Delaware
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333-165685
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27-1933597
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(State or Other Jurisdiction
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(Commission
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(I.R.S. Employer
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of Incorporation)
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File Number)
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Identification No.)
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Certificate in Internet Marketing;
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Doctorate of Nursing Practice;
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Bachelor of Science in Technology (with specialization in telecommunications and digitally integrated premise design);
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Bachelor of Fine Arts;
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Associate in Fine Arts; and
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MBA Specialization in Internet Marketing.
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Certificates
Certificate in Information Technology with specializations in
• Information Systems Management
• Java Development
• Object Oriented Application Development
• Smart Home Integration
• Web Development
Certificate in Project Management
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Associates Degrees
Associate of General Studies
Associate of Applied Science Early Childhood Education
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Bachelors Degrees
Bachelor of General Studies
Bachelor of Arts in Psychology and Addiction Counseling
Bachelor of Science in Alternative Energy
Bachelor of Science in Business Administration
Bachelor of Science in Business Administration, (Completion Program)
Bachelor of Science in Criminal Justice
Bachelor of Science in Criminal Justice, (Completion Program)
Bachelor of Science in Criminal Justice with specializations in
•• Criminal Justice Administration
•• Major Crime Investigation Procedure
•• Major Crime Investigation Procedure, (Completion Program)
Bachelor of Science in Early Childhood Education
Bachelor of Science in Early Childhood Education, (Completion Program)
Bachelor of Science in Early Childhood Education with a specialization in
•• Infants and Toddlers
•• Infants and Toddlers, (Completion Program)
•• Preschool
•• Preschool, (Completion Program)
Bachelor of Science in Foodservice Operations and Restaurant Management
Bachelor of Science in Medical Managements
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Masters
Master of Arts Psychology and Addiction Counseling
Master of Science in Criminal Justice
Master of Science in Criminal Justice with a specialization in
•• Forensic Sciences
•• Law Enforcement Management
•• Terrorism and Homeland Security
Master of Science in Information Management with a specialization in
•• Management
•• Project Management
•• Technologies
Master of Science in Information Systems with a specialization in
•• Enterprise Application Development
•• Web Development
Master of Science in Information Technology
Master of Science in Nursing with a specialization in
•• Administration and Management
•• Administration and Management, (RN to MSN Bridge Program)
•• Nursing Education
•• Nursing Education, (RN to MSN Bridge Program)
Master of Science in Physical Education and Sports Management
Master of Science in Technology and Innovation with a specialization in
•• Business Intelligence and Data Management
•• Electronic Security
•• Project Management
•• Systems Design
•• Technical Languages
•• Vendor and Change Control Management
Master in Business Administration
Master in Business Administration with specializations in
•• Entrepreneurship
•• Finance
•• Information Management
•• Pharmaceutical Marketing and Management
•• Project Management
Master in Education
•• Curriculum Development and Outcomes Assessment
•• Education Technology
•• Transformational Leadership
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Doctorates
Doctorate of Science in Computer Science
Doctorate in Education Leadership and Learning
Doctorate in Education Leadership and Learning with specializations
•• Education Administration
•• Faculty Leadership
•• Instructional Design
•• Leadership and Learning
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authorized to offer its programs of instruction by the applicable state education agencies in the states in which it is physically located (in our case, Colorado);
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accredited by an accrediting agency recognized by the Secretary of the DOE; and
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certified as an eligible institution by the DOE.
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comply with all applicable Title IV program regulations;
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have capable and sufficient personnel to administer the federal student financial aid programs;
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have acceptable methods of defining and measuring the satisfactory academic progress of its students;
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not have cohort default rates above specified levels;
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have various procedures in place for safeguarding federal funds;
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not be, and not have any principal or affiliate who is, debarred or suspended from federal contracting or engaging in activity that is cause for debarment or suspension;
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provide financial aid counseling to its students;
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refer to the DOE’s Office of Inspector General any credible information indicating that any applicant, student, employee, or agent of the institution, has been engaged in any fraud or other illegal conduct involving Title IV programs;
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report annually to the Secretary of Education on any reasonable reimbursements paid or provided by a private education lender or group of lenders to any employee who is employed in the institution’s financial aid office or who otherwise has responsibilities with respect to education loans;
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develop and apply an adequate system to identify and resolve conflicting information with respect to a student’s application for Title IV aid;
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submit in a timely manner all reports and financial statements required by the regulations; and
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not otherwise appear to lack administrative capability.
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require the repayment of Title IV funds;
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transfer the institution from the “advance” system of payment of Title IV funds to cash monitoring status or to the “reimbursement” system of payment;
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place the institution on provisional certification status; or
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commence a proceeding to impose a fine or to limit, suspend or terminate the participation of the institution in Title IV programs.
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posting a letter of credit in an amount equal to at least 50% of the total Title IV program funds received by us during our most recently completed fiscal year;
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posting a letter of credit in an amount equal to at least 10% of such prior year’s Title IV program funds received by us, accepting provisional certification, complying with additional DOE monitoring requirements and agreeing to receive Title IV program funds under an arrangement other than the DOE’s standard advance payment arrangement such as the “reimbursement” system of payment or cash monitoring; or
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complying with additional DOE monitoring requirements and agreeing to receive Title IV program funds under an arrangement other than the DOE’s standard advance payment arrangement such as the “reimbursement” system of payment or cash monitoring.
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1.
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Annual loan repayment rate – three to four years after entering repayment on federal student loans, at least 35% of student loans incurred by the applicable cohort of borrowers to fund the costs of a program must be in satisfactory repayment.
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2.
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Discretionary income threshold – three to four years after entering repayment, the median annual loan payment amount for the applicable cohort of students (calculated as described below) may not be greater than 30% of the greater of their average or median discretionary income (annual earnings of a program completer minus 150% of the U.S. Department of Health and Human Services poverty guideline for a single person).
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3.
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Actual earnings threshold – three to four years after entering repayment, the median annual loan payment amount for the applicable cohort of students (calculated as described below) may not be greater than 12% of the greater of their average or median annual earnings.
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10 years for programs that lead to an undergraduate or post-baccalaureate certificate or to an associate’s degree;
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15 years for programs that lead to a bachelor’s or master’s degree; and
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20 years for programs that lead to a doctoral or first-professional degree.
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● | Create greater awareness of our school and our programs; |
● | Identify the most effective and efficient level of spending in each market and specific media vehicle; |
● | Determine the appropriate creative message and media mix for advertising, marketing and promotional expenditures; and |
● | Effectively manage marketing costs (including creative and media). |
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Our ability to compete with existing online colleges which have substantially greater financial resources, deeper management and academic resources, and enhanced public reputations;
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the emergence of more successful competitors;
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factors related to our marketing, including the costs of Internet advertising and broad-based branding campaigns;
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limits on our ability to attract and retain effective employees because of the new incentive payment rule;
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performance problems with our online systems;
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failure to maintain accreditation;
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student dissatisfaction with our services and programs;
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adverse publicity regarding us, our competitors or online or for-profit education generally;
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a decline in the acceptance of online education;
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a decrease in the perceived or actual economic benefits that students derive from our programs;
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potential students may not be able to afford the monthly payments; and
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potential students may not react favorably to our marketing and advertising campaigns.
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The amount written off will be a non-cash charge against future results of operations;
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The amount written off will reduce total assets on the Public Company’s balance sheet;
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If the Public Company’s common stock is less than $1.00 per share, it will be damaged to the extent it seeks to sell the treasury shares at a price of less than $1.00; or
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If the founder institutes litigation against Aspen and is successful, Apsen will be required to pay any adverse judgment or otherwise consummate a settlement. As a consequence, in addition to this out-of-pocket damage, any litigation will be expensive, result in substantial attorney’s fees, accounting fees, expert witness fees and divert management from our business.
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● | Prohibiting false or misleading email header information; |
● | Prohibiting the use of deceptive subject lines; |
● | Ensuring that recipients may, for at least 30 days after an email is sent, opt out of receiving future commercial email messages from the sender; |
● | Requiring that commercial email be identified as a solicitation or advertisement unless the recipient affirmatively permitted the message; and |
● | Requiring that the sender include a valid postal address in the email message. |
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Our failure to generate increasing material revenues;
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Our failure to become profitable;
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Our failure to raise working capital;
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Our public disclosure of the terms of any financing which we consummate in the future;
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Actual or anticipated variations in our quarterly results of operations;
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Announcements by us or our competitors of significant contracts, new services, acquisitions, commercial relationships, joint ventures or capital commitments;
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The loss of Title IV funding or other regulatory actions;
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Our failure to meet financial analysts’ performance expectations;
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Changes in earnings estimates and recommendations by financial analysts;
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Short selling activities; or | |
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Changes in market valuations of similar companies. |
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Effective July 15, 2011, Aspen substantially changed its tuition rates across all degree-seeking programs. We terminated a pre-payment option that charged students only $3,600 for the entire 12-course master or doctorate program (the pre-payment option offered the student the ability to pre-pay $2,700 for the first four courses or 12 credit hours, followed by $112.50 per course or $37.50 per credit hour for the remaining eight courses.) The new tuition policy effective July 15, 2011 is $300 per credit hour (compared to an average tuition rate of $100 per credit hour under the prior plan) for master or doctorate programs, with a pre-payment option that offers students a discount of approximately 33% off the $300 per credit hour standard payment plan. These rates do not include fees such as annual library/technology fee, or dissertation and internship fees.
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Our total enrollment grew over 47% from 1,342 students at December 31, 2010 to 1,973 students at December 31, 2011.
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We spent $981,546 revamping our e-commerce infrastructure including call center management software and services, lead management software and services and student management system upgrade.
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We enhanced our marketing techniques and increased our marketing budget.
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Late in 2011 we hired a new Executive Vice President of Marketing who will head our new call center opening in 2012, subject to any required regulatory approvals.
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Year
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Quarter Ended
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Prices (1)(2)
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High
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Low
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|||||||||
2011
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December 31
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$ |
6.50
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$ |
6.50
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|||||
September 30
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$
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6.50
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$
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6.50
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June 30
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$
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6.50
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$
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6.25
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March 31
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$
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0.0208
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$
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0.0208
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(1)
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On June 21, 2011, the Public Company completed a 12 for 1 forward stock split. All prices in the table have been adjusted for the forward split.
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(2)
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All prices give effect to the 1-for-2.5 reverse stock split effected in February 2012.
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Name
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Date Sold
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No. of Securities
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Reason for Issuance
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Series A Investors (1)
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May 20, 2011
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850,395 Series A Preferred Stock
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Equity exchange of $809,900
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Series B Note Investors (1)
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May 20, 2011
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368,411 Series B Notes
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Loans of $350,000
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Series B Note Holders (2)
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May 20, 2011
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368,411 Series B Preferred Stock
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Conversion of Notes to Series B
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Series C Investors (2)
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May 20, 2011
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11,307,450 Series C Preferred Stock
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Conversion of common stock
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Series D Investors (1)
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August 19, 2011
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1,176,750 Series D Preferred Stock
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Investments of $1,176,750
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Series E Investors (1)
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September 28, 2011
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1,700,000 Series E Preferred Stock
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Investments of $1,700,000
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Aspen Shareholders (3)
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March 13, 2012
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25,515,204 shares of Common Stock, $500,000 of convertible notes and 456,000 warrants
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Merger Consideration
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Bridge Lenders (1)
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March 15, 2012
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$150,000 Convertible Notes and 37,500 warrants
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Loan
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(1)
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The securities were issued in reliance upon the exemption provided by Section 4(2) and Rule 506 under the Securities Act. There was no general solicitation and the investors were accredited. Of the funds received in the Series A offering, $740,000 was used to repurchase common stock from prior investors under an agreement entered into prior to 2011.
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(2)
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The securities were issued in reliance upon the exemption provided by 3(a)(9) under the Securities Act.
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(3)
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The securities were issued in reliance upon the exemption provided by Section 4(2) under the Securities Act. There was no general solicitation.
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Name
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Age
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Position
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Michael Mathews
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50
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Chief Executive Officer, and Chairman of the Board
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Gerald Williams
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58
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President
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David Garrity
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51
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Chief Financial Officer
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Brad Powers
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36
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Chief Marketing Officer
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Angela Siegel
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32
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Executive Vice President of Marketing
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Michael D’Anton
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54
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Director
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C. James Jensen
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70
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Director
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David Pasi
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51
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Director
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Sanford Rich
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54
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Director
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John Scheibelhoffer
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50
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Director
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Paul Schneier
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61
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Director
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Name and Principal Position (a)
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Year (b)
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Salary
($)(c)
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All Other
Compensation
($)(i)
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Total
($)(j)
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||||||||||
Michael Mathews (1)
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2011
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62,500 | 62,500 | |||||||||||
Chief Executive Officer
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Patrick Spada (2)(3)
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2011
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0 | 440,735 | 440,735 | ||||||||||
Former Chairman
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2010
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0 | 0 | 0 | ||||||||||
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Michael Mathews
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Gerald Williams
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David Garrity
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Brad Powers
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Angela Siegel
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Death or Total Disability
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Six months base salary
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Three months base salary
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Six months base salary
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Six months base salary
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Six months base salary
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||||
Dismissal Without Cause or Resignation for Good Reason (1)
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12 months base salary (2)
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The greater of three months base salary or the remainder of the base salary due under the employment agreement
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The greater of 12 months base salary or the remainder of the base salary due under the employment agreement (2)
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12 months base salary (2)
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The greater of six months base salary or the remainder of the base salary due under the employment agreement
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Change of Control
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None
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The greater of three months base salary or the remainder of the base salary due under the employment agreement (3)
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The greater of 12 months base salary or the remainder of the base salary due under the employment agreement (2)
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None
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The greater of six months base salary or the remainder of the base salary due under the employment agreement. (3)
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Expiration of Initial Term and Aspen does not renew
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12 months base salary (2)
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Three months base salary
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12 months base salary (2)
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12 months base
salary (2)
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Six months base salary
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●
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David Pasi invested $30,000 for 31,500 shares of Series A.
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Sanford Rich invested $25,000 for 26,250 shares of Series A*.
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C. James Jensen invested $50,000 for 52,500 shares of Series A.
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Michael Mathews invested $150,000 for 157,500 shares of Series A.
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David Garrity invested $25,000 for 26,250 shares of Series A*.
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Michael Mathews invested $50,000 for 52,631 shares of Series B.
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John Scheibelhoffer invested $31,500 for 33,157 shares of Series B.
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Michael D’Anton invested $7,500 for 7,894 shares of Series B.
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John Scheibelhoffer invested $50,000 for 188,457 shares of Series C.
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Michael D’Anton invested $50,000 for 188,457 shares of Series C.
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C. James Jensen invested $53,062 for 200,000 shares of Series C.
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David E. Pasi invested $50,000 for 188,457 shares of Series C.
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David Garrity invested $25,053 for 94,430 shares of Series C.
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Michael Mathews invested $238,209.94 for 897,848 shares of Series C.
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Gerald Williams invested $25,000 for 94,229 shares of Series C.
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Title of Class
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Beneficial Owner
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Amount of Beneficial
Ownership (1)
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Percent
Beneficially
Owned (1)
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|||||||
Named Executive Officers:
|
||||||||||
Common Stock
|
Michael Mathews (2)
|
2,918,450 | 8.3 | % | ||||||
Common Stock
|
Patrick Spada (3)
|
6,398,315 | 18.1 | % | ||||||
Directors:
|
||||||||||
Common Stock
|
Michael D’Anton (4)
|
1,952,589 | 5.5 | % | ||||||
Common Stock
|
James Jensen (4)
|
221,976 | * | |||||||
Common Stock
|
David Pasi (4)
|
317,195 | * | |||||||
Common Stock
|
Sanford Rich (4)
|
26,250 | * | |||||||
Common Stock
|
John Scheibelhoffer (4)
|
1,977,852 | 5.6 | % | ||||||
Common Stock
|
Paul Schneier (4)
|
735,000 | 2.1 | % | ||||||
Common Stock
|
All directors and executive officers as a group (11 persons) (5)
|
8,835,428 | 25.0 | % | ||||||
5% Shareholders:
|
||||||||||
Common Stock
|
Higher Education Management Group, Inc. (6)
|
6,387,815 | 18.1 | % | ||||||
* Less than 1%. |
(a) |
Financial Statements of Businesses Acquired. In accordance with Item 9.01(a), Aspen’s audited consolidated financial statements for the fiscal years ended December 31, 2011 and 2010, are filed in this report on Form 8-K as Exhibit 99.1.
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(b) |
Pro Forma Financial Information. In accordance with Item 9.01(b), our pro forma financial statements are filed in this Form 8-K as Exhibit 99.2.
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(c) |
Shell Company Transactions. Reference is made to Items 9.01(a) and 9.01(b) and the exhibits referred to therein, which are incorporated herein by reference.
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(d) | Exhibits. The exhibits listed in the following Exhibit Index are filed as part of Form 8-K. |
Incorporated by Reference
|
Filed or Furnished
|
|||||||||
Exhibit #
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Exhibit Description
|
Form
|
Date
|
Number
|
Herewith
|
|||||
Certificate of Merger
|
Filed
|
|||||||||
Agreement and Plan of Merger*
|
Filed
|
|||||||||
Agreement and Plan of Merger – DE Reincorporation
|
Filed
|
|||||||||
Articles of Merger – DE Reincorporation
|
Filed
|
|||||||||
Certificate of Merger – DE Reincorporation
|
Filed
|
|||||||||
Certificate of Incorporation, as amended
|
Filed
|
|||||||||
Bylaws
|
Filed
|
|||||||||
Certificate of Incorporation – Acquisition Sub
|
Filed
|
|||||||||
Articles of Amendment to FL Articles of Incorporation
|
Filed
|
|||||||||
3.5
|
Articles of Amendment to FL Articles of Incorporation
|
8-K
|
6/20/11
|
3.3
|
||||||
3.6
|
FL Articles of Incorporation
|
S-1/A
|
5/5/10
|
3.1
|
||||||
Employment Agreement – Mathews**
|
Filed
|
|||||||||
Employment Agreement – Garrity **
|
Filed
|
|||||||||
Employment Agreement – Powers**
|
Filed
|
|||||||||
Employment Agreement - Siegel**
|
Filed
|
|||||||||
Employment Agreement - Williams**
|
Filed
|
|||||||||
September 16, 2011 Spada Agreement
|
Filed
|
|||||||||
Consulting Agreement – Spada
|
Filed
|
|||||||||
Lock-Up/Leak-Out Agreement – Spada
|
Filed
|
|||||||||
Form of Lock-Up/Leak-Out Agreement – officers and directors
|
Filed
|
|||||||||
Stock Pledge Agreement - HEMG
|
Filed
|
|||||||||
Stock Pledge Agreement - Directors
|
Filed
|
|||||||||
Stock Pledge Agreement - Mathews dated March 8, 2012
|
Filed
|
|||||||||
2012 Equity Incentive Plan
|
Filed
|
|||||||||
Form of Stock Option Agreement
|
Filed
|
|||||||||
Form of Siegel Stock Option Agreement
|
Filed
|
|||||||||
10.16 |
Stock Pledge Agreement - Mathews dated March 16, 2012
|
Filed
|
||||||||
10.17 | Amendment to Mathews Employment Agreement** | Filed | ||||||||
10.18 | Amendment of Powers Employment Agreement** | Filed | ||||||||
Former Auditor Letter
|
Filed
|
|||||||||
Aspen University Audited Financial Statements
|
Filed
|
|||||||||
Pro Forma Unaudited Financial Statements
|
Filed
|
(i)
|
the representations and warranties contained in any agreements filed with this report were made for the purposes of allocating contractual risk between the parties and not as a means of establishing facts;
|
(ii)
|
the agreement may have different standards of materiality than standards of materiality under applicable securities laws;
|
(iii)
|
the representations are qualified by a confidential disclosure schedule that contains nonpublic information that is not material under applicable securities laws;
|
(iv)
|
facts may have changed since the date of the agreement; and
|
(v)
|
only parties to the agreement and specified third-party beneficiaries have a right to enforce the agreement.
|
ASPEN GROUP, INC. | |||
Date: March 19, 2012
|
By:
|
/s/ Michael Mathews | |
Name: Michael Mathews | |||
Title: Chief Executive Officer |
NAME
|
STATE OF INCORPORATION
|
Aspen Acquisition Sub, Inc.
|
Delaware
|
Aspen University Inc.
|
Delaware
|
Aspen University Inc., a Delaware corporation | |||
|
By:
|
/s/ Michael Mathews | |
Michael Mathews, Chief Executive Officer | |||
(a)
|
Extend the time for the performance of any of the obligations of the other;
|
“Aspen”
|
||
Aspen Group, Inc.
|
||
By: /s/ Don Ptalis,
|
||
Don Ptalis | ||
CEO | ||
“PrivateCo” | ||
Aspen University Inc. | ||
By: /s/ Michael Mathews, | ||
Michael Mathews | ||
CEO | ||
“Merger Sub” | ||
Aspen Acquisition Sub, Inc. | ||
By: /s/ Don Ptalis, | ||
Don Ptalis | ||
CEO |
1.
|
Merger. Subject to the terms and conditions hereinafter set forth, Elite Nutritional Brands shall be merged with and into Aspen Group, with Aspen Group to be the surviving corporation in the merger (the “Merger”). The Merger shall be effective on the later of the date and time (the “Effective Time”) that a properly executed certificate of merger consistent with the terms of this Plan and Section 252 of the Delaware General Corporation Law (the “DGCL”) is filed with the Secretary of State of Delaware or articles of merger are filed with the Secretary of State of Florida.
|
2.
|
Principal Office of Aspen Group. The address of the principal office of Aspen Group is 301 Kindermack Road, Suite A-2, Westwood, NJ 07675.
|
3.
|
Corporate Documents. The Articles of Incorporation of Aspen Group, as in effect immediately prior to the Effective Time, shall continue to be the Articles of Incorporation of Aspen Group as the surviving corporation without change or amendment until further amended in accordance with the provisions thereof and applicable law. The Bylaws of Aspen Group, as in effect immediately prior to the Effective Time, shall continue to be the Bylaws of Aspen Group as the surviving corporation without change or amendment until further amended in accordance with the provisions thereof and applicable law.
|
4.
|
Directors and Officers. The directors and officers of Elite Nutritional Brands at the Effective Time shall be and become directors and officers, holding the same titles and positions, of Aspen Group at the Effective Time, and after the Effective Time shall service in accordance with the Bylaws of Aspen Group.
|
5.
|
Succession. At the Effective Time, Aspen Group shall succeed to Elite Nutritional Brands in the manner of and as more fully set forth in Section 259 of the DGCL and as set forth under Florida Law.
|
6.
|
Further Assurances. From time to time, as and when required by Aspen Group or by its successors and assigns, there shall be executed and delivered on behalf of Elite Nutritional Brands such deeds and other instruments, and there shall be taken or caused to be taken by it such further and other action, as shall be appropriate or necessary in order to vest or perfect in or to confer of record or otherwise in Aspen Group the title to and possession of all interests, assets, rights, privileges, immunities, powers, franchises and authority of Elite Nutritional Brands and otherwise to carry out the purposes and intent of this Plan, and the officers and directors of Aspen Group are fully authorized in the name and on behalf of Elite Nutritional Brands or otherwise to take any and all such actions and to execute and deliver and an all such deeds and other instruments.
|
7.
|
Common Stock of Elite Nutritional Brands. At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof each 2.5 shares of Florida Common Stock outstanding immediately prior thereto shall be changed and converted automatically into one fully paid and nonassessable share of Delaware Common Stock. All fractional shares shall be rounded up.
|
8.
|
Stock Certificates. At and after the Effective Time, all of the outstanding certificates which prior to that time represented shares of Florida Common Stock shall be deemed for all purposes to evidence ownership of and to represent shares of Delaware Common Stock into which the shares of the Florida Common Stock, represented by such certificates have been converted as herein provided. The registered owner on the books and records of Elite Nutritional Brands or its transfer agent of any such outstanding stock certificates shall, until such certificate shall have been surrendered for transfer or otherwise accounted to Aspen Group or its transfer agent, have and be entitled to exercise any voting and other rights with respect to and to receive any dividend and other distributions upon the shares of Florida Common Stock.
|
9.
|
Options; Warrants. Each option, warrant or other right to purchase 2.5 shares of Florida Common Stock, which are outstanding at the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into and become an option, warrant or right to purchase, respectively, one share of Delaware Common Stock as the case may be at an exercise or purchase price per share equal to the exercise or purchase price applicable to the option, warrant or other right to purchase Florida Common Stock.
|
10.
|
Common Stock of Aspen Group. At the Effective Time, the previously outstanding Ten shares of Florida Common Stock registered in the name of Elite Nutritional Brands shall, by reason of the Merger, be reacquired by Aspen Group, shall be retired and shall resume the status of authorized and unissued shares of Florida Common Stock and no shares of Florida Common Stock or other securities of Aspen Group shall be issued in respect thereof.
|
11.
|
Amendment. The Board of Directors of Elite Nutritional Brands and Aspen Group may amend this plan at any time prior to the Merger, provided that an amendment made subsequent to the adoption of the Plan by the sole shareholder of Aspen Group or the stockholders of Elite Nutritional Brands shall not (i) alter or change the amount or kinds of shares, securities, cash, property and/or rights to be received in exchange for the Delaware Common Stock or Delaware Preferred Stock (ii) alter or change any term of the articles of incorporation of Aspen Group, as surviving corporation to the Merger, or (iii) alter or change any of the terms and conditions of the plan if such alteration or change would adversely affect the holders of Delaware Common Stock or Delaware Preferred Stock.
|
12.
|
Abandonment. At any time before the Effective Time, this Plan may be terminated and the Merger contemplated hereby may be abandoned by the Board of Directors of either Elite Nutritional Brands or Aspen Group or both, notwithstanding approval of this Plan by the sole shareholder of Aspen Group or the stockholders of Elite Nutritional Brands, or both.
|
13.
|
Rights and Duties of Aspen Group. At the Effective Time and for all purposes the separate existence of Elite Nutritional Brands shall cease and shall be merged with and into Aspen Group which, as the surviving corporation, shall thereupon and thereafter possess all the rights, privileges, immunities, licenses and franchises (whether of a public or private nature) of Elite Nutritional Brands; and all property (real, personal and mixed) all debts on whatever account, all choices in action, and all and every other interest of or belonging to or due to Elite Nutritional Brands shall continue and be taken and deemed to be transferred to and vested in Aspen Group without further act or deed; and the title to any real estate or any other interest therein, vested in Elite Nutritional Brands shall not revert or be in any way impaired by reason of such Merger; and Aspen Group shall thenceforth be responsible and liable for all liabilities and obligations of Elite Nutritional Brands; and, to the extent permitted by law, any claim existing, or action or proceeding pending, by or against Elite Nutritional Brands may be prosecuted as if the Merger had not taken place, or Aspen Group may be substituted in the place of such corporation. Neither the rights of creditors nor any liens upon the property of Elite Nutritional Brands shall be impaired by the Merger. If at any time Aspen Group shall consider or be advised that any further assignment or assurances in law or any other actions are necessary or desirable to vest the title of any property or rights of Elite Nutritional Brands in Aspen Group according to the terms hereof, the officers and directors of Aspen Group are empowered to execute and make all such proper assignments and assurances and do any and all other things necessary or proper to vest title to such property or other rights in Aspen Group and otherwise to carry out the purposes of this Plan.
|
14.
|
Consent to Service of Process. Aspen Group hereby agrees that it may be served with process in the State of Delaware in any proceedings for enforcement of any obligation of Elite Nutritional Brands, as well as for enforcement of any obligation of Aspen Group arising from the Merger. Aspen group hereby irrevocably appoints the Secretary of State of the State of Delaware and the successors of such officer its attorney in fact in the State of Delaware upon whom may be served any notice, process or pleading in any action or proceeding against it to enforce against Aspen Group any obligation of Elite Nutritional Brands. In the event of such service upon the Secretary of the State of the State of Delaware or the successors of such officer, such service shall be mailed to the principal office of Aspen Group at 301 Kindermack Road, Suite A-2, Westwood, NJ 07675.
|
Elite Nutritional Brands, Inc. | |||
a Florida Company | |||
|
By:
|
/s/ Don Ptalis | |
Don Ptalis, CEO |
Aspen Group, Inc. | |||
a Delaware Corporation | |||
|
By:
|
/s/ Don Ptalis | |
Don Ptalis, CEO |
Name | Jurisdiction | Document Number | ||
Aspen Group, Inc. | Delaware |
Name | Jurisdiction | Document Number | ||
Elite Nutritional Brands, Inc. | Florida | P10000016795 |
Name of Corporation | Signature of an Officer or Director | Printed Name of Officer or Director | ||
Aspen Group, Inc. | /s/ Don Ptalis | Don Ptalis, CEO | ||
Elite Nutritional Brands, Inc. | /s/ Don Ptalis | Don Ptalis, CEO |
1.
|
Merger. Subject to the terms and conditions hereinafter set forth, Elite Nutritional Brands shall be merged with and into Aspen Group, with Aspen Group to be the surviving corporation in the merger (the “Merger”). The Merger shall be effective on the later of the date and time (the “Effective Time”) that a properly executed certificate of merger consistent with the terms of this Plan and Section 252 of the Delaware General Corporation Law (the “DGCL”) is filed with the Secretary of State of Delaware or articles of merger are filed with the Secretary of State of Florida.
|
2.
|
Principal Office of Aspen Group. The address of the principal office of Aspen Group is 301 Kindermack Road, Suite A-2, Westwood, NJ 07675.
|
3.
|
Corporate Documents. The Articles of Incorporation of Aspen Group, as in effect immediately prior to the Effective Time, shall continue to be the Articles of Incorporation of Aspen Group as the surviving corporation without change or amendment until further amended in accordance with the provisions thereof and applicable law. The Bylaws of Aspen Group, as in effect immediately prior to the Effective Time, shall continue to be the Bylaws of Aspen Group as the surviving corporation without change or amendment until further amended in accordance with the provisions thereof and applicable law.
|
4.
|
Directors and Officers. The directors and officers of Elite Nutritional Brands at the Effective Time shall be and become directors and officers, holding the same titles and positions, of Aspen Group at the Effective Time, and after the Effective Time shall service in accordance with the Bylaws of Aspen Group.
|
5.
|
Succession. At the Effective Time, Aspen Group shall succeed to Elite Nutritional Brands in the manner of and as more fully set forth in Section 259 of the DGCL and as set forth under Florida Law.
|
6.
|
Further Assurances. From time to time, as and when required by Aspen Group or by its successors and assigns, there shall be executed and delivered on behalf of Elite Nutritional Brands such deeds and other instruments, and there shall be taken or caused to be taken by it such further and other action, as shall be appropriate or necessary in order to vest or perfect in or to confer of record or otherwise in Aspen Group the title to and possession of all interests, assets, rights, privileges, immunities, powers, franchises and authority of Elite Nutritional Brands and otherwise to carry out the purposes and intent of this Plan, and the officers and directors of Aspen Group are fully authorized in the name and on behalf of Elite Nutritional Brands or otherwise to take any and all such actions and to execute and deliver and an all such deeds and other instruments.
|
7.
|
Common Stock of Elite Nutritional Brands. At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof each 2.5 shares of Florida Common Stock outstanding immediately prior thereto shall be changed and converted automatically into one fully paid and nonassessable share of Delaware Common Stock. All fractional shares shall be rounded up.
|
8.
|
Stock Certificates. At and after the Effective Time, all of the outstanding certificates which prior to that time represented shares of Florida Common Stock shall be deemed for all purposes to evidence ownership of and to represent shares of Delaware Common Stock into which the shares of the Florida Common Stock, represented by such certificates have been converted as herein provided. The registered owner on the books and records of Elite Nutritional Brands or its transfer agent of any such outstanding stock certificates shall, until such certificate shall have been surrendered for transfer or otherwise accounted to Aspen Group or its transfer agent, have and be entitled to exercise any voting and other rights with respect to and to receive any dividend and other distributions upon the shares of Florida Common Stock.
|
9.
|
Options; Warrants. Each option, warrant or other right to purchase 2.5 shares of Florida Common Stock, which are outstanding at the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into and become an option, warrant or right to purchase, respectively, one share of Delaware Common Stock as the case may be at an exercise or purchase price per share equal to the exercise or purchase price applicable to the option, warrant or other right to purchase Florida Common Stock.
|
10.
|
Common Stock of Aspen Group. At the Effective Time, the previously outstanding Ten shares of Florida Common Stock registered in the name of Elite Nutritional Brands shall, by reason of the Merger, be reacquired by Aspen Group, shall be retired and shall resume the status of authorized and unissued shares of Florida Common Stock and no shares of Florida Common Stock or other securities of Aspen Group shall be issued in respect thereof.
|
11.
|
Amendment. The Board of Directors of Elite Nutritional Brands and Aspen Group may amend this plan at any time prior to the Merger, provided that an amendment made subsequent to the adoption of the Plan by the sole shareholder of Aspen Group or the stockholders of Elite Nutritional Brands shall not (i) alter or change the amount or kinds of shares, securities, cash, property and/or rights to be received in exchange for the Delaware Common Stock or Delaware Preferred Stock (ii) alter or change any term of the articles of incorporation of Aspen Group, as surviving corporation to the Merger, or (iii) alter or change any of the terms and conditions of the plan if such alteration or change would adversely affect the holders of Delaware Common Stock or Delaware Preferred Stock.
|
12.
|
Abandonment. At any time before the Effective Time, this Plan may be terminated and the Merger contemplated hereby may be abandoned by the Board of Directors of either Elite Nutritional Brands or Aspen Group or both, notwithstanding approval of this Plan by the sole shareholder of Aspen Group or the stockholders of Elite Nutritional Brands, or both.
|
13.
|
Rights and Duties of Aspen Group. At the Effective Time and for all purposes the separate existence of Elite Nutritional Brands shall cease and shall be merged with and into Aspen Group which, as the surviving corporation, shall thereupon and thereafter possess all the rights, privileges, immunities, licenses and franchises (whether of a public or private nature) of Elite Nutritional Brands; and all property (real, personal and mixed) all debts on whatever account, all choices in action, and all and every other interest of or belonging to or due to Elite Nutritional Brands shall continue and be taken and deemed to be transferred to and vested in Aspen Group without further act or deed; and the title to any real estate or any other interest therein, vested in Elite Nutritional Brands shall not revert or be in any way impaired by reason of such Merger; and Aspen Group shall thenceforth be responsible and liable for all liabilities and obligations of Elite Nutritional Brands; and, to the extent permitted by law, any claim existing, or action or proceeding pending, by or against Elite Nutritional Brands may be prosecuted as if the Merger had not taken place, or Aspen Group may be substituted in the place of such corporation. Neither the rights of creditors nor any liens upon the property of Elite Nutritional Brands shall be impaired by the Merger. If at any time Aspen Group shall consider or be advised that any further assignment or assurances in law or any other actions are necessary or desirable to vest the title of any property or rights of Elite Nutritional Brands in Aspen Group according to the terms hereof, the officers and directors of Aspen Group are empowered to execute and make all such proper assignments and assurances and do any and all other things necessary or proper to vest title to such property or other rights in Aspen Group and otherwise to carry out the purposes of this Plan.
|
14.
|
Consent to Service of Process. Aspen Group hereby agrees that it may be served with process in the State of Delaware in any proceedings for enforcement of any obligation of Elite Nutritional Brands, as well as for enforcement of any obligation of Aspen Group arising from the Merger. Aspen group hereby irrevocably appoints the Secretary of State of the State of Delaware and the successors of such officer its attorney in fact in the State of Delaware upon whom may be served any notice, process or pleading in any action or proceeding against it to enforce against Aspen Group any obligation of Elite Nutritional Brands. In the event of such service upon the Secretary of the State of the State of Delaware or the successors of such officer, such service shall be mailed to the principal office of Aspen Group at 301 Kindermack Road, Suite A-2, Westwood, NJ 07675.
|
Elite Nutritional Brands, Inc. | |||
a Florida Company | |||
|
By:
|
||
Don Ptalis, CEO |
Aspen Group, Inc. | |||
a Delaware Corporation | |||
|
By:
|
||
Don Ptalis, CEO |
|
By:
|
/s/ Don Ptalis | |
Authorized Officer | |||
Name: | Don Ptalis | ||
Title: | CEO |
1.
|
Merger. Subject to the terms and conditions hereinafter set forth, Elite Nutritional Brands shall be merged with and into Aspen Group, with Aspen Group to be the surviving corporation in the merger (the “Merger”). The Merger shall be effective on the later of the date and time (the “Effective Time”) that a properly executed certificate of merger consistent with the terms of this Plan and Section 252 of the Delaware General Corporation Law (the “DGCL”) is filed with the Secretary of State of Delaware or articles of merger are filed with the Secretary of State of Florida.
|
2.
|
Principal Office of Aspen Group. The address of the principal office of Aspen Group is 301 Kindermack Road, Suite A-2, Westwood, NJ 07675.
|
3.
|
Corporate Documents. The Articles of Incorporation of Aspen Group, as in effect immediately prior to the Effective Time, shall continue to be the Articles of Incorporation of Aspen Group as the surviving corporation without change or amendment until further amended in accordance with the provisions thereof and applicable law. The Bylaws of Aspen Group, as in effect immediately prior to the Effective Time, shall continue to be the Bylaws of Aspen Group as the surviving corporation without change or amendment until further amended in accordance with the provisions thereof and applicable law.
|
4.
|
Directors and Officers. The directors and officers of Elite Nutritional Brands at the Effective Time shall be and become directors and officers, holding the same titles and positions, of Aspen Group at the Effective Time, and after the Effective Time shall service in accordance with the Bylaws of Aspen Group.
|
5.
|
Succession. At the Effective Time, Aspen Group shall succeed to Elite Nutritional Brands in the manner of and as more fully set forth in Section 259 of the DGCL and as set forth under Florida Law.
|
6.
|
Further Assurances. From time to time, as and when required by Aspen Group or by its successors and assigns, there shall be executed and delivered on behalf of Elite Nutritional Brands such deeds and other instruments, and there shall be taken or caused to be taken by it such further and other action, as shall be appropriate or necessary in order to vest or perfect in or to confer of record or otherwise in Aspen Group the title to and possession of all interests, assets, rights, privileges, immunities, powers, franchises and authority of Elite Nutritional Brands and otherwise to carry out the purposes and intent of this Plan, and the officers and directors of Aspen Group are fully authorized in the name and on behalf of Elite Nutritional Brands or otherwise to take any and all such actions and to execute and deliver and an all such deeds and other instruments.
|
7.
|
Common Stock of Elite Nutritional Brands. At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof each 2.5 shares of Florida Common Stock outstanding immediately prior thereto shall be changed and converted automatically into one fully paid and nonassessable share of Delaware Common Stock. All fractional shares shall be rounded up.
|
8.
|
Stock Certificates. At and after the Effective Time, all of the outstanding certificates which prior to that time represented shares of Florida Common Stock shall be deemed for all purposes to evidence ownership of and to represent shares of Delaware Common Stock into which the shares of the Florida Common Stock, represented by such certificates have been converted as herein provided. The registered owner on the books and records of Elite Nutritional Brands or its transfer agent of any such outstanding stock certificates shall, until such certificate shall have been surrendered for transfer or otherwise accounted to Aspen Group or its transfer agent, have and be entitled to exercise any voting and other rights with respect to and to receive any dividend and other distributions upon the shares of Florida Common Stock.
|
9.
|
Options; Warrants. Each option, warrant or other right to purchase 2.5 shares of Florida Common Stock, which are outstanding at the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into and become an option, warrant or right to purchase, respectively, one share of Delaware Common Stock as the case may be at an exercise or purchase price per share equal to the exercise or purchase price applicable to the option, warrant or other right to purchase Florida Common Stock.
|
10.
|
Common Stock of Aspen Group. At the Effective Time, the previously outstanding Ten shares of Florida Common Stock registered in the name of Elite Nutritional Brands shall, by reason of the Merger, be reacquired by Aspen Group, shall be retired and shall resume the status of authorized and unissued shares of Florida Common Stock and no shares of Florida Common Stock or other securities of Aspen Group shall be issued in respect thereof.
|
11.
|
Amendment. The Board of Directors of Elite Nutritional Brands and Aspen Group may amend this plan at any time prior to the Merger, provided that an amendment made subsequent to the adoption of the Plan by the sole shareholder of Aspen Group or the stockholders of Elite Nutritional Brands shall not (i) alter or change the amount or kinds of shares, securities, cash, property and/or rights to be received in exchange for the Delaware Common Stock or Delaware Preferred Stock (ii) alter or change any term of the articles of incorporation of Aspen Group, as surviving corporation to the Merger, or (iii) alter or change any of the terms and conditions of the plan if such alteration or change would adversely affect the holders of Delaware Common Stock or Delaware Preferred Stock.
|
12.
|
Abandonment. At any time before the Effective Time, this Plan may be terminated and the Merger contemplated hereby may be abandoned by the Board of Directors of either Elite Nutritional Brands or Aspen Group or both, notwithstanding approval of this Plan by the sole shareholder of Aspen Group or the stockholders of Elite Nutritional Brands, or both.
|
13.
|
Rights and Duties of Aspen Group. At the Effective Time and for all purposes the separate existence of Elite Nutritional Brands shall cease and shall be merged with and into Aspen Group which, as the surviving corporation, shall thereupon and thereafter possess all the rights, privileges, immunities, licenses and franchises (whether of a public or private nature) of Elite Nutritional Brands; and all property (real, personal and mixed) all debts on whatever account, all choices in action, and all and every other interest of or belonging to or due to Elite Nutritional Brands shall continue and be taken and deemed to be transferred to and vested in Aspen Group without further act or deed; and the title to any real estate or any other interest therein, vested in Elite Nutritional Brands shall not revert or be in any way impaired by reason of such Merger; and Aspen Group shall thenceforth be responsible and liable for all liabilities and obligations of Elite Nutritional Brands; and, to the extent permitted by law, any claim existing, or action or proceeding pending, by or against Elite Nutritional Brands may be prosecuted as if the Merger had not taken place, or Aspen Group may be substituted in the place of such corporation. Neither the rights of creditors nor any liens upon the property of Elite Nutritional Brands shall be impaired by the Merger. If at any time Aspen Group shall consider or be advised that any further assignment or assurances in law or any other actions are necessary or desirable to vest the title of any property or rights of Elite Nutritional Brands in Aspen Group according to the terms hereof, the officers and directors of Aspen Group are empowered to execute and make all such proper assignments and assurances and do any and all other things necessary or proper to vest title to such property or other rights in Aspen Group and otherwise to carry out the purposes of this Plan.
|
14.
|
Consent to Service of Process. Aspen Group hereby agrees that it may be served with process in the State of Delaware in any proceedings for enforcement of any obligation of Elite Nutritional Brands, as well as for enforcement of any obligation of Aspen Group arising from the Merger. Aspen group hereby irrevocably appoints the Secretary of State of the State of Delaware and the successors of such officer its attorney in fact in the State of Delaware upon whom may be served any notice, process or pleading in any action or proceeding against it to enforce against Aspen Group any obligation of Elite Nutritional Brands. In the event of such service upon the Secretary of the State of the State of Delaware or the successors of such officer, such service shall be mailed to the principal office of Aspen Group at 301 Kindermack Road, Suite A-2, Westwood, NJ 07675.
|
Elite Nutritional Brands, Inc. | |||
a Florida Company | |||
|
By:
|
||
Don Ptalis, CEO |
Aspen Group, Inc. | |||
a Delaware Corporation | |||
|
By:
|
||
Don Ptalis, CEO |
(i)
|
any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and
|
(ii)
|
any suit by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking the Company shall be entitled to recover such expenses upon a final adjudication that,
|
ELITE NUTRITIONAL BRANDS, INC. | |||
|
By:
|
/s/ Don Ptalis | |
Don Ptalis, Chief Executive Officer |
|
|
/s/ Don Ptalis | |
Don Ptalis, Chief Executive Officer |
|
FIRST:
|
The name of this Corporation: Aspen Acquisition Sub, Inc.
|
|
SECOND:
|
The address of its registered office in the State of Delaware is 1811 Silverside Road, Wilmington, DE 19810 in the County of New Castle. The name of its registered agent at such address is Vcorp Services, LLC.
|
|
THIRD:
|
The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.
|
|
FOURTH:
|
The total number of shares of capital stock which the Corporation shall have authority to issue is: 1,000 shares with $0.001 par value.
|
|
FIFTH:
|
The name and mailing address of the incorporator is Effie Stern 25 Robert Pitt Drive, Suite 204, Monsey, New York 10952.
|
|
I, THE UNDERSIGNED, for the purpose of forming a corporation under the laws of the State of Delaware, do make, file and record this Certificate, and do certify that the facts herein stated are true, and I have accordingly hereunto set my hand this March 07, 2012.
|
|
|
/s/Effie Stern | |
Effie Stern, | |||
Incorporator |
ELITE NUTRITIONAL BRANDS, INC. | |||
|
By:
|
/s/ David Johnson | |
David Johnson, President |
CORPORATION:
Aspen University Inc.
|
||
By:
|
/s/ Patrick Spada | |
Title: | Chairman | |
EXECUTIVE : | ||
/s/ Michael Mathews | ||
Michael Mathews |
Aspen University Inc. | |||||
By: | /s/ Patrick Spada | /s/ Michael Mathews | |||
Pratrick Spada
Chairman
|
Michael Mathews
|
||||
|
|
CORPORATION: | ||
Aspen University, Inc. | ||
By:
|
/s/ Michael Mathews | |
Title: | Chief Executive Officer | |
EXECUTIVE: | ||
/s/ David Garrity | ||
Signature |
Aspen University, Inc. | |||||
By: | /s/ Michael Mathews | /s/ David Garrity | |||
Michael D. Mathews,
|
David M. Garrity,
|
||||
CEO
|
CFO
|
CORPORATION: | ||||
Aspen University Inc. | ||||
By: | /s/ Patrick Spada | |||
Patrick Spada, Chairman
|
||||
|
||||
EXECUTIVE: | ||||
/s/ Brad Powers | ||||
Brad Powers |
COMPANY: | EMPLOYEE: | ||||
Aspen University Inc.
|
|||||
By: |
/s/ Patrick Spada
|
/s/ Brad Powers
|
|||
Patrick Spada, Chairman | Brad Powers | ||||
|
|
||||
|
|
CORPORATION:
Aspen University, Inc.
|
|||
|
By:
|
/s/ Michael Mathews | |
Michael Mathews
|
|||
Title | CEO | ||
EXECUTIVE | |||
Angela Siegel | |||
/s/ Angela Siegel | |||
Signature |
Aspen University, Inc. | |||||
By: |
Michael Mathews
|
/s/ Angela Siegel
|
|||
Michael D. Mathews, CEO | Angela M. Siegel, EVP, Marketing | ||||
|
|
CORPORATION: | ||
Aspen University, Inc. | ||
By: | /s/ Michael Mathews | |
Michael Mathews, Chief Executive Officer | ||
Title: | CEO | |
EXECUTIVE: | ||
Gerald B. Williams | ||
/s/ Gerald B. Williams | ||
Signature |
By: |
/s/ Michael D. Mathews
|
/s/ Gerald B. Williams
|
|||
Michael D. Mathews, CEO
|
Gerald B. Williams, President
|
If to Aspen: | Aspen University Inc. |
224 W. 30th Street | |
New York, NY 10001 | |
Attention: Mr. Michael Mathews | |
If to HEMG or Spada: | Patrick Spada |
144 Vista Drive | |
Cedar Knolls, NJ 07927 | |
ASPEN:
Aspen University Inc.
|
|||
|
By:
|
/s/ Michael Mathews | |
Michael Mathews, Chief Executive Officer
|
|||
HEMG: | |||
Higher Education Management Group, Inc | |||
By: | /s/ Patrick Spada | ||
Patrick Spada, President | |||
SPADA:
|
|||
s/ Patrick Spada | |||
Patrick Spada |
To the Company: | To the Consultant: | ||||
Aspen University Inc. | Higher Education Management Group, Inc. | ||||
224 West 30th Street | 144 Vista Drive | ||||
Suite 604 | Cedar Knolls, NJ 07927 | ||||
New York, NY 10001 | Attn: Mr. Patrick Spada | ||||
Attn: Mr. Michael Mathews |
COMPANY: | |||
Aspen University Inc. | |||
|
By:
|
/s/ Michael Mathews | |
Michael Mathews, Chief Executive Officer | |||
CONSULTANT:
|
|||
Higher Education Management Group, Inc. | |||
By: | /s/ Patrick Spada | ||
Patrick Spada, President |
Yours very truly, | |
/s/ Michael Mathews
|
|
Michael Mathews | |
Chief Executive Officer |
Higher Education Management Group, Inc. | ||
By: | /s/ Patrick Spada | |
Patrick Spada, President | ||
/s/ Patrick Spada | ||
Patrick Spada
|
Yours very truly, | |||
Michael Mathews | |||
Chief Executive Officer |
The Company: | Aspen University Inc. | |
224 W. 30th Street, Suite 604 | ||
New York, NY 10001 | ||
The Pledgor: | Higher Education Management Group, Inc. | |
c/o Patrick Spada | ||
144 Vista Drive | ||
Cedar Knolls, NJ 07927 |
COMPANY: | |||
Aspen University Inc. | |||
|
By:
|
/s/ Michael Mathews | |
Michael Mathews | |||
Chief Executive Officer | |||
PLEDGOR: | |||
Higher Education Management Group, Inc. | |||
By: | /s/ Patrick Spada | ||
Patrick Spada, President |
The Company: | Aspen University Inc.
224 W. 30th Street, Suite 604
New York, NY 10001
Attn: David Garrity, CFO
|
|
The Pledgor: | Michael D. Mathews
224 W. 30th Street, Suite 604
New York, NY 10001
|
|
Michael D’Anton, MD
224 W. 30th Street Suite 604
New York, NY 10001
|
||
John Scheiblehoffer, MD
224 W. 30th Street Suite 604
New York, NY 10001
|
COMPANY: | |
Aspen University Inc. | |
By: /s/ David Garrity | |
David Garrity
Chief Financial Officer
|
|
PLEDGOR: | |
/s/ Michael Mathews | |
Michael D. Mathews | |
/s/ Michael D’Anton | |
Michael D’Anton, MD | |
/s/ John Scheibelhoffer | |
John Scheibelhoffer, MD | |
Michael Mathews | 800,000 shares of common stock | |
John Scheibelhoffer | 680,893 shares of common stock | |
Michael D’Anton | 680,892 shares of common stock |
Sincerely, | |
/s/ David Garrity | |
David Garrity
Chief Financial Officer
|
Name | Number of Pledged Shares | |
Michael Mathews | 117,943 | |
TOTAL | 117,943 |
The Optionee: | ______________ | |
______________ | ||
______________ | ||
The Company: | Aspen Group, Inc.
224 West 30th Street, Suite 604
New York, New York 10001
Attention: Michael Mathews
|
|
with a copy to: | Michael D. Harris, Esq.
Harris Cramer LLP
3507 Kyoto Gardens Drive, Suite 320
Palm Beach Gardens, FL 33410
|
WITNESSES: | ASPEN GROUP, INC. | |
____________________________________ | By: | ____________________________ |
____________________________ | ||
____________________________ | ||
OPTIONEE: | ||
____________________________________ | __________________________________________ | |
_____________________________ |
(Social Security Number)
|
________________________________
|
Dated: _________________
|
The Optionee: | Angela Siegel | |
______________ | ||
______________ | ||
The Company: | Aspen Group, Inc.
224 West 30th Street, Suite 604
New York, New York 10001
Attention: Michael Mathews
|
|
with a copy to: | Michael D. Harris, Esq.
Harris Cramer LLP
3507 Kyoto Gardens Drive, Suite 320
Palm Beach Gardens, FL 33410
|
WITNESSES: | ASPEN GROUP, INC. | ||
______________________________________ | By: | /s/ Michael Mathews | |
Michael Mathews | |||
Chief Executive Officer | |||
OPTIONEE: | |||
______________________________________ | /s/ Angela Siegel | ||
Angela Siegel |
(Social Security Number)
|
________________________________
|
Dated: _________________
|
Sincerely, | |||
/s/ David Garrity | |||
|
|
David Garrity | |
Chief Financial Officer |
/s/ Michael Mathews | |
Michael Mathews | |
Page
|
||
Financial Statements
|
||
Report of Independent Registered Public Accounting Firm
|
F-2
|
|
Consolidated Balance Sheets as of December 31, 2011 and 2010
|
F-3
|
|
Consolidated Statements of Operations for the years ended December 31, 2011 and 2010
|
F-4
|
|
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2011 and 2010
|
F-5
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2011 and 2010
|
F-6
|
|
Notes to Consolidated Financial Statements
|
F-7
|
December 31, 2011
|
December 31, 2010
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 766,602 | $ | 294,838 | ||||
Accounts receivable, net of allowance of $47,595 and $47,934, respectively
|
847,234 | 1,064,663 | ||||||
Accounts receivable, secured - related party
|
772,793 | 780,169 | ||||||
Receivable from stockholder, secured - related party
|
2,209,960 | 2,195,084 | ||||||
Note receivable from officer, secured - related party
|
150,000 | - | ||||||
Prepaid expenses and other current assets
|
103,478 | 5,794 | ||||||
Total current assets
|
4,850,067 | 4,340,548 | ||||||
Property and equipment, net
|
129,944 | 21,884 | ||||||
Intangible assets, net
|
1,236,996 | 494,161 | ||||||
Other assets
|
6,559 | 6,559 | ||||||
Total assets
|
$ | 6,223,566 | $ | 4,863,152 | ||||
Liabilities and Stockholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 1,094,029 | $ | 313,326 | ||||
Accrued expenses
|
167,528 | 266,116 | ||||||
Deferred revenue
|
835,694 | 890,204 | ||||||
Notes payable, current portion
|
6,383 | 30,871 | ||||||
Deferred rent, current portion
|
4,291 | 2,324 | ||||||
Total current liabilities
|
2,107,925 | 1,502,841 | ||||||
Line of credit
|
233,215 | 243,499 | ||||||
Loans payable
|
200,000 | 200,000 | ||||||
Notes payable
|
8,768 | 15,151 | ||||||
Deferred rent
|
21,274 | 25,565 | ||||||
Total liabilities
|
2,571,182 | 1,987,056 | ||||||
Commitments and contingencies - See Note 10
|
||||||||
Temporary equity:
|
||||||||
Series A preferred stock, $0.001 par value; 850,500 shares designated,
|
||||||||
850,395 and 0 shares issued and outstanding, respectively
|
809,900 | - | ||||||
Series D preferred stock, $0.001 par value; 3,700,000 shares designated,
|
||||||||
1,176,750 and 0 shares issued and outstanding, respectively
|
||||||||
(liquidation value of $1,176,750)
|
1,109,268 | - | ||||||
Series E preferred stock, $0.001 par value; 2,000,000 shares designated,
|
||||||||
1,700,000 and 0 shares issued and outstanding, respectively
|
||||||||
(liquidation value of $1,700,000)
|
1,550,817 | - | ||||||
Total temporary equity
|
3,469,985 | - | ||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $0.001 par value; 20,000,000 shares authorized
|
||||||||
Series C preferred stock, $0.001 par value; 11,411,400 shares designated,
|
||||||||
11,307,450 and 0 shares issued and outstanding, respectively
|
||||||||
(liquidation value of $11,307)
|
11,307 | - | ||||||
Series B preferred stock, $0.001 par value; 368,421 shares designated,
|
||||||||
368,411 and 0 shares issued and outstanding, respectively
|
368 | - | ||||||
Common stock, $0.001 par value; 60,000,000 shares authorized,
|
||||||||
11,837,930 and 21,000,000 issued and outstanding, respectively
|
11,838 | 21,000 | ||||||
Additional paid-in capital
|
3,275,296 | 3,850,809 | ||||||
Accumulated deficit
|
(3,116,410 | ) | (995,713 | ) | ||||
Total stockholders’ equity
|
182,399 | 2,876,096 | ||||||
Total liabilities and stockholders’ equity
|
$ | 6,223,566 | $ | 4,863,152 |
For the
|
For the
|
|||||||
Year Ended
|
Year Ended
|
|||||||
December 31, 2011
|
December 31, 2010
|
|||||||
Revenues
|
$ | 4,477,931 | $ | 3,028,699 | ||||
Revenues - related parties
|
- | 125,000 | ||||||
Total revenues
|
4,477,931 | 3,153,699 | ||||||
Costs and expenses:
|
||||||||
Instructional costs and services
|
2,493,341 | 1,759,140 | ||||||
Marketing and promotional
|
1,181,558 | 242,134 | ||||||
General and adminstrative
|
2,634,453 | 998,777 | ||||||
Depreciation and amortization
|
264,082 | 338,803 | ||||||
Total costs and expenses
|
6,573,434 | 3,338,854 | ||||||
Operating loss
|
(2,095,503 | ) | (185,155 | ) | ||||
Other income (expense):
|
||||||||
Interest income
|
2,656 | 8 | ||||||
Interest expense
|
(27,850 | ) | (18,399 | ) | ||||
Total other expense
|
(25,194 | ) | (18,391 | ) | ||||
Loss before income taxes
|
(2,120,697 | ) | (203,546 | ) | ||||
Income tax expense (benefit)
|
- | - | ||||||
Net loss
|
(2,120,697 | ) | (203,546 | ) | ||||
Cumulative preferred stock dividends
|
(87,326 | ) | - | |||||
Net loss allocable to common stockholders
|
$ | (2,208,023 | ) | $ | (203,546 | ) | ||
Loss per share:
|
||||||||
Basic and diluted
|
$ | (0.14 | ) | $ | (0.01 | ) | ||
Weighted average number of common shares outstanding:
|
||||||||
Basic and diluted
|
15,377,413 | 21,000,000 |
Preferred Stock
|
Additional
|
Total
|
||||||||||||||||||||||||||||||||||
Series B
|
Series C
|
Common Stock
|
Paid-In
|
Accumulated
|
Stockholders'
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||||||||||||||
Balance at December 31, 2009
|
- | $ | - | - | $ | - | 21,000,000 | $ | 21,000 | $ | 3,600,309 | $ | (792,167 | ) | $ | 2,829,142 | ||||||||||||||||||||
Sale of common stock contributed by majority stockholder for cash
|
- | - | - | - | - | - | 250,500 | - | 250,500 | |||||||||||||||||||||||||||
Net loss, 2010
|
- | - | - | - | - | - | - | (203,546 | ) | (203,546 | ) | |||||||||||||||||||||||||
Balance at December 31, 2010
|
- | - | - | - | 21,000,000 | 21,000 | 3,850,809 | (995,713 | ) | 2,876,096 | ||||||||||||||||||||||||||
Rescission of common shares
|
- | - | - | - | (170,100 | ) | (170 | ) | (164,830 | ) | - | (165,000 | ) | |||||||||||||||||||||||
Common shares issued as part of merger
|
- | - | - | - | 3,200,000 | 3,200 | - | - | 3,200 | |||||||||||||||||||||||||||
Treasury shares acquired for cash
|
- | - | - | - | (884,520 | ) | (885 | ) | (760,315 | ) | - | (761,200 | ) | |||||||||||||||||||||||
Conversion of convertible notes into Series B preferred shares
|
368,411 | 368 | - | - | - | - | 349,632 | - | 350,000 | |||||||||||||||||||||||||||
Conversion of common shares into Series C preferred shares
|
- | - | 11,307,450 | 11,307 | (11,307,450 | ) | (11,307 | ) | - | - | - | |||||||||||||||||||||||||
Net loss, 2011
|
- | - | - | - | - | - | - | (2,120,697 | ) | (2,120,697 | ) | |||||||||||||||||||||||||
Balance at December 31, 2011
|
368,411 | $ | 368 | 11,307,450 | $ | 11,307 | 11,837,930 | $ | 11,838 | $ | 3,275,296 | $ | (3,116,410 | ) | $ | 182,399 |
For the
|
For the
|
|||||||
Year Ended
|
Year Ended
|
|||||||
December 31, 2011
|
December 31, 2010
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$ | (2,120,697 | ) | $ | (203,546 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||
Provision for bad debts
|
21,200 | 23,379 | ||||||
Depreciation and amortization
|
264,082 | 338,803 | ||||||
Issuance of convertible notes in exchange for services rendered
|
22,000 | - | ||||||
Changes in operating assets and liabilities, net of effects of acquisition:
|
||||||||
Accounts receivable
|
196,229 | (339,313 | ) | |||||
Accounts receivable, secured - related party
|
7,376 | (111,353 | ) | |||||
Prepaid expenses and other current assets
|
(97,684 | ) | 821 | |||||
Accounts payable
|
780,703 | 105,793 | ||||||
Accrued expenses
|
(98,588 | ) | 84,802 | |||||
Deferred rent
|
(2,324 | ) | (358 | ) | ||||
Deferred revenue
|
(54,510 | ) | 516,992 | |||||
Settlement payable
|
- | (169,403 | ) | |||||
Net cash provided by (used in) operating activities
|
(1,082,213 | ) | 246,617 | |||||
Cash flows from investing activities:
|
||||||||
Cash acquired as part of merger
|
3,200 | - | ||||||
Purchases of property and equipment
|
(133,431 | ) | - | |||||
Advances to stockholder
|
(14,876 | ) | (140,939 | ) | ||||
Purchases of intangible assets
|
(981,546 | ) | (189,905 | ) | ||||
Advances to officer in exchange for promissory note
|
(388,210 | ) | - | |||||
Proceeds received from officer loan repayments
|
238,210 | - | ||||||
Net cash used in investing activities
|
(1,276,653 | ) | (330,844 | ) | ||||
Cash flows from financing activities:
|
||||||||
Proceeds from (repayments on) line of credit, net
|
(10,284 | ) | 6,753 | |||||
Principal payments on notes payable
|
(30,871 | ) | (25,399 | ) | ||||
Proceeds from sale of common stock
|
- | 250,500 | ||||||
Proceeds received from issuance of convertible notes
|
328,000 | - | ||||||
Proceeds from issuance of Series A, D and E preferred stock
|
3,469,985 | - | ||||||
Disbursements for stockholder rescissions
|
(165,000 | ) | - | |||||
Disbursements to purchase treasury shares
|
(761,200 | ) | - | |||||
Net cash provided by financing activities
|
2,830,630 | 231,854 | ||||||
Net increase in cash and cash equivalents
|
471,764 | 147,627 | ||||||
Cash and cash equivalents at beginning of year
|
294,838 | 147,211 | ||||||
Cash and cash equivalents at end of year
|
$ | 766,602 | $ | 294,838 | ||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for interest
|
$ | 34,804 | $ | 15,773 | ||||
Cash paid for income taxes
|
$ | - | $ | - | ||||
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||
Conversion of convertible notes to Series B preferred shares
|
$ | 350,000 | $ | - |
Current assets (including cash of $3,200)
|
$ | 3,200 | ||
Intangible assets
|
- | |||
Liabilities assumed
|
- | |||
Net purchase price
|
$ | 3,200 |
|
Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets;
|
|
Level 2—Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and
|
|
Level 3—Unobservable inputs that are supported by little or no market activity that are significant to the fair value of assets or liabilities.
|
Category
|
Depreciation Term
|
|
Call center equipment
|
5 years
|
|
Computer and office equipment
|
5 years
|
|
Library (online)
|
3 years
|
|
Vehicle
|
5 years
|
Category
|
Depreciation Term
|
|
Call center
|
5 years
|
|
Course curricula
|
5 years
|
December 31, 2011
|
December 31, 2010
|
|||||||
Accounts receivable
|
$ | 894,829 | $ | 1,112,597 | ||||
Less: Allowance for doubtful accounts
|
(47,595 | ) | (47,934 | ) | ||||
Accounts receivable, net
|
$ | 847,234 | $ | 1,064,663 |
December 31, 2011
|
December 31, 2010
|
|||||||
Call center
|
$ | 121,313 | $ | - | ||||
Computer and office equipment
|
38,576 | 26,458 | ||||||
Library (online)
|
100,000 | 100,000 | ||||||
Vehicle
|
39,737 | 39,737 | ||||||
299,626 | 166,195 | |||||||
Accumulated depreciation
|
(169,682 | ) | (144,311 | ) | ||||
Property and equipment, net
|
$ | 129,944 | $ | 21,884 |
December 31, 2011
|
December 31, 2010
|
|||||||
Course curricula
|
$ | 2,072,238 | $ | 2,018,147 | ||||
Call center
|
927,455 | - | ||||||
2,999,693 | 2,018,147 | |||||||
Accumulated amortization
|
(1,762,697 | ) | (1,523,986 | ) | ||||
Intangible assets, net
|
$ | 1,236,996 | $ | 494,161 |
Year Ending December 31,
|
||||
2012
|
$ | 325,461 | ||
2013
|
300,420 | |||
2014
|
258,188 | |||
2015
|
220,047 | |||
2016
|
132,880 | |||
Total
|
$ | 1,236,996 |
December 31, 2011
|
December 31, 2010
|
|||||||
Accrued compensation
|
$ | 33,930 | $ | 89,847 | ||||
Accrued settlement payable
|
40,000 | 100,000 | ||||||
Other accrued expenses
|
93,598 | 76,269 | ||||||
Accrued expenses
|
$ | 167,528 | $ | 266,116 |
December 31, 2011
|
December 31, 2010
|
|||||||
Note payable - related party originating June 15, 2009, monthly payment of interest only; interest at 18%
|
$ | - | $ | 25,000 | ||||
Note payable for vehicle, 72 monthly payments of $618; interest at 8.4% through March 2014
|
15,151 | 21,022 | ||||||
Less: Current maturities
|
(6,383 | ) | (30,871 | ) | ||||
Amount due after one year
|
$ | 8,768 | $ | 15,151 |
Year Ending December 31,
|
||||
2012
|
$ | 6,383 | ||
2013
|
6,940 | |||
2014
|
1,828 | |||
$ | 15,151 |
Year ending December 31,
|
||||
2012
|
$ | 84,206 | ||
2013
|
86,172 | |||
2014
|
88,139 | |||
2015
|
60,070 | |||
Total minimum payments required
|
$ | 318,587 |
Weighted
|
||||||||||||||||
Weighted
|
Average
|
|||||||||||||||
Average
|
Remaining
|
Aggregate
|
||||||||||||||
Number of
|
Exercise
|
Contractual
|
Intrinsic
|
|||||||||||||
Warrants
|
Shares
|
Price
|
Term
|
Value
|
||||||||||||
Balance Outstanding, December 31, 2010
|
- | - | ||||||||||||||
Granted
|
456,000 | $ | 1.00 | |||||||||||||
Exercised
|
- | - | ||||||||||||||
Forfeited
|
- | - | ||||||||||||||
Expired
|
- | - | ||||||||||||||
Balance Outstanding, December 31, 2011
|
456,000 | $ | 1.00 | 4.5 | $ | - | ||||||||||
Exercisable, December 31, 2011
|
456,000 | $ | 1.00 | 4.5 | $ | - |
For the
Year Ended
December 31, 2011
|
For the
Year Ended
December 31, 2010
|
|||||||
Current:
|
||||||||
Federal
|
$ | - | $ | - | ||||
State
|
- | - | ||||||
- | - | |||||||
Deferred:
|
||||||||
Federal
|
- | - | ||||||
State
|
- | - | ||||||
- | - | |||||||
Total Income tax expense (benefit)
|
$ | - | $ | - |
December 31, 2011
|
December 31, 2010
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss
|
$ | 1,245,807 | $ | 123,586 | ||||
Allowance for doubtful accounts
|
17,637 | 17,763 | ||||||
Intangible assets
|
(148,345 | ) | 187,111 | |||||
Property and equipment
|
(805 | ) | 776 | |||||
Deferred rent
|
9,473 | 10,335 | ||||||
Total deferred tax assets
|
1,123,767 | 339,571 | ||||||
Valuation allowance:
|
||||||||
Beginning of year
|
(339,571 | ) | (264,144 | ) | ||||
(Increase) decrease during year
|
(784,196 | ) | (75,427 | ) | ||||
Ending balance
|
(1,123,767 | ) | (339,571 | ) | ||||
Net deferred tax asset
|
$ | - | $ | - |
For the
|
For the
|
|||||||
Year Ended
|
Year Ended
|
|||||||
December 31, 2011
|
December 31, 2010
|
|||||||
Statutory U.S. federal income tax rate
|
34.0 | % | 34.0 | % | ||||
State income taxes, net of federal tax benefit
|
3.1 | 3.1 | ||||||
Other
|
(0.1 | ) | - | |||||
Change in valuation allowance
|
(37.0 | ) | (37.1 | ) | ||||
Effective income tax rate
|
0.0 | % | 0.0 | % |
For the
|
For the
|
|||||||
Year Ended
|
Year Ended
|
|||||||
December 31, 2011
|
December 31, 2010
|
|||||||
Customer 1
|
44.6 | % | 50.1 | % | ||||
Totals
|
44.6 | % | 50.1 | % |
December 31, 2011
|
December 31, 2010
|
|||||||
Customer 1
|
53.4 | % | 29.1 | % | ||||
Customer 2
|
17.3 | % | - | % | ||||
Customer 3
|
- | 30.3 | % | |||||
Customer 4 | - | 20.2 | % | |||||
Totals
|
70.7 | % | 79.6 | % |
For the
|
For the
|
|||||||
Year Ended
|
Year Ended
|
|||||||
December 31, 2011
|
December 31, 2010
|
|||||||
Vendor 1
|
24.4 | % | 38.8 | % | ||||
Totals
|
24.4 | % | 38.8 | % |
Aspen
|
Aspen Group, Inc.
F/K/A |
|||||||||||||||||
University
|
Elite Nutritional
|
|||||||||||||||||
Inc.
|
Brands, Inc.
|
Adj
|
Pro Forma
|
Pro Forma
|
||||||||||||||
(Historical)
|
(Historical)
|
# |
Adjustments
|
Combined
|
||||||||||||||
Assets
|
||||||||||||||||||
Current assets:
|
||||||||||||||||||
Cash and cash equivalents
|
$ | 766,602 | $ | 1,489 | A | $ | 10,000 | $ | 778,091 | |||||||||
Accounts receivable
|
847,234 | - | 847,234 | |||||||||||||||
Accounts receivable, secured - related party
|
772,793 | - | 772,793 | |||||||||||||||
Receivable from stockholder, secured - related party
|
2,209,960 | - | 2,209,960 | |||||||||||||||
Note receivable from officer, secured - related party
|
150,000 | - | 150,000 | |||||||||||||||
Prepaid expenses and other current assets
|
103,478 | - | 103,478 | |||||||||||||||
Total current assets
|
4,850,067 | 1,489 | 10,000 | 4,861,556 | ||||||||||||||
Property and equipment, net
|
129,944 | - | 129,944 | |||||||||||||||
Intangible assets, net
|
1,236,996 | - | 1,236,996 | |||||||||||||||
Other assets
|
6,559 | - | 6,559 | |||||||||||||||
Total assets
|
$ | 6,223,566 | $ | 1,489 | $ | 10,000 | $ | 6,235,055 | ||||||||||
Liabilities and Stockholders’ Equity (Deficiency) | ||||||||||||||||||
Current liabilities:
|
||||||||||||||||||
Accounts payable
|
$ | 1,094,029 | $ | 3,703 | $ | - | $ | 1,097,732 | ||||||||||
Accrued expenses
|
167,528 | 178 | 167,706 | |||||||||||||||
Deferred revenue
|
835,694 | - | 835,694 | |||||||||||||||
Notes payable, current portion
|
6,383 | 10,000 | A | 10,000 | 26,383 | |||||||||||||
Deferred rent, current portion
|
4,291 | - | 4,291 | |||||||||||||||
Total current liabilities
|
2,107,925 | 13,881 | 10,000 | 2,131,806 | ||||||||||||||
Line of credit
|
233,215 | - | 233,215 | |||||||||||||||
Loans payable
|
200,000 | 491 | 200,491 | |||||||||||||||
Notes payable
|
8,768 | - | 8,768 | |||||||||||||||
Deferred rent
|
21,274 | - | 21,274 | |||||||||||||||
Total liabilities
|
2,571,182 | 14,372 | 10,000 | 2,595,554 | ||||||||||||||
Temporary equity:
|
||||||||||||||||||
Series A preferred stock
|
809,900 | - | C | (809,900 | ) | - | ||||||||||||
Series D preferred stock
|
1,109,268 | - | C | (1,109,268 | ) | - | ||||||||||||
Series E preferred stock
|
1,550,817 | - | C | (1,550,817 | ) | - | ||||||||||||
Total temporary equity
|
3,469,985 | - | (3,469,985 | ) | - | |||||||||||||
Stockholders’ equity (deficiency):
|
||||||||||||||||||
Series C preferred stock
|
11,307 | - | C | (11,307 | ) | - | ||||||||||||
Series B preferred stock
|
368 | - | C | (368 | ) | - | ||||||||||||
Common stock
|
11,838 | 12,240 | B | (7,344 | ) | 35,275 | ||||||||||||
D | 18,541 | |||||||||||||||||
Additional paid-in capital
|
3,275,296 | 8,760 | B | 7,344 | 6,754,519 | |||||||||||||
C | 3,481,660 | |||||||||||||||||
D | (18,541 | ) | ||||||||||||||||
Accumulated deficit
|
(3,116,410 | ) | (33,883 | ) | (3,150,293 | ) | ||||||||||||
Total stockholders’ equity (deficiency)
|
182,399 | (12,883 | ) | 3,469,985 | 3,639,501 | |||||||||||||
Total liabilities and stockholders’ equity (deficiency)
|
$ | 6,223,566 | $ | 1,489 | $ | 10,000 | $ | 6,235,055 |
Aspen
|
Aspen Group, Inc.
F/K/A |
|||||||||||||||||||
University
|
Elite Nutritional
|
|||||||||||||||||||
Inc.
|
Brands, Inc.
|
Adj
|
Pro Forma
|
Pro Forma
|
||||||||||||||||
(Historical)
|
(Historical)
|
# |
Adjustments
|
Combined
|
||||||||||||||||
Revenues
|
$ | 4,477,931 | $ | - | - | $ | 4,477,931 | |||||||||||||
Costs and expenses:
|
||||||||||||||||||||
Instructional costs and services
|
2,493,341 | - | 2,493,341 | |||||||||||||||||
Marketing and promotional
|
1,181,558 | - | 1,181,558 | |||||||||||||||||
General and adminstrative
|
2,634,453 | 20,159 | 2,654,612 | |||||||||||||||||
Depreciation and amortization
|
264,082 | - | 264,082 | |||||||||||||||||
Total costs and expenses
|
6,573,434 | 20,159 | 6,593,593 | |||||||||||||||||
Operating loss
|
(2,095,503 | ) | (20,159 | ) | (2,115,662 | ) | ||||||||||||||
Other income (expense):
|
||||||||||||||||||||
Interest income
|
2,656 | - | 2,656 | |||||||||||||||||
Interest expense
|
(27,850 | ) | (178 | ) | (28,028 | ) | ||||||||||||||
Total other expense
|
(25,194 | ) | (178 | ) | (25,372 | ) | ||||||||||||||
Loss before income taxes
|
(2,120,697 | ) | (20,337 | ) | (2,141,034 | ) | ||||||||||||||
Income tax expense (benefit)
|
- | - | - | |||||||||||||||||
Net loss
|
(2,120,697 | ) | (20,337 | ) | (2,141,034 | ) | ||||||||||||||
Cumulative preferred stock dividends
|
(87,326 | ) | - | (87,326 | ) | |||||||||||||||
Net loss allocable to common stockholders
|
$ | (2,208,023 | ) | $ | (20,337 | ) | $ | (2,228,360 | ) | |||||||||||
Loss per share:
|
||||||||||||||||||||
Basic and diluted (E)(F)
|
$ | (0.07 | ) | |||||||||||||||||
Weighted average number of common shares outstanding:
|
||||||||||||||||||||
Basic and diluted (E)(F)
|
32,667,421 |
(A)
|
On December 12, 2011, subsequent to the historical balance sheet date presented and prior to the reverse merger, AGI received $10,000 of proceeds in exchange for a convertible promissory note payable.
|
(B)
|
On February 14, 2012, AGI completed a 1-for-2.5 reverse split whereby each 2.5 issued and outstanding shares of AGI common stock, par value of $0.0001 per share were converted into 1 share of AGI (leaving 48,960,000 common shares).
|
(C)
|
Upon closing of reverse merger, all series of AUI preferred shares were automatically converted to 13,677,274 common shares.
|
(D)
|
To adjust AGI stockholders’ equity (deficiency) accounts to reflect the effects of the recapitalization, including 9,760,000 common shares of existing AGI stock (net of 39,200,000 common shares retired at date of reverse merger) and the conversion of all outstanding common shares of AUI into 25,515,204 common shares (includes 13,677,274 common shares from (C) above) of AGI at par value of $0.001.
|
(E)
|
Pro forma basic and diluted loss per common share is based on the weighted average number of common shares which would have been outstanding during the period if the recapitalization had occurred at January 1, 2011, and reflects the exchange of the Series A through Series E preferred stock as well as the common stock of AUI for common stock of AGI. The shares of preferred stock have been included in the calculation of basic and diluted loss per common share as if they had been converted to common shares on the date issued.
|
(F)
|
Pro forma weighted average shares include the retention of 9,760,000 shares of common stock by prior shareholders of AGI as if such shares were issued on January 1, 2011. In computing pro forma diluted net loss per share, no effect has been given to common shares issuable upon conversion of the $20,000 of convertible notes as the effect would be anti-dilutive. Such convertible notes are convertible at a conversion price equal to the next equity offering of the Company.
|
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PRO FORMA COMBINED BALANCE SHEET (USD $)
|
Dec. 31, 2011
|
|||||||
---|---|---|---|---|---|---|---|---|
Assets | ||||||||
Cash and cash equivalents | $ 778,091 | [1] | ||||||
Accounts receivable | 847,234 | |||||||
Accounts receivable, secured - related party | 772,793 | |||||||
Receivable from stockholder, secured - related party | 2,209,960 | |||||||
Note receivable from officer, secured - related party | 150,000 | |||||||
Prepaid expenses and other current assets | 103,478 | |||||||
Total current assets | 4,861,556 | |||||||
Property and equipment, net | 129,944 | |||||||
Intangible assets, net | 1,236,996 | |||||||
Other assets | 6,559 | |||||||
Total assets | 6,235,055 | |||||||
Liabilities and Stockholders’ Equity (Deficiency) | ||||||||
Accounts payable | 1,097,732 | |||||||
Accrued expenses | 167,706 | |||||||
Deferred revenue | 835,694 | |||||||
Notes payable, current portion | 26,383 | [1] | ||||||
Deferred rent, current portion | 4,291 | |||||||
Total current liabilities | 2,131,806 | |||||||
Line of credit | 233,215 | |||||||
Loans payable | 200,491 | |||||||
Notes payable | 8,768 | |||||||
Deferred rent | 21,274 | |||||||
Total liabilities | 2,595,554 | |||||||
Temporary equity: | ||||||||
Series A preferred stock | 0 | [2] | ||||||
Series D preferred stock | 0 | [2] | ||||||
Series E preferred stock | 0 | [2] | ||||||
Total temporary equity | 0 | |||||||
Stockholders’ equity (deficiency): | ||||||||
Series C preferred stock | 0 | [2] | ||||||
Series B preferred stock | 0 | [2] | ||||||
Common stock | 35,275 | [3] | ||||||
Additional paid-in capital | 6,754,519 | [3] | ||||||
Accumulated deficit | (3,150,293) | |||||||
Total stockholders’ equity (deficiency) | 3,639,501 | |||||||
Total liabilities and stockholders’ equity (deficiency) | $ 6,235,055 | |||||||
|
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PRO FORMA COMBINED STATEMENT OF OPERATIONS (USD $)
|
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2011
|
||||||
Pro Forma Combined Statement Of Operations | ||||||
Revenues | $ 4,477,931 | |||||
Costs and expenses: | ||||||
Instructional costs and services | 2,493,341 | |||||
Marketing and promotional | 1,181,558 | |||||
General and administrative | 2,654,612 | |||||
Depreciation and amortization | 264,082 | |||||
Total costs and expenses | 6,593,593 | |||||
Operating loss | (2,115,662) | |||||
Other income (expense): | ||||||
Interest income | 2,656 | |||||
Interest expense | (28,028) | |||||
Total other expense | (25,372) | |||||
Loss before income taxes | (2,141,034) | |||||
Income tax expense (benefit) | 0 | |||||
Net loss | (2,141,034) | |||||
Cumulative preferred stock dividends | (87,326) | |||||
Net loss allocable to common stockholders | $ (2,228,360) | |||||
Loss per share: | ||||||
Basic and diluted | $ (0.07) | [1],[2] | ||||
Weighted average number of common shares outstanding: | ||||||
Basic and diluted | 32,788,573 | [1],[2] | ||||
|
Document and Entity Information
|
12 Months Ended |
---|---|
Dec. 31, 2011
|
|
Document And Entity Information | |
Entity Registrant Name | ASPEN GROUP, INC. |
Entity Central Index Key | 0001487198 |
Document Type | 8-K |
Document Period End Date | Dec. 31, 2011 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |