Aspen Group Reports Revenue of $17.1 million for Second Quarter Fiscal 2023

  • Restructuring plan increases year-over-year gross margin to 60% from 51%, and narrows net loss to $(2.3) million from $(2.9) million
  • Adjusted EBITDA of $0.5 million versus $(0.7) million in prior year quarter
  • Positive operating cash flow of $1.0 million versus $(1.0) million in prior year quarter

NEW YORK, Dec. 13, 2022 (GLOBE NEWSWIRE) -- 澳门6合开彩开奖. (Nasdaq: ASPU) (鈥淎GI鈥 or the 鈥淐ompany鈥), an education technology holding company, today announced financial results for its second quarter fiscal year 2023 ended October 31, 2022.

Second Quarter Fiscal Year 2023 Summary Results

Three Months Ended October 31, Six Months Ended October 31,
2022 2021 2022 2021
$ in millions, except per share data
Revenue $ 17.1 $ 18.9 $ 36.0 $ 38.4
Gross Profit1 $ 10.2 $ 9.7 $ 18.4 $ 20.1
Gross Margin (%)1 60 % 51 % 51 % 52 %
Net Income (Loss) $ (2.3 ) $ (2.9 ) $ (6.0 ) $ (3.7 )
Earnings (Loss) per Share $ (0.09 ) $ (0.11 ) $ (0.24 ) $ (0.15 )
EBITDA2 $ (0.6 ) $ (1.9 ) $ (2.8 ) $ (1.8 )
Adjusted EBITDA2 $ 0.5 $ (0.7 ) $ (0.6 ) $ (0.2 )

_______________________听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听
1 GAAP gross profit calculation includes marketing and promotional costs, instructional costs and services, and amortization expense of $0.5 million and $0.5 million, and $1.0 million and $0.9 million for the three and six months ended October 31, 2022 and 2021, respectively.
2 Non-GAAP financial measures. See reconciliations of GAAP to non-GAAP financial measures under "Non-GAAPFinancial Measures" starting on page 5.

鈥淲e are encouraged by our second quarter results which reflect the impact of reduced marketing and general and administrative spend as part of our restructuring initiative that we launched in the prior quarter,鈥 said Michael Mathews, Chairman, and CEO of AGI. 鈥淕ross margin improved by 900 basis points on lower revenue, and we narrowed our net loss and delivered positive adjusted EBITDA. USU鈥檚 revenue grew 9%, due to continued strong demand for the MSN-FNP program, which helped to offset the expected decline in AU revenue coming from the teach-out of our BSN pre-licensure program and lower marketing spend.鈥

鈥淭he restructuring initiated in the first quarter of fiscal year 2023 reduced cash used in operations in the second quarter by $4.6 million, enabling AGI to generate positive operating cash flow of $1 million,鈥 continued Mr. Mathews. 鈥淎t the end of Q2, we issued an 8-K stating that AGI and the Arizona State Board for Private Postsecondary Education entered into a revised stipulated agreement that reduces AU鈥檚 surety bond requirement from $18.3 million to $5.5 million and requires a teach-out of the core component of the pre-licensure program, among other requirements. As a result, our surety bond provider has recently agreed to return $1.5 million of the $5 million cash previously being held as collateral, providing additional cash for operations.鈥

Mr. Mathews concluded, 鈥淎s previously stated, we engaged Lampert Capital Advisors to assist with securing an accounts receivable (AR) financing agreement. After conducting due diligence on our accounts receivable, Lampert has begun outreach to prospective lenders.鈥

Fiscal Q2 2023 Financial and Operational Results (compared to Fiscal Q2 2022)

Revenue decreased by 10% to $17.1 million compared to $18.9 million. The following table presents the Company鈥檚 revenue, both per-subsidiary and total:

Three Months Ended October 31,
2022
$ Change % Change 2021
AU $ 听听听听听听听听10,341,903 $ 听听听听听听听听(2,416,948 ) (19)% $ 听听听听听听听听12,758,851
USU 听听听听听听听听6,732,644 听听听听听听听听551,284 9% 听听听听听听听听6,181,360
Revenue $ 听听听听听听听听17,074,547 $ 听听听听听听听听(1,865,664 ) (10)% $ 听听听听听听听听18,940,211


AU revenue decreased by $2.4 million or 19% in Fiscal Q2 2023 compared to Fiscal Q2 2022, with the pre-licensure program accounting for $0.5 million of the decrease. The remainder of the decrease is primarily due to lower post-licensure enrollments attributed to lower marketing spend related to the restructuring initiated in Fiscal Q1 2023. The active student body at AU decreased from 11,184 at October 31, 2021 to 7,973 at October 31, 2022.

USU revenue increased 9% compared to Fiscal Q2 2022 due primarily to USU's MSN-FNP program, the USU post-licensure degree program with the highest concentration of students and the highest LTV. The active student body at USU decreased from 3,134 at October 31, 2021 to 2,984 at October 31, 2022.

GAAP gross profit increased 6% to $10.2 million in Fiscal Q2 2023 compared to $9.7 million Fiscal Q2 2022, and sequentially 25% from $8.2 million in Fiscal Q1 2023. The increases were primarily due to lower cost of revenue associated with the marketing spend decrease to $0.8 million in Fiscal Q2 2023, down from $4.0 million in Fiscal Q2 2022 and $4.5 million in Fiscal Q1 2023. The reduction in marketing spend is part of the Company鈥檚 Fiscal Q2 2023 restructuring initiatives.

Gross margin was 60% compared to 51% in Fiscal Q2 2022 and 43% in Fiscal Q1 2023. AU gross margin was 60% versus 50%, and USU gross margin was 67% versus 58%.

During Fiscal Q2 2023, AU instructional costs and services represented 34% of AU revenue, and USU instructional costs and services represented 29% of USU revenue. During Fiscal Q2 2023, AU marketing and promotional costs represented 2% of AU revenue, while USU marketing and promotional costs represented 3% of USU revenue.

The following tables present the Company鈥檚 net (loss) income, both per subsidiary and total:

Three Months Ended October 31, 2022
Consolidated AGI Corporate AU USU
Net (loss) income $ 听听听听听听听听(2,293,640 ) $ 听听听听听听听听(5,150,209 ) $ 听听听听听听听听1,067,885 $ 听听听听听听听听1,788,684
Net loss per share $ 听听听听听听听听(0.09 )


Three Months Ended October 31, 2021
Consolidated AGI Corporate AU USU
Net (loss) income $ 听听听听听听听听(2,852,258 ) $ 听听听听听听听听(5,059,164 ) $ 听听听听听听听听1,329,813 $ 听听听听听听听听877,093
Net loss per share $ 听听听听听听听听(0.11 )


Net loss decreased 20% to $(2.3) million in Fiscal Q2 2023 compared to a loss of $(2.9) million Fiscal Q2 2022. The decrease was primarily due to the improvement in the gross margin. Also included in the Fiscal Q2 2023 net loss are spend reductions of approximately $4.5 million related to the restructuring plan implemented in Fiscal Q2 2023 consisting of a $3.7 million decrease in marketing spend and a $0.8 million decrease is general and administrative and other spend. Offsetting the Fiscal Q2 2023 decrease in general and administrative spend related to the restructuring are increases in stock compensation costs due to the reversal of expense for performance awards in Fiscal Q1 2022 and costs related to regulatory matters. Included in the AGI net loss is interest expense of $0.7 million compared to $0.1 million. The Fiscal Q2 2023 interest expense includes a 1% commitment fee of $0.2 million on the undrawn 2022 Revolving Credit Facility, which will not repeat in subsequent quarters.

The following tables present the Company鈥檚 Non-GAAP measures, both per subsidiary and total. See reconciliations of GAAP to non-GAAP financial measures under 鈥淣on-GAAP鈥揊inancial Measures鈥 starting on page 5.

Three Months Ended October 31, 2022
Consolidated AGI Corporate AU USU
EBITDA $(603,364) $(4,362,762) $1,852,192 $1,907,206
EBITDA Margin (4)% NM 18% 28%
Adjusted EBITDA $537,339 $(3,726,004) $2,114,530 $2,148,813
Adjusted EBITDA Margin 3% NM 20% 32%


Three Months Ended October 31, 2021
Consolidated AGI Corporate AU USU
EBITDA $(1,891,060) $(4,880,535) $2,013,581 $975,894
EBITDA Margin (10)% NM 16% 16%
Adjusted EBITDA $(715,148) $(4,149,243) $2,332,308 $1,101,787
Adjusted EBITDA Margin (4)% NM 18% 18%


Operating Metrics

New Student Enrollments

New student enrollments decreased 46% year-over-year from 2,380 to 1,290. Over the past five quarters, new student enrollments were impacted by the enrollment stoppage at our pre-licensure campuses and the reduction in marketing spend.

Five quarters of new student enrollments are shown below:

New Student Quarterly Enrollments
Q2'22 Q3'22 Q4'22 Q1'23 Q2'23
Aspen University 1,750 1,301 1,010 868 784
USU 630 481 525 447 506
Total 2,380 1,782 1,535 1,315 1,290


New student enrollments, bookings and ARPU for Q2鈥23 versus Q2鈥22 are shown below (rounding differences may occur):

Second Quarter Bookings1 and Average Revenue Per Enrollment (ARPU)1
Q2'22 Enrollments
Q2'22 Bookings 1 Q2'23 Enrollments
Q2'23 Bookings 1 Percent Change Total Bookings & ARPU 1
Aspen University 1,750 $ 26,134,500 784 $ 8,450,250
USU 630 $ 11,226,600 506 $ 听听听听听听听听9,016,920
Total 2,380 $ 37,361,100 1,290 $ 17,467,170 听听听听听听听听(53 ) %
ARPU $ 15,698 $ 13,540 听听听听听听听听听听听听听听听 (14 ) %

_____________________
1 鈥淏ookings鈥 are defined by multiplying Lifetime Value (LTV) by new student enrollments for each operating unit. 鈥淎verage Revenue Per Enrollment鈥 (ARPU) is defined by dividing total Bookings by total new student enrollments for each operating unit.

Total Active Student Body

AGI's active degree-seeking student body, including AU and USU, declined 23% year-over-year to 10,957 from 14,318. AU's total active student body decreased by 29% year-over-year to 7,973 from 11,184. On a year-over-year basis, USU's total active student body decreased by 5% to 2,984 from 3,134.

Five quarters of total active student body is shown below:

Total Active Student Body by Quarter
Q2'22 Q3'22 Q4'22 Q1'23 Q2'23
Aspen University 11,184 10,736 10,225 9,133 7,973
USU 3,134 2,988 3,109 2,915 2,984
Total 14,318 13,724 13,334 12,048 10,957


Nursing Students

Students seeking nursing degrees were 9,392, or 86% of total active students at both universities. Of the students seeking nursing degrees, 8,269 are RNs studying to earn an advanced degree, including 5,517 at Aspen University and 2,752 at USU. In contrast, the remaining 1,123 nursing students are enrolled in Aspen University鈥檚 BSN Pre-Licensure program. The majority of the year-over-year Aspen University nursing student body decrease is a result of the enrollment stoppage and teach out of the pre-licensure program and the $3.1 million reduction in marketing spend in the second quarter of fiscal 2023 as compared to the same quarter of fiscal 2022.

Nursing Student Body by Quarter
Q2'22 Q3'22 Q4'22 Q1'23 Q2'23
Aspen University 9,531 9,116 8,632 7,686 6,640
USU 2,911 2,773 2,890 2,708 2,752
Total 12,442 11,889 11,522 10,394 9,392


Liquidity

At October 31, 2022, the Company had unrestricted cash of $2.3 million and restricted cash of $6.4 million. The restricted cash balance includes $5 million for an approximately $18.3听million surety bond required by the Arizona State Board for Postsecondary Education, which was reduced to $5.5 million on October 31, 2022 in a revised stipulated agreement.

In a subsequent event following the close of the quarter on October 31, 2022, the surety bond firm recently agreed to return to the Company $1.5 million of the $5 million restricted cash they were holding as collateral for the bond, which will be used for general operating purposes.

Cash flow used in operations for the six months ended October 31, 2022 was $2.6 million. Approximately $2.3 million of cash used in operations is attributed to our EBITDA loss and $0.3 million is attributed to changes in working capital primarily related to increases in short-term and long-term monthly payment plan accounts receivable and deferred revenue. Management believes the Company is positioned to generate positive operating cash flow in the second half of fiscal 2023 as a result of the restructuring plan initiated late in the first quarter of fiscal 2023.

Conference Call

澳门6合开彩开奖. will host a conference call to discuss its second quarter fiscal year 2023 results on Tuesday, December 13, 2022, at 4:30 pm ET. 澳门6合开彩开奖. will issue a press release reporting results after the market closes on that day. The conference call can be accessed by dialing toll-free (877) 704-4453 (U.S.) or (201) 389-0920 (International), passcode 13734314.

Subsequent to the call, a transcript of the audio cast will be available from the Company鈥檚 website at www.aspu.com. A dial-in replay will be available starting at 7:30 pm ET on December 13, 2022 through 11:59 pm ET on December 20, 2022, which can be accessed by dialing toll-free (844) 512-2921 (U.S.) or (412) 317-6671 (International), passcode 13734314.

For additional information on the financial statements and performance, please refer to the 澳门6合开彩开奖. Form 10-Q for the second quarter of fiscal year 2023 and Q2 2023 Financial Results Presentation published on the Company鈥檚 website at , on the Presentations page under Company Info.

Non-GAAP 鈥 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鈥檚 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 rules of the Securities and Exchange Commission (the 鈥淪EC鈥).

AGI defines Adjusted EBITDA as EBITDA excluding: (1) bad debt expense; (2) stock-based compensation; and (3) non-recurring charges.

The following table presents a reconciliation of net loss to EBITDA and Adjusted EBITDA and of net income (loss) margin to the Adjusted EBITDA margin:

Three Months Ended October 31, Six Months Ended October 31,
2022 2021 2022 2021
Net loss $ 听听听听听听听听(2,293,640 ) $ 听听听听听听听听(2,852,258 ) $ 听听听听听听听听(6,008,611 ) $ 听听听听听听听听(3,723,146 )
Interest expense, net 听听听听听听听听708,705 听听听听听听听听138,064 听听听听听听听听1,289,285 听听听听听听听听170,196
Taxes 听听听听听听听听46,501 听听听听听听听听5,900 听听听听听听听听76,822 听听听听听听听听156,910
Depreciation and amortization 听听听听听听听听935,070 听听听听听听听听817,234 听听听听听听听听1,856,178 听听听听听听听听1,596,643
EBITDA 听听听听听听听听(603,364 ) 听听听听听听听听(1,891,060 ) 听听听听听听听听(2,786,326 ) 听听听听听听听听(1,799,397 )
Bad debt expense 听听听听听听听听450,000 听听听听听听听听350,000 听听听听听听听听800,000 听听听听听听听听700,000
Stock-based compensation 听听听听听听听听458,336 听听听听听听听听722,158 听听听听听听听听504,666 听听听听听听听听1,264,870
Non-recurring charges - Severance 听听听听听听听听鈥 听听听听听听听听鈥 听听听听听听听听125,000 听听听听听听听听19,665
Non-recurring charges (income) - Other 听听听听听听听听232,367 听听听听听听听听103,754 听听听听听听听听717,299 听听听听听听听听(394,366 )
Adjusted EBITDA $ 537,339 $ 听听听听听听听听(715,148 ) $ 听听听听听听听听(639,361 ) $ 听听听听听听听听(209,228 )
Net loss Margin (13 ) % (15 ) % (17 ) % (10 ) %
Adjusted EBITDA Margin 3 % (4 ) % (2 ) % (1 ) %


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 October 31, 2022
Consolidated AGI Corporate AU USU
Net income (loss) $ 听听听听听听听听(2,293,640 ) $ 听听听听听听听听(5,150,209 ) $ 听听听听听听听听1,067,885 $ 听听听听听听听听1,788,684
Interest expense, net 听听听听听听听听708,705 听听听听听听听听710,237 听听听听听听听听(1,239 ) 听听听听听听听听(293 )
Taxes 听听听听听听听听46,501 听听听听听听听听8,350 听听听听听听听听27,776 听听听听听听听听10,375
Depreciation and amortization 听听听听听听听听935,070 听听听听听听听听68,860 听听听听听听听听757,770 听听听听听听听听108,440
EBITDA 听听听听听听听听(603,364 ) 听听听听听听听听(4,362,762 ) 听听听听听听听听1,852,192 听听听听听听听听1,907,206
Bad debt expense 听听听听听听听听450,000 听听听听听听听听鈥 听听听听听听听听225,000 听听听听听听听听225,000
Stock-based compensation 听听听听听听听听458,336 听听听听听听听听404,391 听听听听听听听听37,338 听听听听听听听听16,607
Non-recurring charges - Other 听听听听听听听听232,367 听听听听听听听听232,367 听听听听听听听听鈥 听听听听听听听听鈥
Adjusted EBITDA $ 听听听听听听听听537,339 $ 听听听听听听听听(3,726,004 ) $ 听听听听听听听听2,114,530 $ 听听听听听听听听2,148,813
Net income (loss) Margin (13 ) % NM 10 % 27 %
Adjusted EBITDA Margin 3 % NM 20 % 32 %

_____________________
NM 鈥 Not meaningful

Three Months Ended October 31, 2021
Consolidated AGI Corporate AU USU
Net income (loss) $ 听听听听听听听听(2,852,258 ) $ 听听听听听听听听(5,059,164 ) $ 听听听听听听听听1,329,813 $ 听听听听听听听听877,093
Interest expense, net 听听听听听听听听138,064 听听听听听听听听139,239 听听听听听听听听(739 ) 听听听听听听听听(436 )
Taxes 听听听听听听听听5,900 听听听听听听听听1,249 听听听听听听听听3,400 听听听听听听听听1,251
Depreciation and amortization 听听听听听听听听817,234 听听听听听听听听38,141 听听听听听听听听681,107 听听听听听听听听97,986
EBITDA 听听听听听听听听(1,891,060 ) 听听听听听听听听(4,880,535 ) 听听听听听听听听2,013,581 听听听听听听听听975,894
Bad debt expense 听听听听听听听听350,000 听听听听听听听听鈥 听听听听听听听听250,000 听听听听听听听听100,000
Stock-based compensation 听听听听听听听听722,158 听听听听听听听听672,967 听听听听听听听听23,298 听听听听听听听听25,893
Non-recurring charges - Other 听听听听听听听听103,754 听听听听听听听听58,325 听听听听听听听听45,429 听听听听听听听听鈥
Adjusted EBITDA $ 听听听听听听听听(715,148 ) $ 听听听听听听听听(4,149,243 ) $ 听听听听听听听听2,332,308 $ 听听听听听听听听1,101,787
Net income (loss) Margin (15 ) % NM 10 % 14 %
Adjusted EBITDA Margin (4 ) % NM 18 % 18 %


Definitions

Lifetime Value ("LTV") 鈥 is calculated as the weighted average total amount of tuition and fees paid by every new student that enrolls in the Company鈥檚 universities, after giving effect to attrition.

Bookings 鈥 is defined by multiplying LTV by new student enrollments for each operating unit.

Average Revenue per Enrollment ("ARPU") 鈥 is defined by dividing total bookings by total enrollments.

Adjusted EBITDA Margin 鈥 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 impact of our efforts to reduce expenses, our ability to generate positive operating cash flow in the second half of fiscal 2023, continued strong demand for the MSN-FNP program, and our plans and efforts to locate and close an accounts receivable facility, and liquidity. The words 鈥渂elieve,鈥 鈥渕ay,鈥 鈥渆stimate,鈥 鈥渃ontinue,鈥 鈥渁nticipate,鈥 鈥渋ntend,鈥 鈥渟hould,鈥 鈥減lan,鈥 鈥渃ould,鈥 鈥渢arget,鈥 鈥減otential,鈥 鈥渋s likely,鈥 鈥渨ill,鈥 鈥渆xpect鈥 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 management鈥檚 ability to navigate the challenges we face due to adverse regulatory developments and our ability to prepare and execute a viable business strategy following those events, the continued demand of nursing students for our programs, student attrition, national and local economic factors, 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, and the myriad of risks which may affect our ability to close an accounts receivable financing ranging from locating a willing lender to contractual difficulties including covenants which prevent us from closing a facility. Other risks are included in our filings with the SEC including our Form 10-K for the year ended April 30, 2022. 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 澳门6合开彩开奖.

澳门6合开彩开奖. 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 Rogers
Managing Director
Hayden IR
385-831-7337听


GAAP Financial Statements

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

October 31, 2022 April 30, 2022
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 听听听听听听听听2,306,480 $ 听听听听听听听听6,482,750
Restricted cash 听听听听听听听听6,423,525 听听听听听听听听6,433,397
Accounts receivable, net of allowance of $3,587,840 and $3,460,288, respectively 听听听听听听听听22,391,574 听听听听听听听听24,359,241
Prepaid expenses 听听听听听听听听1,600,945 听听听听听听听听1,358,635
Other current assets 听听听听听听听听775,524 听听听听听听听听748,568
Total current assets 听听听听听听听听33,498,048 听听听听听听听听39,382,591
Property and equipment:
Computer equipment and hardware 听听听听听听听听1,573,046 听听听听听听听听1,516,475
Furniture and fixtures 听听听听听听听听2,219,245 听听听听听听听听2,193,261
Leasehold improvements 听听听听听听听听7,613,240 听听听听听听听听7,179,896
Instructional equipment 听听听听听听听听756,568 听听听听听听听听715,652
Software 听听听听听听听听10,990,705 听听听听听听听听10,285,096
Construction in progress 听听听听听听听听鈥 听听听听听听听听2,100
听听听听听听听听23,152,804 听听听听听听听听21,892,480
Less: accumulated depreciation and amortization 听听听听听听听听(10,206,811 ) 听听听听听听听听(8,395,001 )
Total property and equipment, net 听听听听听听听听12,945,993 听听听听听听听听13,497,479
Goodwill 听听听听听听听听5,011,432 听听听听听听听听5,011,432
Intangible assets, net 听听听听听听听听7,900,000 听听听听听听听听7,900,000
Courseware, net 听听听听听听听听278,208 听听听听听听听听274,047
Long-term contractual accounts receivable 听听听听听听听听16,335,657 听听听听听听听听11,406,525
Deferred financing costs 听听听听听听听听331,423 听听听听听听听听369,902
Operating lease right-of-use assets, net 听听听听听听听听14,271,481 听听听听听听听听12,645,950
Deposits and other assets 听听听听听听听听536,517 听听听听听听听听578,125
Total assets $ 听听听听听听听听91,108,759 $ 听听听听听听听听91,066,051


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)

October 31, 2022 April 30, 2022
(Unaudited)
Liabilities and Stockholders鈥 Equity
Liabilities:
Current liabilities:
Accounts payable $ 听听听听听听听听2,814,399 $ 听听听听听听听听1,893,287
Accrued expenses 听听听听听听听听3,147,485 听听听听听听听听2,821,432
Deferred revenue 听听听听听听听听8,772,017 听听听听听听听听5,889,911
Due to students 听听听听听听听听3,165,651 听听听听听听听听4,063,811
Operating lease obligations, current portion 听听听听听听听听2,204,342 听听听听听听听听2,036,570
Other current liabilities 听听听听听听听听554,946 听听听听听听听听130,262
Total current liabilities 听听听听听听听听20,658,840 听听听听听听听听16,835,273
Long-term debt, net 听听听听听听听听14,904,556 听听听听听听听听14,875,735
Operating lease obligations, less current portion 听听听听听听听听18,455,549 听听听听听听听听16,809,319
Total liabilities 听听听听听听听听54,018,945 听听听听听听听听48,520,327
Commitments and contingencies
Stockholders鈥 equity:
Preferred stock, $0.001 par value; 1,000,000 shares authorized, 0 issued and 0 outstanding at October听31, 2022 and April听30, 2022 听听听听听听听听鈥 听听听听听听听听鈥
Common stock, $0.001 par value; 60,000,000 shares authorized, 25,460,849 issued and 25,305,363 outstanding at October听31, 2022 25,357,764 issued and 25,202,278 outstanding at April听30, 2022 听听听听听听听听25,461 听听听听听听听听25,358
Additional paid-in capital 听听听听听听听听112,634,162 听听听听听听听听112,081,564
Treasury stock (155,486 at both October听31, 2022 and April听30, 2022) 听听听听听听听听(1,817,414 ) 听听听听听听听听(1,817,414 )
Accumulated deficit 听听听听听听听听(73,752,395 ) 听听听听听听听听(67,743,784 )
Total stockholders鈥 equity 听听听听听听听听37,089,814 听听听听听听听听42,545,724
Total liabilities and stockholders鈥 equity $ 听听听听听听听听91,108,759 $ 听听听听听听听听91,066,051


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended October 31, Six Months Ended October 31,
2022 2021 2022 2021
Revenue $ 听听听听听听听听17,074,547 $ 听听听听听听听听18,940,211 $ 听听听听听听听听35,968,460 $ 听听听听听听听听38,371,206
Operating expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below) 听听听听听听听听6,347,008 听听听听听听听听8,789,201 听听听听听听听听16,552,559 听听听听听听听听17,382,769
General and administrative 听听听听听听听听10,883,118 听听听听听听听听11,641,312 听听听听听听听听21,415,138 听听听听听听听听22,587,789
Bad debt expense 听听听听听听听听450,000 听听听听听听听听350,000 听听听听听听听听800,000 听听听听听听听听700,000
Depreciation and amortization 听听听听听听听听935,070 听听听听听听听听817,234 听听听听听听听听1,856,178 听听听听听听听听1,596,643
Total operating expenses 听听听听听听听听18,615,196 听听听听听听听听21,597,747 听听听听听听听听40,623,875 听听听听听听听听42,267,201
Operating loss 听听听听听听听听(1,540,649 ) 听听听听听听听听(2,657,536 ) 听听听听听听听听(4,655,415 ) 听听听听听听听听(3,895,995 )
Other income (expense):
Interest expense 听听听听听听听听(710,372 ) 听听听听听听听听(139,502 ) 听听听听听听听听(1,291,665 ) 听听听听听听听听(173,041 )
Other income (expense), net 听听听听听听听听3,882 听听听听听听听听(49,320 ) 听听听听听听听听15,291 听听听听听听听听502,800
Total other (expense) income, net 听听听听听听听听(706,490 ) 听听听听听听听听(188,822 ) 听听听听听听听听(1,276,374 ) 听听听听听听听听329,759
Loss before income taxes 听听听听听听听听(2,247,139 ) 听听听听听听听听(2,846,358 ) 听听听听听听听听(5,931,789 ) 听听听听听听听听(3,566,236 )
Income tax expense 听听听听听听听听46,501 听听听听听听听听5,900 听听听听听听听听76,822 听听听听听听听听156,910
Net loss $ 听听听听听听听听(2,293,640 ) $ 听听听听听听听听(2,852,258 ) $ 听听听听听听听听(6,008,611 ) $ 听听听听听听听听(3,723,146 )
Net loss per share - basic and diluted $ 听听听听听听听听(0.09 ) $ 听听听听听听听听(0.11 ) $ 听听听听听听听听(0.24 ) $ 听听听听听听听听(0.15 )
Weighted average number of common stock outstanding - basic and diluted 听听听听听听听听25,282,947 听听听听听听听听24,957,046 听听听听听听听听25,242,833 听听听听听听听听24,935,793


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Six Months Ended October 31,
2022 2021
Cash flows from operating activities:
Net loss $ 听听听听听听听听(6,008,611 ) $ 听听听听听听听听(3,723,146 )
Adjustments to reconcile net loss to net cash used in operating activities:
Bad debt expense 听听听听听听听听800,000 听听听听听听听听700,000
Depreciation and amortization 听听听听听听听听1,856,178 听听听听听听听听1,596,643
Stock-based compensation 听听听听听听听听504,666 听听听听听听听听1,264,870
Amortization of warrant-based cost 听听听听听听听听14,000 听听听听听听听听27,583
Amortization of deferred financing costs 听听听听听听听听269,133 听听听听听听听听19,643
Amortization of debt discounts 听听听听听听听听59,000 听听听听听听听听18,056
Common stock issued for services 听听听听听听听听24,500 听听听听听听听听鈥
Loss on asset disposition 听听听听听听听听鈥 听听听听听听听听36,442
Non-cash lease benefit 听听听听听听听听(229,809 ) 听听听听听听听听(63,099 )
Tenant improvement allowances received from landlords 听听听听听听听听418,280 听听听听听听听听816,591
Changes in operating assets and liabilities:
Accounts receivable 听听听听听听听听(3,761,463 ) 听听听听听听听听(7,699,220 )
Prepaid expenses 听听听听听听听听(242,310 ) 听听听听听听听听(520,685 )
Other current assets 听听听听听听听听(26,956 ) 听听听听听听听听47,901
Accounts receivable, other 听听听听听听听听鈥 听听听听听听听听45,329
Deposits and other assets 听听听听听听听听41,608 听听听听听听听听(15,357 )
Accounts payable 听听听听听听听听921,112 听听听听听听听听636,136
Accrued expenses 听听听听听听听听326,053 听听听听听听听听(268,088 )
Due to students 听听听听听听听听(898,160 ) 听听听听听听听听472,159
Deferred revenue 听听听听听听听听2,882,106 听听听听听听听听3,366,227
Other current liabilities 听听听听听听听听424,685 听听听听听听听听(211,918 )
Net cash used in operating activities 听听听听听听听听(2,625,988 ) 听听听听听听听听(3,453,933 )
Cash flows from investing activities:
Purchases of courseware and accreditation 听听听听听听听听(48,532 ) 听听听听听听听听(149,751 )
Disbursements for reimbursable leasehold improvements 听听听听听听听听(418,280 ) 听听听听听听听听(816,591 )
Purchases of property and equipment 听听听听听听听听(842,044 ) 听听听听听听听听(1,883,310 )
Net cash used in investing activities 听听听听听听听听(1,308,856 ) 听听听听听听听听(2,849,652 )
Cash flows from financing activities:
Proceeds from sale of common stock, net of underwriter costs 听听听听听听听听9,535 听听听听听听听听鈥
Payment of commitment fee for 2022 Credit Facility 听听听听听听听听(200,000 ) 听听听听听听听听鈥
Payments of deferred financing costs 听听听听听听听听(60,833 ) 听听听听听听听听鈥
Borrowings under the 2018 Credit Facility 听听听听听听听听鈥 听听听听听听听听5,000,000
Proceeds from stock options exercised 听听听听听听听听鈥 听听听听听听听听56,034
Net cash (used in) provided by financing activities 听听听听听听听听(251,298 ) 听听听听听听听听5,056,034


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)

Six Months Ended October 31,
2022 2021
Net decrease in cash, cash equivalents and restricted cash $ 听听听听听听听听(4,186,142 ) $ 听听听听听听听听(1,247,551 )
Cash, cash equivalents and restricted cash at beginning of period 听听听听听听听听12,916,147 听听听听听听听听13,666,079
Cash, cash equivalents and restricted cash at end of period $ 听听听听听听听听8,730,005 $ 听听听听听听听听12,418,528
Supplemental disclosure cash flow information:
Cash paid for interest $ 听听听听听听听听802,167 $ 听听听听听听听听98,904
Cash paid for income taxes $ 听听听听听听听听22,522 $ 听听听听听听听听157,552
Supplemental disclosure of non-cash investing and financing activities:
Warrants issued as part of the 2018 Credit Facility amendment $ 听听听听听听听听鈥 $ 听听听听听听听听137,500


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:

October 31,
2022 2021
Cash and cash equivalents $ 听听听听听听听听2,306,480 $ 听听听听听听听听10,985,131
Restricted cash 听听听听听听听听6,423,525 听听听听听听听听1,433,397
Total cash, cash equivalents and restricted cash $ 听听听听听听听听8,730,005 $ 听听听听听听听听12,418,528



Source: Aspen Group Inc.