the private placement to refinance existing debt and for working
capital purposes.
Michael Mathews, Chairman and CEO of Aspen Group, stated, "We
are thrilled to announce the successful closure of this financing
with the JGB team, which has significantly improved Aspen Group's
financial position. This will enable us to effectively manage
changes in the timing of financial aid-related cash flow and pay
off our outstanding $5 million line of credit. As we continue to
work towards achieving our goals, marketing is a key catalyst to
increasing enrollment in our highly sought-after Aspen University
post-licensure nursing degree programs and USU’s MSN-FNP (Family
Nurse Practitioner) degree program, among others. With the
implementation of cost reductions which improves our cash flow from
operations, we now have the opportunity to increase our marketing
budget and position the company to continue maintaining a positive
Adjusted EBITDA."
The 36-month debentures, issued on May 11, 2023, bear interest
at 15% per annum, are paid monthly, and are not convertible. The
AGI’s obligations under the debentures are secured by substantially
all of AGI’s and its subsidiaries’ assets. The debentures also
contain customary affirmative and negative covenants, events of
defaults and other customary terms for senior secured debentures.
Each warrant entitles the holder to purchase one share of the
company’s common stock at an exercise price of US $0.01 per share
for five-years following the closing date of the offering.
The company has filed its Quarterly Report on Form 10-Q for the
three months ended January 31, 2023, with the Securities and
Exchange Commission today, May 16, 2023. for further details on the
terms and covenants related to this financing agreement, please
refer to the footnote section in the 10-Q.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including the plan to increase marketing and continue to
achieve positive Adjusted EBITDA. The words “believe,” “may,”
“estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,”
“could,” “target,” “potential,” “is likely,” “will,” “expect” and
similar expressions, as they relate to us, are intended to identify
forward-looking statements. We have based these forward-looking
statements largely on our current expectations and projections
about future events and financial trends that we believe may affect
our financial condition, results of operations, business strategy
and financial needs. Important factors that could cause actual
results to differ from those in the forward-looking statements
include our ability to enroll new students and generate revenue
from our new marketing program, the impact of a declining economy,
inflation, higher interest rates, the banking crisis, the continued
attraction of online learning as COVID-19 has receded, student
attrition, the competitive impact from the trend of non-profit
universities using online education and consolidation among our
competitors. Other risks are included in our filings with the SEC
including our Form 10-K for the year ended April 30, 2022. Any
forward-looking statement made by us herein speaks only as of the
date on which it is made. Factors or events that could cause our
actual results to differ may emerge from time to time, and it is
not possible for us to predict all of them. We undertake no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future developments or
otherwise, except as may be required by law.
About Aspen Group, Inc.
Aspen Group, Inc. is an education technology holding company
that leverages its infrastructure and expertise to allow its two
universities, Aspen University and United States University, to
deliver on the vision of making college affordable again. For more
information, visit www.aspu.com.
Contact Information:
Hayden IRKimberly Rogers(385) 831-7337Kim@HaydenIR.com
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