Response to "Can Aspen Survive?" thread - See response from Aspen CEO

Thanks,


http://www.degreeinfo.com/business-mba-degrees/41578-can-aspen-university-survive-3.html

Michael Mathews
Registered User Join Date Apr 2012 (post date 4/4/2012)

Good morning Randy, thanks for your post. This is Michael Mathews, Chairman & CEO of Aspen University. Allow me to respond to your questions, which should convince you Aspen is far from being "in deep trouble."

Based on the Form 8-K you reference, our University is now a publicly traded company (Bulletin Board: ELIT.OB), which we certainly wouldn't have just implemented if we didn't have a well thought out financial plan. If you study the balance sheet, the answer to your question should become clearer. Aspen University raised ~$3.4mm of equity in 2011, while our operating loss was ~$2mm, so we raised significantly more cash than our planned loss (in fact, 70% more cash than our loss.) Also note that the University ended the year with $776K cash on the balance sheet. Additionally, please refer to footnote #1 of the Financial Statements, in which the University discloses that since 2012 began, we raised an additional $450K of capital. Finally, we have engaged an investment bank to raise an additional $6 million of capital over the next 2 quarters.

Separately, auditors are required to express what’s called a 'going concern opinion' for any company that suffers an operating loss -- that’s standard practice.

I would welcome anyone on this forum, should you have any questions about Aspen University, to contact me directly at [email protected]
Thank you.

Michael Mathews
Chairman & CEO
Aspen University


Thanks so much for your response Mr. Mathews.

Abner

 

Borrowing $3.4 million to cover your $2.2 million loss and leaving you with $776,000 of borrowed funds leftover is not a great thing, but it's not the end of the world either. I think the CEO is trying to put a positive spin on something that's not really positive, which is what he should be doing. The economy is bad and Aspen Univ. is not the only company borrowing money to help it through these bad times. Let's hope it survives as the more competition we have the more choices we have.

 

Its true, although I don't understand high finance, but Aspen is now public: ELIT.OB: Summary for ASPEN GROUP INC- Yahoo! Finance

Love it, they are now a nutrition company? Whatever..

Maybe we should start a 'save our school' fundraising drive, as currently their stock is going for 3.75 per share! And a market cap of $132M. I guess their new tagline should be “Nutrition for your brain”

I wouldn’t let the -$2M financials or fact that there is zero volume worry you, and there is nothing weird about an online school really being a publically traded nutrition company, or a survival strategy of paying executives $250,000 each of borrowed money, this is the new American way!

I of course could be reading these docs wrong, just having a little fun.

 

The CEO explains that although there were losses, the school has enough cash to continue with the operation.

Based on his explanation, I conclude that the situation is bad but not near of bankruptcy yet.