Aspen Group Reports Second Consecutive Quarter of Net Income for First Quarter Fiscal 2026

Second consecutive quarter of net income of $0.4 million Revenue increased to $11.4 million, led by growth from USUDisciplined cost controls deliver operating income of $0.7 millionPositive Adjusted EBITDA of $1.9 million as compared to $0.4 millionThird consecutive quarter of positive operating cash flow of $0.4 million PHOENIX, Oct. 31, 2025 (GLOBE NEWSWIRE) -- Aspen Group, Inc. (OTCQB: ASPU) (“AGI” or the “Company”), an education technology holding company, today announced financial results for its first quarter of fiscal year 2026, ended July 31, 2025. First Quarter Fiscal Year 2026 Summary Results Three Months Ended July 31,$ in millions, except per share data 2025 2024 Revenue$11.4 $11.3 Gross Profit1$8.4 $7.5 Gross Margin (%)1 73% 66%Net Income (Loss)$0.4 $(0.1)Earnings (Loss) per Share - Basic$0.01 $(0.01)Earnings (Loss) per Share - Diluted$0.01 $(0.01)EBITDA2$1.4 $1.0 Adjusted EBITDA2$1.9 $0.4 _______________________ 1 GAAP gross profit calculation includes marketing and promotional costs, instructional costs and services, and amortization expense of $0.4 million and $0.5 million, respectively for the three months ended July 31, 2025 and 2024. 2 Non-GAAP financial measures. See reconciliations of GAAP to non-GAAP financial measures under "Non-GAAP–Financial Measures" starting on page 4. Michael Mathews, Chairman and CEO of AGI, stated: “This quarter, we continued to maintain revenue stability while also making further progress executing cost controls to strengthen Aspen Group’s financial foundation. Our restructuring initiatives are expected to deliver additional quarterly general and administrative savings of approximately $1.5 million by the third quarter of Fiscal 2026. Our cost control initiatives also resulted in the continuation of positive operating cash flow, building from our success in Fiscal 2025.” Mr. Mathews added, “These actions enhance our liquidity and position us to strategically reinvest in marketing to boost enrollment. While the regulatory review of the merger between Aspen University and United States University continues, we remain confident in our ability to expand student resources and achieve positive operating cash flow in fiscal year 2026.” Fiscal Q1 2026 Financial and Operational Results (compared to Fiscal Q1 2025) Revenue increased by 1% to $11.4 million compared to $11.3 million. The following table presents the Company’s revenue, both per subsidiary and total: Three Months Ended July 31, 2025 $ Change % Change 2024AU$4,285,868 $(506,036) (11)% $4,791,904USU 7,154,598 617,665 9% 6,536,933Revenue$11,440,466 $111,629 1% $11,328,837 Aspen University's (“AU”) revenue decline of $0.5 million, or 11%, is the result of lower post-licensure enrollments from the effect of decreased marketing spend initiated late in Q1 Fiscal 2023. United States University (“USU”) revenue was up 9% compared to the prior year period. MSN-FNP program enrollments increased sequentially due to strong organic leads during the quarter. Additionally, USU’s performance was supported by strong demand from existing students returning from inactive status and higher revenue per student driven by more students entering their second year of the MSN-FNP program, which includes clinical rotations, and by tuition increases. GAAP gross profit increased by $0.8 million to $8.4 million. Consolidated gross margin was 73% compared to 66%, AU's gross margin was 70% versus 61%, and USU's gross margin was 76% versus 71%. GAAP gross profit and gross margin increased primarily due to higher revenue at USU related to increased revenue per student combined with reduced cost of revenue at AU and USU driven by increased efficiencies in the use of faculty. AU instructional costs and services represented 25% of AU revenue, and USU instructional costs and services represented 22% of USU revenue. AU marketing and promotional costs represented 1% of AU revenue, while USU marketing and promotional costs represented less than 1% of USU revenue. The following tables present the Company’s net income (loss), both per subsidiary and total: Three Months Ended July 31, 2025 Consolidated AGI Corporate AU USUNet income (loss)$406,805 $(2,457,170) $323,725 $2,540,250Net income per share– Basic$0.01 Net income per share – Diluted$0.01 Three Months Ended July 31, 2024 Consolidated AGI Corporate AU USUNet (loss) income$(127,864) $(2,131,705) $(74,782) $2,078,623Net loss per share - Basic$(0.01) Net loss per share - Diluted$(0.01) The following tables present the Company’s Non-GAAP measures, both per subsidiary and total. See reconciliations of GAAP to non-GAAP financial measures under “Non-GAAP–Financial Measures” starting on page 4. Three Months Ended July 31, 2025 Consolidated AGI Corporate AU USUEBITDA$1,394,277 $(2,078,673) $777,955 $2,694,995 EBITDA Margin 12% NM 18% 38%Adjusted EBITDA$1,876,457 $(2,047,440) $1,002,955 $2,920 942 Adjusted EBITDA Margin 16% NM 23% 41% NM – Not meaningful Three Months Ended July 31, 2024 Consolidated AGI Corporate AU USUEBITDA$1,039,102 $(1,706,887) $529,054 $2,216,935 EBITDA Margin 9% NM 11% 34%Adjusted EBITDA$447,615 $(2,322,995) $316,446 $2,454,164 Adjusted EBITDA Margin 4% NM 7% 38% Adjusted EBITDA improved by $1.4 million primarily due to increased revenue per student at USU, increased instructional efficiencies at AU and USU and a decrease in general and administrative costs attributed to our restructurings. Operating Metrics New Student Enrollments On a Company-wide basis, new student enrollments increased 6% year-over-year. Sequentially, new student enrollments increased due to continued strong organic lead flow, existing students returning from inactive status, and students enrolling in advance of Q2 Fiscal 2026 price increases. New student enrollments were negatively impacted by the on-going maintenance level of marketing spend. As a result of the restructurings and increased instructional efficiencies, we anticipate the resumption of marketing spend in the second half of Fiscal 2026 at a level necessary to provide enrollments needed to grow the student body and allow for the generation of positive operating cash flow. New student enrollments for the past five quarters are shown below: Q1'25 Q2'25 Q3'25 Q4'25 Q1'26Aspen University413 508 359 350 533USU410 442 196 258 338Total823 950 555 608 871 Total Active Student Body AGI's active degree-seeking student body for the past five quarters, including AU and USU, is shown below: Q1'25 Q2'25 Q3'25 Q4'25 Q1'26Aspen University4,145 3,827 3,564 3,375 3,140USU2,477 2,560 2,475 2,434 2,369Total6,622 6,387 6,039 5,809 5,509 Nursing Students AGI’s nursing student body for the past five quarters is shown below: Q1'25 Q2'25 Q3'25 Q4'25 Q1'26Aspen University3,198 2,948 2,745 2,606 2,418USU2,254 2,300 2,297 2,254 2,210Total5,452 5,248 5,042 4,860 4,628 Liquidity The Fiscal Q1 2026 ending unrestricted cash balance was $0.5 million. As of October 24, 2025, the Company had $0.6 million of unrestricted cash on hand. In Q2 Fiscal 2026, we implemented a fifth restructuring plan, that will result in additional cash benefits for the Company starting in Q3 Fiscal 2026. The restructuring resulted in the elimination of approximately 75 positions within AU and AGI. The resulting additional on-going quarterly compensation-related savings will be approximately $1.5 million beginning in Q3 Fiscal 2026. Our restructuring efforts were designed to achieve positive annual operating cash flows, which will permit the resumption of marketing spend at a level that we expect will renew growth in our post-licensure nursing student body. In Fiscal Q1 2026, we had positive cash flow from operations of $0.4 million. Cost reductions associated with the restructuring plans and other corporate cost reductions ensure that the Company will have sufficient cash to meet its working capital needs for the next 12 months. Non-GAAP – Financial Measures This press release includes both financial measures in accordance with Generally Accepted Accounting Principles, or GAAP, as well as non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should be viewed as supplemental to, and should not be considered as alternatives to net income (loss), operating income (loss), and cash flow from operating activities, liquidity or any other financial measures. They may not be indicative of the historical operating results of AGI nor are they intended to be predictive of potential future results. Investors should not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP. Our management uses and relies on EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin, which are non-GAAP financial measures. We believe that management, analysts, and shareholders benefit from referring to the following non-GAAP financial measures to evaluate and assess our core operating results from period-to-period after removing the impact of items that affect comparability. Our management recognizes that the non-GAAP financial measures have inherent limitations because of the excluded items described below. We have included a reconciliation of our non-GAAP financial measures to the most comparable financial measures calculated in accordance with GAAP. We believe that providing the non-GAAP financial measures, together with the reconciliation to GAAP, helps investors make comparisons between AGI and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measure and the corresponding GAAP measure provided by each company under applicable SEC rules. AGI defines Adjusted EBITDA as EBITDA excluding: (1) provision for credit losses; (2) stock-based compensation; and (3) non-recurring charges. The following table presents a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA and of net income (loss) margin to the Adjusted EBITDA margin: Three Months Ended July 31, 2025 2024 Net income (loss)$406,805 $(127,864)Interest expense, net 310,391 347,170 Tax expense (benefit) 7,419 (208)Depreciation and amortization 669,662 820,004 EBITDA 1,394,277 1,039,102 Provision for credit losses 450,000 450,000 Stock-based compensation 32,180 210,091 Severance — 50,707 Lease modifications — (523,298)Change in fair value of put warrant liability — (820,987)Non-recurring charges - Other — 42,000 Adjusted EBITDA$1,876,457 $447,615 Net income (loss) Margin 4% (1)%EBITDA Margin 12% 9%Adjusted EBITDA Margin 16% 4% The following tables present a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA and of Net income (loss) margin to the Adjusted EBITDA margin by business unit: Three Months Ended July 31, 2025 Consolidated AGI Corporate AU USUNet income (loss)$406,805 $(2,457,170) $323,725 $2,540,250Interest expense, net 310,391 310,391 — —Taxes 7,419 83 7,336 —Depreciation and amortization 669,662 68,023 446,894 154,745EBITDA 1,394,277 (2,078,673) 777,955 2,694,995Provision for credit losses 450,000 — 225,000 225,000Stock-based compensation 32,180 31,233 — 947Adjusted EBITDA$1,876,457 $(2,047,440) $1,002,955 $2,920,942 Net income Margin4% NM 8% 36%Adjusted EBITDA Margin16% NM 23% 41% ________________________________NM - Not meaningful Three Months Ended July 31, 2024 Consolidated AGI Corporate AU USUNet income (loss)$(127,864) $(2,131,705) $(74,782) $2,078,623 Interest expense, net 347,170 347,170 — — Taxes (208) 92 — (300)Depreciation and amortization 820,004 77,556 603,836 138,612 EBITDA 1,039,102 (1,706,887) 529,054 2,216,935 Provision for credit losses 450,000 — 225,000 225,000 Stock-based compensation 210,091 201,754 6,865 1,472 Severance 50,707 3,125 36,825 10,757 Lease modifications (523,298) — (523,298) — Change in fair value of put warrant liability (820,987) (820,987) — — Non-recurring charges - Other 42,000 — 42,000 — Adjusted EBITDA$447,615 $(2,322,995) $316,446 $2,454,164 Net income (loss) Margin(1)% NM (2)% 32%Adjusted EBITDA Margin4% NM 7% 38% Definitions Adjusted EBITDA Margin – is defined as Adjusted EBITDA divided by revenue. We believe Adjusted EBITDA margin is useful for management, analysts and investors as this measure allows for a more meaningful comparison between our performance and that of our competitors. Adjusted EBITDA margin has certain limitations in that it does not take into account the impact to our consolidated statement of operations of certain expenses. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including the expected general and administrative savings to be achieved by the third quarter of the fiscal year ending April 30, 2026 (“Fiscal 2026”), increased marketing spend, and achieving positive operating cash flow for Fiscal 2026. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Important factors that could cause actual results to differ from those in the forward-looking statements include the continued demand of nursing students for the new programs, student attrition, national and local economic factors including the impact of tariffs, competition from nursing schools in local markets, the competitive impact from the trend of major non-profit universities using online education and consolidation among our competitors, the impact, if any from the current U.S. government shutdown, and our ability to refinance our outstanding convertible debentures. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. About Aspen Group, Inc. Aspen Group, Inc. is an education technology holding company that leverages its infrastructure and expertise to allow its two universities, Aspen University and United States University, to deliver on the vision of making college affordable again. Investor Relations Contact Kim RogersManaging DirectorHayden IR385-831-7337 Kim@HaydenIR.com GAAP Financial StatementsASPEN GROUP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS July 31, 2025 April 30, 2025 (Unaudited) Assets Current assets: Cash and cash equivalents$480,581 $736,871 Restricted cash 338,002 338,002 Accounts receivable, net of allowance of $6,199,996 and $5,731,139, respectively 16,896,190 17,167,346 Prepaid expenses 373,052 443,366 Other current assets 1,127,150 518,171 Total current assets 19,214,975 19,203,756 Property and equipment: Computer equipment and hardware 897,124 894,251 Furniture and fixtures 1,974,271 1,974,271 Leasehold improvements 5,621,087 5,621,087 Instructional equipment 529,299 529,299 Software 7,704,341 7,527,066 16,726,122 16,545,974 Less: accumulated depreciation and amortization (10,546,264) (9,907,309)Total property and equipment, net 6,179,858 6,638,665 Goodwill 5,011,432 5,011,432 Intangible assets, net 7,900,000 7,900,000 Courseware and accreditation, net 239,037 256,994 Long-term contractual accounts receivable 21,068,679 19,846,823 Operating lease right-of-use assets, net 6,882,871 7,250,407 Deposits and other assets 654,403 657,850 Total assets$67,151,255 $66,765,927 (Continued) ASPEN GROUP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS (CONTINUED) July 31, 2025 April 30, 2025 (Unaudited) Liabilities and Stockholders’ Equity Liabilities: Current liabilities: Accounts payable$2,735,862 $2,055,173 Accrued expenses 2,608,147 2,483,520 Advances on tuition 1,730,416 2,235,332 Deferred tuition 2,683,072 2,535,533 Due to students 2,152,303 2,115,581 Current portion of long-term debt 6,751,104 2,000,000 Operating lease obligations, current portion 2,926,379 2,811,471 Other current liabilities 713,245 185,296 Total current liabilities 22,300,528 16,421,906 Long-term debt, net — 5,224,524 Operating lease obligations, less current portion 11,630,856 12,398,678 Put warrants liabilities 1,427,521 1,427,521 Other long-term liabilities 327,402 327,402 Total liabilities 35,686,307 35,800,031 Commitments and contingencies Stockholders’ equity: Preferred stock, $0.001 par value; 1,000,000 shares authorized, 10,000 issued and 10,000 outstanding at both July 31, 2025 and April 30, 2025 10 10 Common stock, $0.001 par value; 85,000,000 shares authorized, 29,080,778 and 28,389,531 issued and outstanding at July 31, 2025 and April 30, 2025, respectively 29,081 28,390 Additional paid-in capital 122,244,089 122,152,533 Accumulated deficit (90,808,232) (91,215,037)Total stockholders’ equity 31,464,948 30,965,896 Total liabilities and stockholders’ equity$67,151,255 $66,765,927 ASPEN GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited) Three Months Ended July 31, 2025 2024 (Unaudited) (Unaudited)Revenue$11,440,466 $11,328,837 Operating expenses: Cost of revenue (exclusive of depreciation and amortization shown separately below) 2,685,052 3,347,225 General and administrative 6,911,137 7,327,334 Provision for credit losses 450,000 450,000 Depreciation and amortization 669,662 820,004 Total operating expenses 10,715,851 11,944,563 Operating income (loss) 724,615 (615,726) Other income (expense): Interest expense (310,391) (347,170)Change in fair value of put warrant liability — 820,987 Other income, net — 13,837 Total other (expense) income, net (310,391) 487,654 Income (loss) before income taxes 414,224 (128,072) Income tax expense (benefit) 7,419 (208) Net income (loss) 406,805 (127,864) Dividends attributable to preferred stock (42,345) (141,152) Net income (loss) available to common stockholders$364,460 $(269,016) Net income (loss) per share attributable to common stockholders: Basic$0.01 $(0.01)Diluted$0.01 $(0.01) Weighted average number of common stock outstanding: Basic 29,073,583 25,929,218 Diluted 38,451,820 25,929,218 ASPEN GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OFCASH FLOWS(Unaudited) Three Months Ended July 31, 2025 2024 (Unaudited) (Unaudited)Cash flows from operating activities: Net income (loss)$406,805 $(127,864)Adjustments to reconcile net income (loss) to net cash provided by operating activities: Provision for credit losses 450,000 450,000 Depreciation and amortization 669,662 820,004 Stock-based compensation 32,180 151,341 Change in fair value of put warrant liability — (820,987)Amortization of warrant-based cost — 7,000 Amortization of debt issuance costs 26,580 — Non-cash lease benefit (225,313) (124,497)Changes in operating assets and liabilities: Accounts receivable (1,400,700) 481,156 Prepaid expenses 70,314 (6,001)Other current assets (608,979) 368,529 Deposits and other assets 3,447 19,419 Accounts payable 680,689 (196,066)Accrued expenses 124,627 219,262 Due to students 36,722 (138,529)Advances on tuition and deferred tuition (357,377) (1,267,356)Other current liabilities 527,951 402,493 Net cash provided by operating activities 436,608 237,904 Cash flows from investing activities: Purchases of courseware and accreditation (12,750) (20,580)Purchases of property and equipment (180,148)) (289,906)Net cash used in investing activities (192,898) (310,486) Cash flows from financing activities: Repayment of portion of 15% Senior Secured Debentures (500,000) (150,000)Net cash used in financing activities (500,000) (150,000) (Continued) ASPEN GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)(Unaudited) Three Months Ended July 31, 2025 2024 (Unaudited) (Unaudited)Net decrease in cash, cash equivalents and restricted cash$(256,290) $(222,582)Cash, cash equivalents and restricted cash at beginning of period 1,074,873 2,619,427 Cash, cash equivalents and restricted cash at end of period$818,583 $2,396,845 Supplemental disclosure of cash flow information: Cash paid for interest$310,391 $345,413 Cash paid (refunds) for income taxes$7,419 $(208) Supplemental disclosure of non-cash investing and financing activities: Accrued dividends$42,345 $141,152 The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the accompanying consolidated balance sheet to the total amounts shown in the accompanying unaudited consolidated statements of cash flows: July 31, 2025 2024 (Unaudited) (Unaudited)Cash and cash equivalents$ 480,581 $ 1,308,843 Restricted cash 338,002 1,088,002 Total cash, cash equivalents and restricted cash$ 818,583 $ 2,396,845

Aspen Group Reports Second Consecutive Quarter of Net Income for First Quarter Fiscal 2026

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