PRELIMINARY PROXY STATEMENT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.)

Aspen Group, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

PRELIMINARY PROXY STATEMENT

Aspen Group, Inc.

276 Fifth Avenue, Suite 505

New York, New York, 10001

(646) 448-5144

NOTICE OF ANNUALSPECIAL MEETING OF STOCKHOLDERSSHAREHOLDERS

To the stockholdersshareholders of Aspen Group, Inc.:

We are pleased to invite you to attend the 2020 Annuala Special Meeting of the StockholdersShareholders (the “Annual“Special Meeting”) of Aspen Group, Inc., a Delaware corporation (the “Company”), which will be held at 9:30 a.m., local time on December 21, 2020July 6, 2022 at the Company’s offices located at 4615 E. Elwood Street, Phoenix, Arizona 85040, for the following purposes:

1.

Elect eight members of the Board of Directors for a one-year term expiring at the next annual meeting of stockholders;

2.

Approve an amendment to the Aspen Group, Inc. 2018 Equity Incentive Plan to increase the number of shares of common stock authorized for issuance thereunder from 1,100,000 to 1,600,000 shares;

3.

Ratify the selection of Salberg & Company, P.A. as the Company’s independent registered public accounting firm for the fiscal year ending April 30, 2021;

4.

Approve on a non-binding advisory basis the compensation of the Company’s named executive officers;

5.

Approve on a non-binding advisory basis the frequency with which the stockholders shall vote to approve executive compensation;

6.

Approve an adjournment of the Annual Meeting to a later date or time, if necessary, to permit further solicitation and vote of proxies if there are not sufficient votes at the time of the Annual Meeting to approve any of the proposals presented for a vote at the Annual Meeting; and

7.

Transact such other business as may properly come before the Annual Meeting.

The Company’s Executive Committee of the Board of Directors (the “Board”) has fixed the close of business on October 30, 2020May 12, 2022 as the date (the “Record Date”) for a determination of the stockholdersshareholders entitled to notice of, and to vote at, the AnnualSpecial Meeting or any adjournment or postponement thereof.

Important notice regarding the availability of proxy materials for the AnnualSpecial Meeting

to be held on December 21, 2020.

We mailed the Notice of Internet Availability of Proxy Materials on or about November 9, 2020.July 6, 2022: The Notice and Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended April 30, 2020, as amended, are available at: https://at www.proxyvote.com.

This Notice of Special Meeting and the accompanying proxy statement and form of proxy are first being mailed on or about May 23, 2022 to our shareholders of record entitled to vote at the Special Meeting.

If You Plan to Attend

Please note that space limitations make it necessary to limit attendance to stockholders.shareholders. Registration and seating will begin at 9:0030 a.m., local time. Shares can be voted at the Annual Meetingmeeting only if the holder is present in person or is represented by valid proxy.

For admission to the Annual Meeting,meeting, each stockholdershareholder may be asked to present valid picture identification, such as a driver’s license or passport, and proof of stock ownership as of the Record Date, such as the enclosed proxy card or a brokerage statement reflecting stock ownership. Cameras, recording devices and other electronic devices will not be permitted at the meeting.

If you do not plan on attending the meeting, please vote your shares via the internet, by phone or by signing and dating the enclosed proxy and return it in the business envelope provided. Your vote is very important.

Dated: November 9, 2020May 23, 2022

Whether or not you expect to attend in person, we urge you to vote your shares at your earliest convenience. This will ensure the presence of a quorum at the Annual Meeting.meeting. Promptly voting your shares via the Internet, by phone or by signing, dating, and returning the enclosed proxy card will save us the expenses and extra work of additional solicitation. An addressed envelope for which no postage is required if mailed in the United States is enclosed if you wish to vote by mail. Submitting your proxy now will not prevent you from voting your shares at the meeting if you desire to do so, as your proxy is revocable at your option. Your vote is important, so please act today!

We have retained Innisfree M&A Incorporated (“Innis”) to assist in proxy solicitation for the Special Meeting. Should you have any questions or require assistance in attending the Special Meeting or submitting your proxy, you can contact Innis toll-free at the number set forth below:

Aspen Group, Inc.

(646) 448-5144

Table of Contents

i

Aspen Group, Inc.

276 Fifth Avenue, Suite 505

New York, New York, 10001

(646) 448-5144

ANNUALSPECIAL MEETING OF STOCKHOLDERSSHAREHOLDERS

PROXY STATEMENT

This proxy statement (the “Proxy Statement”)Proxy Statement is being sent to the holders of shares of voting stockCommon Stock of Aspen Group, Inc., a Delaware corporation (“AGI” or the “Company”) in connection with the solicitation of proxies by our Board of Directors (the “Board”) for use at the 2020 Annuala Special Meeting of StockholdersShareholders of the Company (the “Annual Meeting”) which will be held at 9:30 a.m., local time on December 21, 2020July 6, 2022 at the Company’s offices of Aspen Group, Inc. located at 4615 E. Elwood Street, Phoenix, Arizona 85040. We mailed the85040 (the “Special Meeting”). The Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to accessSpecial Meeting and this Proxy Statement and form of proxy are first being mailed on or about May 23, 2022 to our Annual Report on Form 10-K for the fiscal year ended April 30, 2020 (the “2020 Fiscal Year”), as amended by Amendment No. 1 on Form 10-K/A filed on July 14, 2020, to the stockholdersshareholders of record entitled to vote at the Annual Meeting on or about November 9, 2020.Special Meeting.

Who is entitled to vote?vote at the Special Meeting?

The Executive Committee of the Board has fixed the close of business on October 30, 2020May 12, 2022 as the record date (the “Record Date”) for a determination of the stockholdersshareholders entitled to notice of, and to vote at, the AnnualSpecial Meeting. As of the Record Date, there were 24,435,28625,202,278 shares of common stockCommon Stock, par value $0.001 per share of the Company outstanding. Each share of the Company’s common stockCommon Stock represents one vote that may be voted on each matter that may come before the AnnualSpecial Meeting. There are no shares of preferred stock, par value $0.001 per share (“Preferred Stock”) outstanding.

What matters will be voted on at the Special Meeting?

The two proposals that are entitledscheduled to vote.be considered and voted on at the Special Meeting are as follows:

1.       Approve an increase in the number of authorized shares of Common Stock from 40,000,000 shares to 60,000,000 shares (the “Authorized Share Increase”), and approve a corresponding amendment to the Company’s certificate of incorporation, as amended, to effect the Authorized Share Increase (together, the “Authorized Share Increase Proposal”); and

2.       Approve the adjournment of the Special Meeting to a later date or time, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve the Authorized Share Increase (the “Adjournment Proposal”).

What are the Board’s voting recommendations?

The Board of Directors recommends that you vote “FOR” the Authorized Share Increase Proposal and “FOR” the Adjournment Proposal.

Why does the Company need to hold this vote?

The purpose of the Authorized Share Increase is to provide for a sufficient reserve of authorized but unissued shares of Common Stock to enable the Company to (i) permit the issuance of Common Stock underlying and comply with the reserve requirements under outstanding derivative securities convertible into or exercisable or exchangeable for shares of Common Stock, (ii) allow for future grants which may be made under the Company’s 2018 Equity Compensation Plan, and (iii) give the Board the ability to issue shares of Common Stock or derivative securities, if and when the Board deems it appropriate to enter into strategic transactions or raise capital. See “Purpose of the Authorized Share Increase” on page 7 for more information on the purpose and potential effects of the proposed Authorized Share Increase.

What is the difference between holding shares as a record holder and as a beneficial owner?

If your shares are registered in your name with the Company’s transfer agent, Action Stock Transfer Corporation, the Company’s transfer agent, you are the “record holder” of those shares. If you are a record holder, the Notice hasthese proxy materials have been provided directly to you by the Company.

If your shares are held in a stock brokerage account, a bank or other holder of record, you are considered the “beneficial owner” of those shares held in “street name.” If your shares are held in street name, the Notice hasthese proxy materials have been forwarded to you by that organization. As the beneficial owner, you have the right to instruct this organization on how to vote your shares.

Who may attend the meeting?Special Meeting?

Record holders and beneficial owners may attend the AnnualSpecial Meeting. If your shares are held in street name, you will need to bring a copy of a brokerage statement or other documentation reflecting your stock ownership as of the Record Date. Please see below thefor instructions on how to vote at the AnnualSpecial Meeting if your shares are held in street name.

How do I vote?

Record Holder:Holder

If you vote by Internet or phone, please DO NOT mail your proxy card.

Beneficial Owner (Holding Shares in Street Name):

What constitutes a quorum?

To carry on the business of the AnnualSpecial Meeting, we must have a quorum. A quorum is present when a majority of the outstanding shares of stock entitled to vote, as of the Record Date, are represented in person or by proxy. Shares owned by the Company are not considered outstanding or considered to be present at the AnnualSpecial Meeting. Broker non-votes (because there are routine matters presented at the Annual Meeting) and abstentions are counted as present for the purpose of determining the existence of a quorum.

What happens if the Company is unable to obtain a quorum is not present at the Annual Meeting?quorum?

If a quorum is not present to transact business at the scheduled time of the AnnualSpecial Meeting then Mr. Michael Mathews, our Chief Executive Officer and Chairman of the Board, or Dr. Cheri St. Arnauld, our Chief Academic Officer, are authorized to adjourn the Annual Meeting until a quorum is present or represented.

What is a “broker non-vote”?

If your shares are held in street name, you must instruct the organization which holds your shares how to vote your shares. If youif we do not provide voting instructions, your shares will not be voted on any non-routine proposal. This vote is called a “broker non-vote.” Broker non-votes do not count as a vote “FOR” or “AGAINST” anyreceive sufficient votes in favor of the proposals submitted to a vote at the Annual Meeting.

If you are a stockholder of record, and you sign and return a proxy card without giving specific voting instructions, the proxy holders will vote your shares in the manner recommended by the Board on all matters presented in this Proxy Statement anddate of the Special Meeting, the persons named as proxies may propose one or more adjournments of the proxy holders may determine in their discretion with respectSpecial Meeting to any other matters properly presented for a vote at the Annual Meeting. If your shares are held in street name and you do not provide specific voting instructions to the organization that holds your shares, the organization may generally vote at its discretion on routine matters, but not on non-routine matters. If you sign your proxy card but do not provide instructions on how your broker should vote, your broker will vote your shares as recommended by the Board on any non-routine matter.permit solicitation of proxies.

Which proposals are considered “routine” or “non-routine”?

Proposals 2, 3 and 6 are routine;

Proposals 1, 4 and 5 are non-routine.

How many votes are needed for each proposal to pass, is broker discretionary voting allowed and what is the effect of abstentions and broker non-votes?pass?

What if I am a beneficial owner and I do not give my nominee voting instructions?

If your shares are held in street name, you must instruct the organization that holds your shares how to vote. Such organization is bound by the rules of the New York Stock Exchange, or NYSE, regarding whether or not it can exercise discretionary voting power for any particular proposal in the absence of voting instructions from you. Brokers have the authority to vote shares for which their customers do not provide voting instructions on certain “routine” matters. A broker non-vote occurs when a nominee who holds shares for another does not vote on a particular matter because the nominee does not have discretionary voting authority for that item and has not received instructions from the owner of the shares or when a broker for its own internal reasons elects not to vote uninstructed shares. Broker non-votes are included in the calculation of the number of votes deemed present at the meeting for purposes of determining the presence of a quorum.

The table below sets forth, for each proposal, whether a nominee organization can exercise discretion and vote your shares absent your instructions and if not, the impact of such broker non-vote on the approval of the proposal.

———————

*If you do not provide voting instructions, your shares will not be voted on any non-routine proposal. Proposals 1 and 2 are considered “routine” proposals, so broker discretionary voting is permitted under NYSE Rules for each proposal. However, while broker discretionary voting is permitted for these proposals, an increasing number of brokers and similar organizations which hold shares in street name have elected to either refrain from discretionary voting or engage in a form of proportionate voting such as voting shares in a manner consistent with all other votes cast at the meeting. As a result, while broker discretionary voting could result in a vote “FOR” Proposals 1 or 2 for some or all instances in which a beneficial shareholder declines to provide instructions for voting his, her or its shares, we cannot predict what the ultimate outcome will be as it depends on the organization which has custody of the shares in each such case.

What is the effect of abstentions?

What are the voting procedures?

In voting by proxy with regard to the election of directors, you may vote in favor of all nominees, withhold your votes as to all nominees, or withhold your votes as to specific nominees. With regard to the remaining proposals, youYou may vote in favor of each proposal or against each proposal, or in favor of some proposals and against others, or you may abstain from voting on any of these proposals. When voting on the “say-on-frequency” proposal, you may indicate whether the say-on-pay advisory vote on executive compensation shall be held every one, two or three years, or you  may abstain from voting. If none of the three frequency options receives a majority of the votes cast, the frequency that receives the most votes will be deemed the frequency approved by the stockholders. You should specify your respective choices on the accompanying proxy card or your voting instruction form.

Is my proxy revocable?

You may revoke your proxy and reclaim your right to vote up to and including the day of the AnnualSpecial Meeting by giving written notice to the Corporate Secretary of the Company, by delivering a proxy card dated after the date of the previously mailed proxy card or by voting in person at the AnnualSpecial Meeting. All written notices of revocation and other communications with respect to revocations of proxies should be addressed to: Aspen Group, Inc., 276 Fifth Avenue, Suite 505, New York, New York 10001, Attention: Corporate Secretary.

Who is paying for the expenses ofinvolved in preparing and mailing this proxy statement?

All of the expenses involved in preparing, assembling and mailing thethese proxy materials for the Annual Meeting and all costs of soliciting proxies will be paid by the Company. In addition to the solicitation by mail, proxies may be solicited by the Company’s officers and regular employees by telephone or in person. Such persons will receive no compensation for their services other than their regular salaries. Arrangements will also be made with brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of the shares held of record by such persons, and we may reimburse such persons for reasonable out of pocket expenses incurred by them in so doing. We have retained Innisfree M&A Incorporated to assist in proxy solicitation for an estimated fee of $15,000 plus disbursements, reimbursable expenses and processing and service costs. If you have any questions or require any assistance in voting your shares, please call Innisfree M&A Incorporated, toll-free, at (877) 800-5195.

What happens if additionalCould other matters are presentedbe decided at the AnnualSpecial Meeting?

Other than the items of business described in this Proxy Statement, we are not aware of anyAuthorized Share Increase Proposal and the Adjournment Proposal, no other business tomatters will be acted uponpresented for action by the shareholders at the AnnualSpecial Meeting. If you submit a signed proxy card, the persons named as proxy holders will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting. If for any reason any of the Company’s nominees are not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by the Board.

What is “householding” and how does it affect me?

Record holders who have the same address and last name will receive only one copy of their proxy materials, unless we are notified that one or more of these record holders wishes to continue receiving individual copies. This procedure will reduce the Company’s printing costs and postage fees. StockholdersShareholders who do not participate in householding will continue to receive separate proxy cards.

If you are eligible for householding, but you and other record holders with whom you share an address, receive multiple copies of these proxy materials, or if you hold the Company’s stockCommon Stock in more than one account, and in either case you wish to receive only a single copy of each of these documents for your household, please contact the Company’s Corporate Secretary at: Aspen Group, Inc., 276 Fifth Avenue, Suite 505, New York, New York 10001, Attention: Corporate Secretary.

If you participate in householding and wish to receive a separate copy of these proxy materials, or if you do not wish to continue to participate in householding and prefer to receive separate copies of these documents in the future, please contact the Company’s Corporate Secretary as indicated above. Beneficial owners can request information about householding from their brokers, banks or other holders of record.

Do I have dissenters’ (appraisal) rights?

Appraisal rights are not available to the Company’s stockholdersshareholders with any of the proposals brought before the AnnualSpecial Meeting.

Interest of Officers and Directors in Matters to Be Acted Upon

None of the officers or directors have any interest in any of the matters to be acted upon at the Special Meeting.

Can a stockholdershareholder present a proposal to be considered at the 2022 Annual Meeting?

For a stockholdershareholder proposal to be considered for inclusion in the Company’s Proxy Statement and proxy card for the next annual meetingAnnual Meeting of stockholdersShareholders pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 (the “Exchange Act”) the following is required:

·

Our Corporate Secretary must receive the written proposal not later than July 12, 2021, which is 120 calendar days prior to the one-year anniversary of the date the Company’s proxy materials were released to stockholders in connection with the Annual Meeting. Such proposals also must comply with the regulations of the Securities and Exchange Commission (the “SEC”) under Rule 14a-8 regarding the inclusion of stockholder proposals in company sponsored materials.

·

Our Bylaws include advance notice provisions that require stockholders who desire to recommend or nominate individuals for election as directors or who wish to present a proposal at the next annual meeting to do so in accordance with the terms of the advance notice provisions. For a stockholder proposal or a director nomination that is not intended to be included in the Company’s Proxy Statement and proxy card under Rule 14a-8, our Corporate Secretary must receive the written proposal not later than the close of business on the 120th day (or July 12, 2020) nor earlier than the close of business on the 150th day (or June 12, 2020) prior to the one year anniversary of the date on which the Company released its proxy materials to its stockholders for the Annual Meeting; provided, however, that in the event that the date of the next annual meeting of stockholders is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of this year’s Annual Meeting, for notice by the stockholder to be timely, such stockholder’s written notice must be delivered to the secretary not later than the close of business on the 90th day prior to the next Annual Meeting or the 10th day following the day on which public announcement of the date of such meeting is first made, whichever is later. Your notice must contain the specific information set forth in our Bylaws.

·

Additionally, you must be a record holder at the time you deliver your notice to the Corporate Secretary and be entitled to vote at the next annual meetingAnnual Meeting of stockholders.Shareholders.

A nomination or other proposal will be disregarded if it does not comply with the above procedures. All proposals and nominations should be sent to Aspen Group, Inc., 276 Fifth Avenue, Suite 505, New York, New York 10001, Attention: Corporate Secretary.

We reserve the right to amend the Company’s Bylaws and any change will apply to the next Annual Meeting unless otherwise specified in the amendment.

The Board Recommends that the StockholdersShareholders Vote “FOR” Proposals 1 2, 3, 4 and 6 and “FOR” three years on Proposal 5.2.

PROPOSAL 1. ELECTION OF DIRECTORSTHE AUTHORIZED SHARE INCREASE PROPOSAL

The Board currently consistshas approved, and is asking shareholders to approve an increase in the number of eight directors. authorized shares of Common Stock 40,000,000 shares to 60,000,000 shares (the “Authorized Share Increase”) and a corresponding amendment to the Certificate of Incorporation to effect the Authorized Share Increase (the “Proposed Amendment”).

Approval of the Proposed Amendment requires the affirmative vote of the holders of a majority of the outstanding shares of Common Stock. At the close of business on the Record Date, there were 25,202,278 shares of Common Stock outstanding. There are no shares of Preferred Stock outstanding.

Purpose of the Authorized Share Increase

The termspurpose of allthe Authorized Share Increase is to enable the Company to effect potential future issuances under outstanding derivative securities which are convertible into or exercisable or exchangeable for, shares of the Company’s current directors will expireCommon Stock. Under its Certificate of Incorporation, the Company is currently authorized to issue up to 40,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock. As of the close of business on the Record Date, there were 25,202,278 shares of Common Stock issued and outstanding and no shares of Preferred Stock issued and outstanding. There are also 14,514,529 shares of Common Stock reserved for issuance pursuant to (i) outstanding stock options, restricted stock units (“RSUs”) and restricted stock under equity incentive plans, (ii) outstanding warrants, (iii) outstanding convertible notes and (iv) future awards which may be made under the Aspen Group, Inc. 2018 Equity Incentive Plan, leaving a balance of 283,193 shares of Common Stock available for issuance. This includes shares of Common Stock issuable upon conversion of $10 million of convertible notes which the Company issued in an offering which closed on March 14, 2022. These notes, which subject to prior conversion or repayment mature in March 2027, are convertible into shares of the Common Stock at the Annual Meeting. Onlender’s option at a conversion price of $1.00 per share any time after the recommendationissuance date. In addition, the notes are mandatorily convertible into shares of Common Stock, should the closing price of the Corporate GovernanceCommon Stock be at least $2.00 per share for 30 consecutive trading days and Nominating Committee,certain other conditions be met. This mandatory conversion is subject to each lender’s 9.9% beneficial ownership limitation and is also subject to the Nasdaq combined 19.99% requirement which generally provides that a listed issuer may not issue 20% or more of its outstanding Common Stock or voting power in a non-public offering at below a minimum price unless the Company’s shareholders first approve such issuance.

Given the above outstanding securities and agreements to which the Company is or may become subject, and the nominal amount of shares remaining available for issuance after giving effect to the foregoing, the Board has nominated the following current directors: (i) Michael Mathews, (ii) Frank J. Cotroneo, (iii) Norman D. Dicks, (iv) C. James Jensen, (v) Andrew Kaplan, (vi) Douglas Kass, (vii) Michael Koehneman, and (viii) Sanford Rich for election at the Annual Meeting.  Directors arebelieves it to be elected by a plurality vote to serve untilin the next annual meeting of stockholdersbest interest of the Company and until their successors have been duly elected and qualified.

If all of the director nominees named in this Proxy Statement are elected at the Annual Meeting the Board will consist of eight directors. The proxies cannot be voted for a greater number of persons thanto increase the number of shares of Common Stock the director nominees namedCompany is authorized to issue in this Proxy Statement.

order to enable the Company to comply with its contractual obligations while also giving the Company greater flexibility in addressing its future general corporate needs, including, but not limited to, the offer and sale of Common Stock in one or more registered public offerings, the grant of awards under equity incentive plans, and issuance of shares of capital stock in strategic transactions or to raise capital. The Board recommends a vote “FOR”believes that additional authorized shares of capital stock will also enable the electionCompany to take timely advantage of market conditions and favorable acquisition opportunities that may become available to the Company. Subject to reserve requirements under outstanding derivative securities, the authorized but unissued shares of Common Stock will be issued at the direction of the Board, without shareholder approval unless required by applicable law or Nasdaq Rules.

Compensation Programs

We have historically compensated our employees with RSUs and/or stock options in addition to salaries and other forms of cash compensation.

Our non-employee directors receive compensation for their service as directors and members of committees of the Board, which has historically been granted at the end of each calendar year and consisted of cash and/or stock awards. Our non-employee directors can elect to receive restricted stock instead of all or a portion of their cash compensation for service as directors. Compensation for service on committees of the director nominees.Board is paid in shares of Common Stock.

DIRECTOR NOMINEES

Set forth below is the information providedIf approved by the director nominees regarding their experienceshareholders, the Proposed Amendment will enable the Company to continue to compensate its directors in equity awards under its compensation programs.

Rights of Additional Authorized Shares

Any newly authorized shares of Common Stock will have the same rights as the shares of Common Stock now authorized and qualifications. Alloutstanding. The Proposed Amendment will not affect the rights of current holders of Common Stock, none of whom have preemptive or similar rights to acquire the newly authorized shares.

Potential Adverse Effects of the nomineesProposed Amendment

The Board has no current plans to issue any additional shares of Common Stock following the effectiveness of the Proposed Amendment. Adoption of the Proposed Amendment alone will not have any immediate dilutive effect on the proportionate voting power or other rights of the Company’s existing shareholders. However, any issuance of Common Stock at the direction of the Board or otherwise in the future, generally without obtaining shareholder approval (unless specifically required by applicable law or Nasdaq Rules) may, among other things, result in dilution to our shareholders at the time such additional shares are currently serving as directorsissued.

Additionally, an increase in the number of authorized shares of Common Stock may make it more difficult to, or discourage an attempt to, obtain control of the Company and have consented to serve as directors if elected atby means of a takeover bid that the Annual Meeting.

Director Biographies

Michael Mathews has served as the Company’s Chief Executive Officer and a director since March 2012. He served as Chief Executive Officer of Interclick, Inc. (“Interclick”) (Nasdaq: ICLK) from August 28, 2007 until January 31, 2011. From June 2007 until it was acquired by Yahoo, Inc. (Nasdaq: YHOO) in December 2011, Mr. Mathews also served as a director of Interclick. From May 15, 2008, until June 30, 2008, Mr. Mathews served as the interim Chief Financial Officer of Interclick. From 2004 to 2007, Mr. Mathews served as the senior vice-president of marketing and publisher services for World Avenue U.S.A., LLC, an Internet promotional marketing company. Mr. Mathews was selected to serve as a director due to his knowledge of the for profit education industry, his commitment to “making college affordable again”, his track record of success in managing early stage and growing businesses, his extensive knowledge of the Internet marketing industry and his knowledge of running and serving on the boards of public companies.

Frank J. Cotroneohas served as a director of the Company since December 2018 and as the Company’s Chief Financial Officer since December 1, 2019. Mr. CotroneoBoard determines is the founder and Chief Executive Officer of Core Business Consulting, LLC, a consulting firm, which he founded in 2004, specializing in strategic and financial planning, business development, capital restructuring, third party vendor management, enterprise resource planning and financial systems implementation, internal control improvements, risk management, and leadership development. Mr. Cotroneo has more than 30 years of business and senior management experience, including serving as the Chief Financial Officer of Acxiom Corporation (currently LiveRamp Holdings, Inc.), H&R Block and MasterCard International Inc., and serving as the Chairman of the Audit Committee of Interclick, Inc. (Nasdaq: ICLK). Mr. Cotroneo was selected to serve as a director due to his extensive senior executive management experience and accounting, internal control and financial expertise.

Norman D. Dicks has served as a director since November 17, 2016. He was a member of the United States House of Representatives for approximately 36 years. He has served as Senior Policy Advisor to law firm Van Ness Feldman LLP since 2013, advising clients on a wide-range of public policy, strategic, and regulatory issues, particularly thosenot in the environmental sector. Prior to joining the firm, Congressman Dicks represented Washington State’s 6th Congressional District from 1977 to 2013, during which time he received a first-term appointment to the House Appropriations Committee, a committee he served on for his entire tenure in Congress. In addition, Congressman Dicks served on and chaired the Interior Appropriations Subcommittee, where he made environmental issues a priority, and worked on issues affecting the National Parks, National Forests, and Native American issues. Congressman Dicks also was the chair of the Defense Appropriations Committee, and concluded his tenure in Congress as top-ranking Democratic Member on that Committee, and top-ranking Democrat on the House Appropriations Committee. From 1990 to 1998, Congressman Dicks served on the House Intelligence Committee and was awarded the CIA Directors Medal. Upon his retirement, Congressman Dicks received the Department of Defense Distinguished Public Service Medal, the highest honor bestowed upon a civilian, for his work on behalf of military members and their families. Congressman Dicks was appointed a director for his experience and expertise on a wide range of public policy, strategic and regulatory issues. Given the regulatory nature of our business, Congressman Dicks’ experience provides invaluable insight and advice to the Board and management regarding our affordable education solution to adults across America.

C. James Jensenhas served as a director of the Company since March 2012. He also serves as Chairman of the Executive Committee of the Board. He is an active member of the World Presidents’ Organization, a life director of the Institute of Noetic Sciences, and is Vice Chairman of American Global Health Group. He is also the author of the book 7 KEYS To Unlock Your Full Potential. Mr. Jensen was selected as a director due to his previous service on public company boards and his experience with entrepreneurial companies.

Andrew Kaplan has served as a director of the Company since June 2014. Since January 1, 2015, Mr. Kaplan has been a Managing General Partner in Education Growth Partners, a private equity firm focused exclusively on the education and training industry. From July 2000 through March 2014, Mr. Kaplan was a partner in Quad Partners (“Quad”) a private equity firm focused exclusively on the education industry. During his tenure with Quad, Mr. Kaplan also served as a Managing Director of Quad College Group, the operational team focused on Quad’s postsecondary portfolio. Mr. Kaplan was selected as a director for his extensive knowledge of the education industry.

Douglas Kasswas appointed as a director effective July 13, 2020. Since January, 2002 Mr. Kass has been the President of Seabreeze Partners Management, Inc., which, up to July 2013, was a hedge fund sponsor and the General Partner of Seabreeze Partners, LP. Seabreeze currently manages individual accounts. Since June 2019, Mr. Kass has served on the board of directors of MVC Capital, Inc. (NYSE: MVC), a non-diversified, closed-end management investment company. From July 2011 through May 2017, Mr. Kass served on the board of directors of Empire Resources Inc. (formerly Nasdaq: ERS), a distributor of value added, semi-finished metal products. Mr. Kass was selected as a director due to his prior experience serving on boards of directors of several organizations as well as his extensive background in finance.

Michael Koehneman was appointed as a director effective July 13, 2020. Prior to his recent retirement, Mr. Koehneman previously held various positions at Pricewaterhouse Coopers, a global accounting firm, including the Global Advisory Chief Operating Officer and Human Capital Leader from 2016 through 2019, the U.S. Advisory Operations Leader from 2005 through 2016, and the Lead Engagement Partner for Financial Statement Audits and Internal Control and Security Reviews from 1993 through 2004. Mr. Koehneman was selected as a director due to his background in accounting and technology.

Sanford Rich has served as a director of the Company since March 2012. Since January 2016 Mr. Rich has served as the Executive Director of the New York City Board of Education Retirement System. From November 2012 to January 2016, Mr. Rich served as the Chief of Negotiations and Restructuring for the Pension Benefit Guaranty Corporation (a United States Government Agency). From October 2011 to September 2012, Mr. Rich served as Chief Executive Officer of In The Car LLC. Mr. Rich served as a director of Interclick from August 28, 2007 until June 5, 2009 and as Audit Committee Chairman from August 2007 to June 2009. From February 2009 to December 2012 Mr. Rich was a Managing Director of Whitemarsh Capital Advisors, a broker-dealer. From April 2006 to April 2020, Mr. Rich has served as a director and Audit Committee Chairman for InsPro Technologies (OTCQB: ITCC). Mr. Rich was selected as a director based upon his 35 years of experience in the financial sector and his experience serving on the audit committees of public companies.

EXECUTIVE OFFICERS

See “Director Biographies” above for Messrs. Mathews’ and Cotroneo’s biographical information.

Robert Alessi has served as the Chief Accounting Officer of the Company since December 1, 2019. Previously from July 15, 2019 until that date, Mr. Alessi was the Company’s Vice President and Controller. Mr. Alessi is a Certified Public Accountant (“CPA”) in the State of New York. Prior to joining the Company, Mr. Alessi served as the Vice President and Financial Controller for Prometheus Global Media, a New York City based media company, from August 2017 through June 2019. Mr. Alessi was previously the Controller for FunctionX, Inc., a social publishing and interactive media platform from January 2017 through August 2017. Between August 2015 and December 2016, Mr. Alessi worked as a Financial Consultant for Anchor Consultants. From May 2015 through July 2015 Mr. Alessi worked for Milestone Consultants. From May 2014 through April 2015, Mr. Alessi performed part time financial consulting and accounting services. From February 2007 through April 2014 Mr. Alessi was the Vice President and Financial Controller at KCAP Financial, Inc., a Business Development Company.

Cheri St. Arnauld has been the Company’s Chief Academic Officer since June 11, 2017. Dr. St. Arnauld previously served as Aspen University’s Chief Academic Officer beginning March 6, 2014. From January 2012 until March 6, 2014, Dr. St. Arnauld was an educational consultant for the St. Arnauld Group. From 2008 to 2012, Dr. St. Arnauld was the Provost and Chief Academic Officer of Grand Canyon University.

Anne McNamara has served as the Chief Nursing Officer of the Company since October 31, 2019 and has served as Chief Nursing Officer of Aspen University Inc., our wholly-owned subsidiary, since June 2018. Dr. McNamara’s principal duties are to lead and oversee our hybrid online/campus pre-licensure BSN nursing program including its expansion. From January 2017 to date, she has been the President of McNamara Solutions, LLC, a consulting firm whose principal client was Aspen University until she became an employee. From April 2015 to December 2016, Dr. McNamara was Academic President of Galen School of Nursing. From March 2007 to October 2014, Dr. McNamara was Dean and a Professor at Grand Canyon University’s College of Nursing and Health Professions.

Gerard Wendolowski has been the Company’s Chief Operating Officer since March 11, 2014. From May 2011 until March 11, 2014, Mr. Wendolowski served as Aspen University’s Senior Vice President of Marketing and Business Development.

CORPORATE GOVERNANCE

Board Responsibilities

The Board oversees, counsels, and directs management in the long-termbest interest of the Company and its stockholders. The Board’s responsibilities include establishing broad corporate policiesshareholders. However, the Board does not deem the proposed increase in the number of authorized shares of Common Stock pursuant to the Proposed Amendment as an anti-takeover measure and reviewing the overall performanceis not aware of any attempt or plan by a third party to obtain control of the Company. The Board is not, however, involved in the operating details on a day-to-day basis. In December 2017, our Board established an Executive Committee which, subject to the limitations of Delaware law, has since performed the functions of the Board.

Board Committees and ChartersNo Appraisal Rights

The Board and its committees meet throughout the year and act by written consent from time to time as appropriate. The Board delegates various responsibilities and authority to its Board committees. Committees regularly report on their activities and actions to the Board. The Board currently has and appoints the members of the following standing committees: the Executive Committee, the Audit Committee, the Compensation Committee, the Regulatory Oversight Committee (the “Regulatory Committee”) and the Nominating and Corporate Governance Committee (the “Corporate Governance Committee”). Each of the committees, except for the Executive Committee, has a written charter approved by the Board. The charters of the Audit Committee, the Compensation Committee and the Corporate Governance Committee can be found on our corporate website at http://www.aspu.com/governance-docs.

The following table identifies the independent and non-independent current Board and committee members:

Director Independence

Our Board has determined that all the directors, with the exception of Michael Mathews, our Chief Executive Officer, and Frank J. Cotroneo, our Chief Financial Officer, are independent as such term is defined under The Nasdaq Stock Market Rules (the “Nasdaq Rules”).

Our Board has also determined that Messrs. Sanford Rich, C. James Jensen, Andrew Kaplan and Michael Koehneman meet the independence requirementsShareholders have no rights under the Nasdaq Rules and the heightened independence requirements for Audit Committee membersDelaware General Corporation Law or under the rulesour Certificate of the SEC. Also, our Board has determined that Messrs. C. James Jensen and Norman D. Dicks are independent under the Nasdaq Rules independence standards for compensation committee members.  

CommitteesIncorporation to exercise dissenters’ rights of the Board of Directors

Executive Committee

The function of the Executive Committee is to provide a committee for the Company which can approve corporate actions efficiently or in a timely fashion when the full Board is unavailable. The Executive Committee was established in December 2017.

Audit Committee

Management has the primary responsibility for the financial statements and the reporting process, including the system of internal controls. The Audit Committee reviews the Company’s financial reporting process on behalf of the Board and administers our engagement of the independent registered public accounting firm. The Audit Committee meets with the independent registered public accounting firm, with and without management present, to discuss the results of its examinations, the evaluations of our internal controls, and the overall quality of our financial reporting.

Audit Committee Financial Expert

Our Board has determined that Messrs. Rich and Koehneman are each qualified as an Audit Committee Financial Expert, as that term is defined under the rules of the SEC and in compliance with the Sarbanes-Oxley Act of 2002.

Compensation Committee

The function of the Compensation Committee is to determine the compensation of our executive officers. The Compensation Committee has the power to set performance targets for determining periodic bonuses payable to executive officers and may review and make recommendationsappraisal with respect to stockholder proposals related to compensation matters. Additionally, the Compensation Committee is responsible for administering the 2012 Equity Incentive Plan (the “2012 Plan”) and the 2018 Equity Incentive Plan (the “2018 Plan” and together, the “Plans”).

Corporate Governance Committee

The responsibilitiesapproval of the Corporate Governance Committee include the identification of individuals qualifiedProposed Amendment.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THIS PROPOSAL 1.

PROPOSAL 2. THE ADJOURNMENT PROPOSAL

The Company is asking shareholders to become Board members, the selection of nominees to stand for election as directors, the oversightapprove, if necessary, adjournment of the selection and composition of committeesSpecial Meeting to solicit additional proxies in favor of the Board, establishing proceduresAuthorized Share Increase Proposal. Any adjournment of the Special Meeting for the nomination process including procedures, oversightpurpose of possible conflictssoliciting additional proxies will allow shareholders who have already sent in their proxies to revoke them at any time prior to the time that the proxies are used.

Vote Required

The affirmative vote of interests involving the Board and its members, developing corporate governance principles, and the oversighta majority of the evaluationsvotes cast for or against this Proposal 2 is required to approve the Adjournment Proposal. Abstentions and will not be considered as votes cast under the Company’s Bylaws, and accordingly will have no effect on the outcome of the Board and management. The Corporate Governance Committee has not established a policy with regard to the consideration of any candidates recommended by stockholders. If we receive any stockholder recommended nominations, the Corporate Governance Committee will carefully review the recommendation(s) and consider such recommendation(s) in good faith.

Regulatory Committee

Since our business is highly regulated, our Board established the Regulatory Committee in October 2019 to assist the Board in meeting its fiduciary duties. Its principal role is to monitor management’s regulatory compliance and communicate with our counsel including our regulatory counsel and bring matters that may be pertinent to the attention of the Board.

Board and Committee Meetings in the 2020 Fiscal Year

In the 2020 Fiscal Year the Board had seven meetings, the Compensation Committee and the Corporate Governance Committee each had one meeting, the Regulatory Committee had one meeting, the Audit Committee had seven meetings, and the Executive Committee only acted by written consent during the 2020 Fiscal Year.

There were no directors (who were incumbent at the time) except for Malcolm MacLean (who has resigned from the Board), who attended fewer than 75 percent of the aggregate total number of Board meetings and meetings of the Board committees of which the director was a member during the 2020 Fiscal Year.

Board Diversity

While we do not have a formal policy on diversity, our Board considers diversity to include the skill set, background, reputation, type and length of business experience of our Board members as well as a particular nominee’s contributions to that mix. Our Board believes that diversity brings a variety of ideas, judgments and considerations that benefit the Company and its stockholders. Although there are many other factors, the Board seeks individuals with experience on public company boards or the investment community, accounting and financial expertise, experience on operating growing businesses, and experience with online universities.this Proposal 2.

Board Leadership Structure

We have chosen to combine the Chief Executive Officer and Board Chairman positions. We believe that this Board leadership structure is the most appropriate for the Company. Because we are a small company, it is more efficient to have the leadership of the Board in the same hands as the Chief Executive Officer. The challenges faced by us at this stage – implementing our business and marketing plans and continuing and managing our growth – are most efficiently dealt with by one person who is familiar with both the operational aspects as well as the strategic aspects of our business.

Board Risk Oversight

Our risk management function is overseen by our Board. Our management keeps its Board apprised of material risks and provides its directors access to all information necessary for them to understand and evaluate how these risks interrelate, how they affect us, and how management addresses those risks. Mr. Michael Mathews, as our Chief Executive Officer and Chairman of the Board, works closely with the Board once material risks are identified on how to best address such risks. If the identified risk poses an actual or potential conflict with management, our independent directors may conduct the assessment. Presently, the primary risks affecting us are our ability to continue growing our business, including our programs which have higher long-term values, manage our working capital together with the expansion of our hybrid campus program, increase our enrollment and class starts, and manage our expected growth consistent with regulatory oversight.

Code of Ethics

Our Board has adopted a Code of Ethics that applies to all of our employees, including our Chief Executive Officer and Chief Financial Officer. Although not required, the Code of Ethics also applies to our directors. The Code of Ethics provides written standards that we believe are reasonably designed to deter wrongdoing and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, full, fair, accurate, timely and understandable disclosure and compliance with laws, rules and regulations, including insider trading, corporate opportunities and whistleblowing or the prompt reporting of illegal or unethical behavior. We will provide a copy, without charge, to anyone that requests a copy of our Code of Ethics in writing by contacting Aspen Group, Inc., 276 Fifth Avenue, Suite 505, New York, New York 10001, Attention: Corporate Secretary.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our directors, executive officers, and persons who beneficially own more than 10% of our common stock to file initial reports of ownership and changes in ownership of our common stock and other equity securities with the SEC. These individuals are required by the regulations of the SEC to furnish us with copies of all Section 16(a) forms they file. Based solely on a review of the copies of the forms furnished to us, and written representations from reporting persons, we believe that all filing requirements applicable to our officers, directors and 10% beneficial owners were complied with during 2020 Fiscal Year except that one Form 4 for Robert Alessi reporting a grant of restricted stock units was not timely filed due to an administrative error.

Family RelationshipsTHE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THIS PROPOSAL 2.

There are no family relationships among our directors and/or executive officers.

Communication with our Board

Although we do not have a formal policy regarding communications with the Board, stockholders may communicate with the Board by writing to us at Aspen Group, Inc., 276 Fifth Avenue, Suite 505, New York, New York 10001, Attention: Corporate Secretary. Stockholders who would like their submission directed to a memberSecurity Ownership of the Board may so specify,Certain Beneficial Owners and the communication will be forwarded, as appropriate.

TRANSACTIONS WITH RELATED PERSONSManagement

Set forth below is a brief description of the transactions since May 1, 2018 in excess of $120,000 in which the Company was a participant and in which any director or executive officer of the Company, any known 5% or greater stockholder of the Company or any immediate family member of any of the foregoing persons, had a direct or indirect material interest as defined in Item 404(a) of Regulation S-K. As permitted by the SEC rules, discussion of employment relationships or transactions involving the Company’s executive officers and directors, and compensation solely resulting from such employment relationships or transactions, or service as a director of the Company, as the case may be, has been omitted to the extent disclosed in the Executive Compensation or the Director Compensation section of this Proxy Statement, as applicable.

Stock Purchase Agreement with Educaciόn Significativa

On July 18, 2018, the Company entered into a Stock Purchase Agreement with Educaciόn Significativa for the repurchase of 1,000,000 shares of the Company’s common stock at $7.40 per share. Ms. Oksana Malysheva, a then director of the Company, is the sole member and manager of Linden Education, which is the sole voting member of Educaciόn Significativa. The Company simultaneously sold 1,000,000 shares of common stock to a large asset manager at the same price or $7.40 per share.

Credit Facility Agreement

On November 5, 2018, the Company entered into an agreement (the “Credit Facility Agreement”) providing for a $5 million revolving credit facility (the “Facility”) with the Leon and Toby Cooperman Family Foundation (the “Lender”), of which Mr. Leon Cooperman, a principal shareholder of the Company, is the trustee. Borrowings under the Credit Facility Agreement are evidenced by a revolving promissory note (the “Note”) and bear interest at 12% per annum. The Facility matures on November 4, 2021. Pursuant to the terms of the Credit Facility Agreement, the Company agreed to pay to the Lender a $100,000 one-time upfront facility fee. The Company also agreed to pay to the Lender a commitment fee, payable quarterly at the rate of 2% per annum on the undrawn portion of the Facility. As of the date of this Amendment, the Company has not borrowed any sum under the Facility. Pursuant to the Credit Facility Agreement, on November 5, 2018 the Company issued to the Lender warrants to purchase 92,049 shares of the Company’s common stock exercisable for five years from the date of issuance at the exercise price of $5.85 per share (the “Warrants”). On March 6, 2019, in connection with entering into loan agreements with the Lender and another shareholder of the Company, the Company amended and restated the Credit Facility Agreement and the related revolving promissory note to grant the Lender a first priority lien in certain deposit accounts of the Company, all current and future accounts receivable of Aspen University Inc. and United States University, Inc., subsidiaries of the Company (the “Subsidiaries”), certain of the deposit accounts of the Subsidiaries and all of the outstanding capital stock of the Subsidiaries (the “Collateral”) on a pari passu basis with the other lender.

Loan Agreements

On March 6, 2019, the Company entered into a loan agreement with the Lender. Under the Loan Agreement we borrowed $5 million (the “Loan”), evidenced by a 12% term Promissory Note and Security Agreement due September 6, 2020. The loan was secured by a first priority lien in the Collateral. Concurrently with entering into the Loan Agreement, the Company entered into, and borrowed another $5 million under, a loan agreement with another stockholder of the Company, which is not a related party, on the same terms as are contained in the Loan Agreement. The Company issued 100,000 Warrants to the Lender and the other lender exercisable at $6 per share.

On January 22, 2020, the Company refinanced the Loan and the other $5 million by issuing each lender a $5 million 7% Convertible Note. The Convertible Notes were convertible at $7.15 per share and due on January 22, 2023. The Convertible Notes automatically converted into common stock if the average closing price of our common stock is at least $10.725 over a 20 consecutive trading day period. On September 14, 2020, the Company issued 1,398,602 shares of its common stock to the two holders of the Convertible Notes upon mandatory conversion of the Convertible Notes pursuant to their terms.

On June 5, 2020, the Lender exercised all of its Warrants and received 192,049 shares of common stock in exchange for a 5% discount in the exercise prices. In addition, the Lender agreed to not sell its common stock for at least six months.

Equity Awards to Executive Officers

On October 31, 2019, Dr. Anne McNamara, the Chief Nursing Officer of the Company received a grant of 50,000 RSUs. The RSUs vest on October 31, 2022, subject to continued employment as an officer of the Company as of the vesting date.

Effective December 1, 2019, Robert Alessi received a grant of 20,000 RSUs in connection with Mr. Alessi’s appointment as the Company’s Chief Accounting Officer. The RSUs vest annually over a three-year period, subject to continued employment on each applicable vesting date.

On February 4, 2020, Dr. Anne McNamara, the Chief Nursing Officer of the Company, received a grant of 50,000 RSUs. The RSUs vest four years from the grant date, subject to accelerated vesting as follows: (i) if the closing price of the Company’s common stock is at least $9 for 20 consecutive trading days, 10% of the RSUs vest immediately; (ii) if the closing price of the Company’s common stock is at least $10 for 20 consecutive trading days, 25% of the RSUs vest immediately; and (iii) if the closing price of the Company’s common stock is at least $12 for 20 consecutive trading days, all of the unvested RSUs vest immediately. Of these RSUs, 5,000 vested in August 2020 and 12,500 RSUs vested in September 2020.

On July 8, 2020, based on the recommendation of the Compensation Committee, the Board awarded discretionary bonuses, consisting each of a cash portion and an RSU portion, to Messrs. Mathews, Cotroneo and Wendolowski, and Drs. St. Arnauld and McNamara, the executive officers of the Company. See “Executive Compensation – Bonuses – Discretionary Bonuses” for further details regarding these transactions.

On August 12, 2020, Robert Alessi, the Company’s Chief Accounting Officer, received a grant of 20,000 RSUs. The RSUs vest in approximately equal annual increments over a three-year period from July 1, 2020, subject to continued service as an executive officer of the Company as of each applicable vesting date.

Additionally, the following RSUs granted to the Named Executive Officers on February 4, 2020, vested in August and September 2020 pursuant to the accelerated vesting provisions contained therein: (i) 35,000 out of 100,000 RSUs granted to Michael Mathews, Chief Executive Officer and Chairman of the Board, (ii) 26,250 out of 75,000 RSUs granted to Frank J. Cotroneo, Chief Financial Officer, (iii) 26,250 out of 75,000 RSUs granted to Dr. Cheri St. Arnauld, Chief Academic Officer, and (iv) 26,250 out of 75,000 RSUs granted to Gerard Wendolowski, Chief Operating Officer.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the number of shares of the Company’s common stockCommon Stock beneficially owned as of the Record Date by (i) those persons known by the Company to be owners of more than 5% of its common stock,Common Stock, (ii) each director, (iii) the Named Executive Officers (as disclosed in the Summary Compensation Table),defined by Rule 402(m) of Regulation S-K, and (iv) the Company’s executive officers and directors as a group. Unless otherwise specified in the notes to this table, the address for each person is: c/o Aspen Group, Inc., 276 Fifth Avenue, Suite 505, New York, New York 10001, Attention: Corporate Secretary.

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* Less than 1%.

PROPOSAL 2: APPROVAL OF AN AMENDMENT TO THE ASPEN GROUP, INC. 2018 EQUITY INCENTIVE PLAN

Overview and Purpose of the Amendment

We are asking you to approve an amendment to the 2018 Plan to increase the number of shares of common stock that the Company is authorized to issue under the 2018 Plan (the “Amendment”) from 1,100,000 shares to 1,600,000 shares. The Executive Committee has adopted a resolution approving the Amendment and submitting it to a vote by the Company’s stockholders at the Annual Meeting.

Having a sufficient number of shares under the 2018 Plan is critical to our ability to continue to attract, retain, engage and focus highly motivated and qualified employees, particularly in the competitive labor market that exists today in our industry. A copy of the Amendment is attached to this Proxy Statement as Annex A.

Interest of Officers and Directors in Matters to Be Acted Upon

All of the current directors and executive officers of the Company may in the future receive discretionary equity awards under the 2018 Plan if the Amendment is approved by the stockholders at the Annual Meeting, as stated in more detail in this Proposal 2. The Company plans to grant restricted stock or restricted stock units to directors, executive officers and employees and no longer grant stock options except to the extent otherwise provided in the offer letters to new employees. In order to encourage long-term employment, we expect that the restricted stock units or restricted stock will generally vest in equal annual increments over a period three years, subject to continued employment. The Company also has a policy of granting, subject to the approval by the Compensation Committee of the Board, vested equity to its non-employee directors late in the calendar year as compensation for services during that calendar year. See “Director Compensation” for more information on compensation of our non-employee directors.

Reasons for Seeking Stockholder Approval

We are submitting the Amendment to a vote by our stockholders at the Annual Meeting pursuant to Nasdaq Rule 5635(c), which requires stockholder approval when a stock option or purchase plan is to be established or materially amended or other equity compensation arrangement is made or materially amended, pursuant to which stock may be acquired by officers, directors, employees, or consultants of a Nasdaq-listed company.

Description of the 2018 Plan

The 2018 Plan is a broad-based plan in which all officers and employees, directors and consultants of the Company and its subsidiaries are eligible to participate. The purpose of the 2018 Plan is to further the growth and development of the Company by providing, through ownership of stock of the Company and other equity-based awards, an incentive to its officers, employees and consultants who are in a position to contribute materially to the prosperity of the Company, to increase such persons’ interests in the Company’s welfare, by encouraging them to continue their services to the Company. This plan has enabled the Company to attract individuals of outstanding ability to become employees, consultants, officers, directors and director advisors of the Company. Approval of this amendment is necessary to ensure the Company can continue to attract employees of outstanding ability. Set forth below is the summary of the material terms of the 2018 Plan.

Administration

The 2018 Plan is administered by the Compensation Committee (the “Administrator”). The Administrator has the authority to, among other things, determine the persons to whom awards under the 2018 Plan will be granted, determine the terms and conditions of each award and the time it will be granted, interpret the 2018 Plan, and promulgate and rescind any rules related to it.

Eligibility

Employees, officers, directors and consultants of the Company and its subsidiaries are eligible to receive Awards under the 2018 Plan. Only employees are eligible to receive incentive stock options (“ISOs”) as defined in the Internal Revenue Code of 1986 (the “Code”). There are currently approximately 400 eligible participants under the 2018 Plan.

Available Awards; Share Reserve

Awards that may be granted under the 2018 Plan include stock options (including ISOs and non-qualified stock options), stock appreciation rights (“SARs”), restricted stock, and restricted stock units (“RSUs”). The terms of each award are evidenced by a written agreement in the form approved by the Administrator.

The Company has previously reserved an aggregate of 500,000 shares of common stock for awards under the 2018 Plan and subsequently increased the reserve to 1,100,000 shares as approved by the stockholders in December 2019. The Company is seeking stockholder approval to increase the number of shares available for issuance under the 2018 Plan by an additional 500,000 shares, for a total of 1,600,000 shares of Common Stock. If any outstanding award expires or is canceled, forfeited, or terminated without issuance of the full number of shares of common stock to which the award related, or if the Company reacquires the unvested shares of restricted stock, the number of shares available under the 2018 Plan will be increased by the portion of the award that expired, or was canceled, forfeited or terminated, or the number of shares of unvested restricted stock so reacquired. Shares tendered in payment of the option exercise price or withheld by the Company to satisfy any tax withholding obligation, will again become available for future grants under the 2018 Plan.

Limitation on Awards

The exercise price of options or SARs granted under the 2018 Plan shall not be less than the fair market value of the underlying Common Stock at the time of grant. In the case of ISOs, the exercise price may not be less than 110% of the fair market value in the case of 10% stockholders. Options and SARs may not be exercisable for a period of more than 10 years after the date of grant, except that the exercise period of ISOs granted to 10% stockholders is limited to five years. The exercise price may be paid by check or wire transfer or, at the discretion of the Administrator, by delivery of shares of our common stock having a fair market value equal, determined as provided for in the 2018 Plan or otherwise as approved by the Administrator, as of the date of exercise to the cash exercise price, or a combination thereof.

Stock Options

Both ISOs and non-qualified stock options may be granted under the 2018 Plan. The Company currently does not expect to grant stock options in the foreseeable future. A stock option entitles the recipient to purchase a specified number of shares of common stock at a fixed price subject to terms and conditions set by the Administrator, including conditions for exercise that must be satisfied, which typically will be based solely on continued provision of services. The purchase price of shares of common stock covered by a stock option cannot be less than 100% of the fair market value of the common stock on the date the option is granted. Fair market value of the common stock is generally equal to the closing price for the common stock on the trading day immediately preceding the date of the grant.

Stock Appreciation Rights

A SAR entitles the holder to receive, as designated by the Administrator, cash or shares of common stock, in the amount equal to the excess of the fair market value of a specified number of shares of common stock at the time of exercise over the exercise price established by the Administrator.

The exercise price of each SAR granted under the 2018 Plan shall be established by the Administrator or shall be determined by method established by the Administrator at the time the SAR is granted, provided the exercise price shall not be less than 100% of the fair market value of a share of common stock on the date of the grant, or such higher price as is established by the Administrator.

Restricted Stock

A restricted stock award gives the recipient a stock award subject to restriction on sale. The Administrator determines the terms and conditions of restricted stock awards, including the number of shares of restricted stock granted, and conditions for vesting that must be satisfied, which may be based principally or solely on continued provision of services, and also may include a performance-based component. Unless otherwise provided in the applicable award agreement, the holder of a restricted stock award generally will have the rights of a stockholder from the date of the grant, including the right to vote the shares of common stock and the right to receive dividends.

RSUs

An RSU gives the recipient the right to receive a number of shares of our common stock on the applicable vesting or other dates. Delivery of the underlying common stock may be deferred beyond vesting as determined by the Administrator. The Administrator determines the terms and conditions of RSUs, including the number of units granted, and conditions for vesting that must be satisfied, which may be based principally or solely on continued provision of services, and also may include a performance-based component. The holder of an RSU award will not have voting rights with respect to the award and possesses no incidents of ownership with respect to the underlying common stock.

Term, Termination and Amendment

The Board may amend or terminate the 2018 Plan. However, except in the case of adjustments upon changes in common stock, no amendment will be effective unless approved by the stockholders of the Company to the extent that stockholder approval is necessary to satisfy the requirements of Section 422 of the Code or required by the rules of the principal national securities exchange or trading market on which our common stock trades. The 2018 Plan shall terminate on September 6, 2028, unless previously terminated by the Board.

The Board at any time, and from time to time, may amend the terms of any one or more awards under the 2018 Plan. However, the rights under the award shall not be impaired by any such amendment, except with the written consent of the grantee.

Forfeiture

All vested or unvested stock rights are immediately forfeited at the option of the Board in the event that the recipient performs certain acts against the interests of the Company including fraud, dishonesty or violation of the Company’s policy.

Adjustments upon Changes in Capitalization

The number of shares of common stock covered by each outstanding stock right, and the number of shares of common stock which have been authorized for issuance under the 2018 Plan as well as the price per share of common stock (or cash, as applicable) covered by each such outstanding award, shall be proportionately adjusted for any increases or decrease in the number of issued shares of common stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification, or any other increase or decrease in the number of issued shares of common stock effected without receipt of consideration by the Company. Such adjustment shall be made by the Administrator.

Change of Control

In the event of a change of control, the vesting of all awards will fully accelerate and all outstanding options and SARs will become immediately exercisable only if the successor corporation refuses to assume or substitute for the outstanding awards. The change of control is defined as (i) the consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets in a transaction which requires stockholder approval under applicable state law; or (ii) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

Federal Income Tax Consequences

The following is a brief summary of the principal United States federal income tax consequences with respect to awards granted under the 2018 Plan.

ISOs.The recipient does not recognize any taxable income as a result of the grant or exercise of an ISO qualifying under Section 422 of the Code. However, the exercise of an ISO may increase the recipient’s alternative minimum tax liability.

If a recipient holds stock acquired through the exercise of an ISO for more than two years from the date on which the ISO was granted and more than one year after the date the ISO was exercised, any gain or loss on a disposition of those shares, or a qualifying disposition, will be a long-term capital gain or loss. Upon such a qualifying disposition, the Company will not be entitled to any income tax deduction.

Generally, if the recipient disposes of the stock before the expiration of either of those holding periods, or a disqualifying disposition, then at the time of such disqualifying disposition the recipient will recognize ordinary income equal to the lesser of (i) the excess of the fair market value of common stock on the date of exercise over the exercise price, or (ii) the recipient’s actual gain, if any, on the purchase and sale. Any additional gain recognized by the recipient upon the disposition will be long-term or short-term capital gain or loss, depending on whether the stock was held for more than one year.

To the extent the recipient recognizes ordinary income by reason of a disqualifying disposition, generally we will be entitled to a corresponding income tax deduction in the tax year in which the disqualifying disposition occurs.

Non-Qualified Stock Options. The recipient does not recognize any taxable income as a result of a grant of a non-qualified stock option. Upon exercise of a non-qualified stock option, the recipient will recognize ordinary income in an amount equal to the difference between the fair market value of the shares on the date of exercise and the exercise price. When the shares are sold, any difference between the sale price and the fair market value of the shares on the date of exercise will generally be treated as long-term or short-term capital gain or loss, depending on whether the stock was held for more than one year.

Upon the exercise of a non-qualified stock option, the Company will be entitled to a corresponding income tax deduction in the tax year in which the option was exercised.

Restricted Stock.The recipient of a restricted stock award does not have taxable income upon receipt of the award. When the restricted stock award vests, the recipient will recognize ordinary income in an amount equal to the difference of the fair market value of the shares on the date of vesting and the amount paid for such restricted stock, if any.

Upon the vesting of a restricted stock award, the Company will be entitled to a corresponding income tax deduction in the tax year in which the restricted stock award vested.

The recipient may, however, elect under Section 83(b) of the Code to include as ordinary income in the year the shares are granted an amount equal to the excess of (i) the fair market value of the shares on the date of issuance, over (ii) the purchase price, if any, paid for the shares. If the Section 83(b) election is made, the recipient will not realize any additional taxable income when the restricted stock vests.

RSUs.RSUs do not result in any taxable income upon receipt of RSUs. When the underlying common stock is delivered (which could be on the vesting date or a later date), the recipient incurs taxable income based upon the fair market value of the common stock as of the vesting date.

SARs.A recipient does not recognize any taxable income upon the receipt of an SAR. Upon the exercise of an SAR, the recipient will recognize ordinary income in an amount equal to the excess of the fair market value of the underlying shares of common stock on the exercise date over the exercise price.

Upon the exercise of an SAR, the Company will be entitled to a corresponding income tax deduction in the tax year in which the SAR was exercised.

Transfer

Except for ISOs, all awards are transferable subject to compliance with the securities laws and the 2018 Plan. ISOs are only transferable by will or by the laws of descent and distribution.

New Plan Benefits

The amounts that will be awarded under the 2018 Plan, as amended, cannot currently be determined. Except as discussed in “Executive Compensation – Bonuses – Target Bonus”, awards granted under the 2018 Plan are within the discretion of the Compensation Committee. The equity awards to be granted under the 2018 Plan, as amended, will include among other things, equity portion of independent directors’ compensation. See “Director Compensation” for further details.  As of the date of this Proxy Statement the Compensation Committee has not determined future awards under the 2018 Plan or recipients of such awards, except as disclosed above with respect to independent directors, and no awards would have been received by or allocated to the Company’s Named Executive Officers, current executive officers, current independent directors or employees for the 2020 Fiscal Year if the 2018 Plan, as amended, had been in effect as of the end of the 2020 Fiscal Year.

Equity Compensation Plan Information

The following chart reflects the number of securities granted and the weighted average exercise price for our compensation plans as of April 30, 2020.