Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On January 23, 2020, Aspen Group, Inc. (the "Company") issued $5 million convertible notes ("Convertible Notes") to each of two lenders in exchange for the two $5 million notes due under term loans entered into in 2019 (the "Term Loans"). The closing of the refinancing was conditioned upon the Company conducting an equity financing resulting in gross proceeds to the Company of at least $10 million. On January 22, 2020, the Company closed on an underwritten offering under which the net proceeds were approximately $16 million and the condition precedent to the closing of the refinancing was satisfied.

The key terms of the Convertible Notes are as follows:

·

After six months from the issuance date, the lenders have the right to convert the principal into our shares of the Company's common stock at a conversion price of $7.15 per share;

·

The Convertible Notes automatically convert into shares of the Company's common stock if the average closing price of our common stock is at least $10.725 over a 20 consecutive trading day period;

·

The Convertible Notes are due January 23, 2023 or approximately three years from the closing;

·

The interest rate of the Convertible Notes is 7% per annum (payable monthly in arrears) compared to 12% under the Term Loans; and

·

The Convertible Notes are secured in the same manner as the Term Loans.

The former notes under the Term Loans were due in September 2020 and were subject to a one-year extension and the payment of an extension fee for each note of $50,000 (total of $100,000). The Company also paid each lender $40,400 at closing of the Convertible Notes to cover taxes they will incur as part of the note exchange and will pay their legal fees arising from the re-financing. Effective upon issuance of the Convertible Notes, the existing notes under the Term Loans were cancelled and no amounts remain outstanding under the Term Loans.

In connection with refinancing of the Term Loans, on January 23, 2020, the Company also entered into an Investors/Registration Rights Agreement with the lenders whereby, upon request of the lenders on or after June 22, 2020, the Company must file and obtain and maintain the effectiveness of a registration statement registering the shares of common stock issued or issuable upon conversion of the Convertible Notes.

Item 8.01 Other Events.

On January 22, 2020, the Company closed on an underwritten offering of 2,415,000 shares of common stock, including 315,000 shares of common stock which were subject to a 30-day over-allotment option which was exercised by the underwriter. The offering was made pursuant to an effective shelf registration statement filed on Form S-3 (File No. 333-224230), and a final prospectus supplement filed with the Securities and Exchange Commission on January 21, 2020. After giving effect to the offering, the Company has 21,627,230 shares of common stock outstanding.

On January 23, 2020, the Company issued a press release announcing the closing of the refinancing and the public offering. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The press release contained a mistake relating to the mandatory conversion of the notes. The actual beginning date is July 22, 2020. The reference to 2022 was a mistake.

The information contained in this Item 8.01, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. Furthermore, the information contained in this Item 8.01 or Exhibit 99.1 shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

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Item 9.01 Financial Statements and Exhibits.




(d) Exhibits



Exhibit
  No.                                                                    Description

10.1                                                                  Form of Amended and
                                                                    Restated Convertible
                                                                    Promissory Note and
                                                                    Security Agreement
                                                                    dated January 22,
                                                                    2020

10.2                                                                  Form of Amended and
                                                                    Restated Revolving
                                                                    Promissory Note and
                                                                    Security Agreement
                                                                    dated January 22,
                                                                    2020

10.3                                                                  Form of
                                                                    Investors/Registration
                                                                    Rights Agreement dated
                                                                    January 22, 2020

99.1                                                                  Press Release dated
                                                                    January 23, 2020

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