DENVER-April 19, 2013-(BUSINESS WIRE/ME NewsWire)--Aspen Group, Inc. (OTCBB: ASPU), owner of Aspen University Inc., a nationally accredited online postsecondary education company, announced today the closing of its private placement for $4.6mm to 51 institutional and accredited investors. The lead investor in the offering was Sophrosyne Capital LLC, based in New York.
Laidlaw & Company (UK), Ltd., acted as the lead Placement Agent in the offering conducted in the United States and Europe.
“This financing provides validation by the investment community of Aspen's unique business model; (1) focusing on graduate students, (2) implementing all Internet marketing in-house thereby achieving sub-$1,000 enrollment costs, and (3) transferring that marketing efficiency to our students in the form of $350/credit hour tuition rates,” said Michael Mathews, Chairman & CEO of Aspen Group, Inc.
Mathews continued, “This model is not only the first of its kind in the online, for-profit postsecondary education sector, but it also supports the ability to deliver best-in class student outcomes. For example, in 2012 Aspen's graduation rate was 58% and only 18% of revenues were from Title IV federal financial aid programs. This means that Aspen students are graduating on average with very low or no debt, which sets our graduates on a path to achieve economic benefit from their education much earlier than the sector has traditionally delivered.”
At Aspen Group's recent Annual Shareholders Meeting, the Company announced that it expects to achieve cash-flow positive results when enrollments reach 2,500 full-time degree seeking students, and at 5,000+ full-time degree seeking students the Company forecasts approximately 70% gross margin and 30% Adjusted EBITDA profit margin, (a non-GAAP measure) compared to 18% Net Income profit margin (a GAAP measure). See the Form 8-K filed with the Securities and Exchange Commission on January 31, 2013. As of March 31, 2013, Aspen had 1,836 full-time degree seeking students enrolled and a total student body of 2,779. Finally, following the close of the private placement, Aspen Group's cash position is now $1.25mm, a level expected to provide ample working capital to attain positive cash-flow in the coming months.
Mr. James Ahern, Managing Partner, Capital Markets at Laidlaw & Company (UK), stated, “Laidlaw is pleased to assist Aspen Group in raising the capital that will position the company to become a leading innovator in online education. These funds improve financial strength and allow Aspen to execute its growth plans. Laidlaw is proud to support Aspen Group as it offers a world-class educational experience for substantially lower cost than its online competitors.”
About Aspen Group, Inc.
Aspen Group, Inc. owns Aspen University Inc., a nationally accredited, online postsecondary education company established in 1987. Aspen University's mission is to become an institution of choice for adult learners by offering cost-effective, comprehensive and relevant online education. We are dedicated to helping our students exceed their personal and professional objectives in a socially conscious and economically sensible way. One of the key differences between Aspen University and other publicly-traded, exclusively online for-profit universities is that 87% of our full-time, degree-seeking students (as of March 31, 2013) are enrolled in a graduate degree program (master or doctorate degree program).
Aspen University is accredited by the Accrediting Commission of the Distance Education and Training Council (DETC). The Accrediting Commission of the Distance Education and Training Council is listed by the U.S. Department of Education as a nationally recognized accrediting agency, and is a recognized member of the Council for Higher Education Accreditation (CHEA).