èßäÊÓÆµ 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) -- èßäÊÓÆµ Group, Inc. (Nasdaq: ASPU) (“AGIâ€� or the “Companyâ€�), 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

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

_______________________ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý
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-GAAP–Financial Measures" starting on page 5.

“We 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,� said Michael Mathews, Chairman, and CEO of AGI. “Gross margin improved by 900 basis points on lower revenue, and we narrowed our net loss and delivered positive adjusted EBITDA. USU’s 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.�

“The 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,� continued Mr. Mathews. “At 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’s 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.�

Mr. Mathews concluded, “As 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.�

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’s revenue, both per-subsidiary and total:

Ìý Three Months Ended October 31,
Ìý 2022
Ìý $ Change Ìý % Change Ìý 2021
AU $ ÌýÌýÌýÌýÌýÌýÌýÌý10,341,903 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(2,416,948 ) Ìý (19)% Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý12,758,851 Ìý
USU Ìý ÌýÌýÌýÌýÌýÌýÌýÌý6,732,644 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý551,284 Ìý Ìý 9% Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý6,181,360 Ìý
Revenue $ ÌýÌýÌýÌýÌýÌýÌýÌý17,074,547 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(1,865,664 ) Ìý (10)% Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý18,940,211 Ìý


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’s 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’s net (loss) income, both per subsidiary and total:

Ìý Three Months Ended October 31, 2022
Ìý Consolidated Ìý AGI Corporate Ìý AU Ìý USU
Net (loss) income $ ÌýÌýÌýÌýÌýÌýÌýÌý(2,293,640 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(5,150,209 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý1,067,885 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý1,788,684 Ìý
Net loss per share $ ÌýÌýÌýÌýÌýÌýÌýÌý(0.09 ) Ìý Ìý Ìý Ìý Ìý Ìý


Ìý Three Months Ended October 31, 2021
Ìý Consolidated Ìý AGI Corporate Ìý AU Ìý USU
Net (loss) income $ ÌýÌýÌýÌýÌýÌýÌýÌý(2,852,258 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(5,059,164 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý1,329,813 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý877,093 Ìý
Net loss per share $ ÌýÌýÌýÌýÌýÌýÌýÌý(0.11 ) Ìý Ìý Ìý Ìý Ìý Ìý


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’s Non-GAAP measures, both per subsidiary and total. See reconciliations of GAAP to non-GAAP financial measures under “Non-GAAP–Financial Measures� starting on page 5.

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


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

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


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

Ìý Second Quarter Bookings1 and Average Revenue Per Enrollment (ARPU)1
Ìý Q2'22 Enrollments
Ìý Q2'22 Bookings 1 Ìý Q2'23 Enrollments
Ìý Q2'23 Bookings 1 Ìý Percent Change Total Bookings & ARPU 1
èßäÊÓÆµ University 1,750 Ìý Ìý $ 26,134,500 Ìý Ìý 784 Ìý Ìý $ 8,450,250 Ìý Ìý Ìý Ìý Ìý
USU 630 Ìý Ìý $ 11,226,600 Ìý Ìý 506 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý9,016,920 Ìý Ìý Ìý Ìý Ìý
Total 2,380 Ìý Ìý $ 37,361,100 Ìý Ìý 1,290 Ìý Ìý $ 17,467,170 Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(53 ) %
ARPU Ìý Ìý Ìý $ 15,698 Ìý Ìý Ìý Ìý Ìý $ 13,540 Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý (14 ) %

_____________________
1 “Bookings� are defined by multiplying Lifetime Value (LTV) by new student enrollments for each operating unit. “Average Revenue Per Enrollment� (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:

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


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 èßäÊÓÆµ University and 2,752 at USU. In contrast, the remaining 1,123 nursing students are enrolled in èßäÊÓÆµ University’s BSN Pre-Licensure program. The majority of the year-over-year èßäÊÓÆµ 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.

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


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 $18.3Ìýmillion 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

èßäÊÓÆµ Group, Inc. will host a conference call to discuss its second quarter fiscal year 2023 results on Tuesday, December 13, 2022, at 4:30 pm ET. èßäÊÓÆµ Group, Inc. 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’s 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 èßäÊÓÆµ Group, Inc. Form 10-Q for the second quarter of fiscal year 2023 and Q2 2023 Financial Results Presentation published on the Company’s website at , on the Presentations page under Company Info.

Non-GAAP – Financial Measures

This press release includes both financial measures in accordance with Generally Accepted Accounting Principles, or GAAP, as well as non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should be viewed as supplemental to, and should not be considered as alternatives to net income (loss), operating income (loss), and cash flow from operating activities, liquidity or any other financial measures. They may not be indicative of the historical operating results of AGI nor are they intended to be predictive of potential future results. Investors should not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP.

Our management uses and relies on EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin, which are non-GAAP financial measures. We believe that management, analysts, and shareholders benefit from referring to the following non-GAAP financial measures to evaluate and assess our core operating results from period-to-period after removing the impact of items that affect comparability. Our management recognizes that the non-GAAP financial measures have inherent limitations because of the excluded items described below.

We have included a reconciliation of our non-GAAP financial measures to the most comparable financial measures calculated in accordance with GAAP. We believe that providing the non-GAAP financial measures, together with the reconciliation to GAAP, helps investors make comparisons between AGI and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measure and the corresponding GAAP measure provided by each company under applicable rules of the Securities and Exchange Commission (the “SEC�).

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:

Ìý Three Months Ended October 31, Ìý Six Months Ended October 31,
Ìý Ìý2022 Ìý Ìý2021 Ìý Ìý2022 Ìý Ìý2021
Net loss $ ÌýÌýÌýÌýÌýÌýÌýÌý(2,293,640 ) Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(2,852,258 ) Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(6,008,611 ) Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(3,723,146 ) Ìý
Interest expense, net Ìý ÌýÌýÌýÌýÌýÌýÌýÌý708,705 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý138,064 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,289,285 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý170,196 Ìý Ìý
Taxes Ìý ÌýÌýÌýÌýÌýÌýÌýÌý46,501 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý5,900 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý76,822 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý156,910 Ìý Ìý
Depreciation and amortization Ìý ÌýÌýÌýÌýÌýÌýÌýÌý935,070 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý817,234 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,856,178 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,596,643 Ìý Ìý
EBITDA Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(603,364 ) Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(1,891,060 ) Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(2,786,326 ) Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(1,799,397 ) Ìý
Bad debt expense Ìý ÌýÌýÌýÌýÌýÌýÌýÌý450,000 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý350,000 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý800,000 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý700,000 Ìý Ìý
Stock-based compensation Ìý ÌýÌýÌýÌýÌýÌýÌýÌý458,336 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý722,158 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý504,666 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,264,870 Ìý Ìý
Non-recurring charges - Severance Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý125,000 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý19,665 Ìý Ìý
Non-recurring charges (income) - Other Ìý ÌýÌýÌýÌýÌýÌýÌýÌý232,367 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý103,754 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý717,299 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(394,366 ) Ìý
Adjusted EBITDA $ 537,339 Ìý Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(715,148 ) Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(639,361 ) Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(209,228 ) Ìý
Net loss Margin Ìý (13 ) % Ìý Ìý (15 ) % Ìý Ìý (17 ) % Ìý Ìý (10 ) %
Adjusted EBITDA Margin Ìý 3 Ìý % Ìý Ìý (4 ) % Ìý Ìý (2 ) % Ìý Ìý (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:

Ìý Three Months Ended October 31, 2022
Ìý Consolidated Ìý AGI Corporate Ìý AU Ìý USU
Net income (loss) $ ÌýÌýÌýÌýÌýÌýÌýÌý(2,293,640 ) Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(5,150,209 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý1,067,885 Ìý Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý1,788,684 Ìý Ìý
Interest expense, net Ìý ÌýÌýÌýÌýÌýÌýÌýÌý708,705 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý710,237 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(1,239 ) Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(293 ) Ìý
Taxes Ìý ÌýÌýÌýÌýÌýÌýÌýÌý46,501 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý8,350 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý27,776 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý10,375 Ìý Ìý
Depreciation and amortization Ìý ÌýÌýÌýÌýÌýÌýÌýÌý935,070 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý68,860 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý757,770 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý108,440 Ìý Ìý
EBITDA Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(603,364 ) Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(4,362,762 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,852,192 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,907,206 Ìý Ìý
Bad debt expense Ìý ÌýÌýÌýÌýÌýÌýÌýÌý450,000 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý225,000 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý225,000 Ìý Ìý
Stock-based compensation Ìý ÌýÌýÌýÌýÌýÌýÌýÌý458,336 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý404,391 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý37,338 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý16,607 Ìý Ìý
Non-recurring charges - Other Ìý ÌýÌýÌýÌýÌýÌýÌýÌý232,367 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý232,367 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý Ìý
Adjusted EBITDA $ ÌýÌýÌýÌýÌýÌýÌýÌý537,339 Ìý Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(3,726,004 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý2,114,530 Ìý Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý2,148,813 Ìý Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
Net income (loss) Margin Ìý (13 ) % Ìý Ìý NM Ìý Ìý Ìý 10 Ìý % Ìý Ìý 27 Ìý %
Adjusted EBITDA Margin Ìý 3 Ìý % Ìý Ìý NM Ìý Ìý Ìý 20 Ìý % Ìý Ìý 32 Ìý %

_____________________
NM – Not meaningful

Ìý Three Months Ended October 31, 2021
Ìý Consolidated Ìý AGI Corporate Ìý AU Ìý USU
Net income (loss) $ ÌýÌýÌýÌýÌýÌýÌýÌý(2,852,258 ) Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(5,059,164 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý1,329,813 Ìý Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý877,093 Ìý Ìý
Interest expense, net Ìý ÌýÌýÌýÌýÌýÌýÌýÌý138,064 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý139,239 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(739 ) Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(436 ) Ìý
Taxes Ìý ÌýÌýÌýÌýÌýÌýÌýÌý5,900 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,249 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý3,400 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,251 Ìý Ìý
Depreciation and amortization Ìý ÌýÌýÌýÌýÌýÌýÌýÌý817,234 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý38,141 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý681,107 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý97,986 Ìý Ìý
EBITDA Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(1,891,060 ) Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(4,880,535 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý2,013,581 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý975,894 Ìý Ìý
Bad debt expense Ìý ÌýÌýÌýÌýÌýÌýÌýÌý350,000 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý250,000 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý100,000 Ìý Ìý
Stock-based compensation Ìý ÌýÌýÌýÌýÌýÌýÌýÌý722,158 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý672,967 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý23,298 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý25,893 Ìý Ìý
Non-recurring charges - Other Ìý ÌýÌýÌýÌýÌýÌýÌýÌý103,754 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý58,325 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý45,429 Ìý Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý Ìý
Adjusted EBITDA $ ÌýÌýÌýÌýÌýÌýÌýÌý(715,148 ) Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(4,149,243 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý2,332,308 Ìý Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý1,101,787 Ìý Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
Net income (loss) Margin Ìý (15 ) % Ìý Ìý NM Ìý Ìý Ìý 10 Ìý % Ìý Ìý 14 Ìý %
Adjusted EBITDA Margin Ìý (4 ) % Ìý Ìý NM Ìý Ìý Ìý 18 Ìý % Ìý Ìý 18 Ìý %


Definitions

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

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

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

Adjusted EBITDA Margin – is defined as Adjusted EBITDA divided by revenue. We believe Adjusted EBITDA margin is useful for management, analysts and investors as this measure allows for a more meaningful comparison between our performance and that of our competitors. Adjusted EBITDA margin has certain limitations in that it does not take into account the impact to our consolidated statement of operations of certain expenses.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including the expected 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 “believe,� “may,� “estimate,� “continue,� “anticipate,� “intend,� “should,� “plan,� “could,� “target,� “potential,� “is likely,� “will,� “expect� and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Important factors that could cause actual results to differ from those in the forward-looking statements include management’s 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 èßäÊÓÆµ Group, Inc.

èßäÊÓÆµ Group, Inc. is an education technology holding company that leverages its infrastructure and expertise to allow its two universities, èßäÊÓÆµ University and United States University, to deliver on the vision of making college affordable again.

Investor Relations Contact

Kim Rogers
Managing Director
Hayden IR
385-831-7337Ìý


GAAP Financial Statements

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

Ìý October 31, 2022 Ìý April 30, 2022
Ìý (Unaudited) Ìý Ìý
Assets Ìý Ìý Ìý
Current assets: Ìý Ìý Ìý
Cash and cash equivalents $ ÌýÌýÌýÌýÌýÌýÌýÌý2,306,480 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý6,482,750 Ìý
Restricted cash Ìý ÌýÌýÌýÌýÌýÌýÌýÌý6,423,525 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý6,433,397 Ìý
Accounts receivable, net of allowance of $3,587,840 and $3,460,288, respectively Ìý ÌýÌýÌýÌýÌýÌýÌýÌý22,391,574 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý24,359,241 Ìý
Prepaid expenses Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,600,945 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,358,635 Ìý
Other current assets Ìý ÌýÌýÌýÌýÌýÌýÌýÌý775,524 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý748,568 Ìý
Total current assets Ìý ÌýÌýÌýÌýÌýÌýÌýÌý33,498,048 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý39,382,591 Ìý
Ìý Ìý Ìý Ìý
Property and equipment: Ìý Ìý Ìý
Computer equipment and hardware Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,573,046 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,516,475 Ìý
Furniture and fixtures Ìý ÌýÌýÌýÌýÌýÌýÌýÌý2,219,245 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý2,193,261 Ìý
Leasehold improvements Ìý ÌýÌýÌýÌýÌýÌýÌýÌý7,613,240 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý7,179,896 Ìý
Instructional equipment Ìý ÌýÌýÌýÌýÌýÌýÌýÌý756,568 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý715,652 Ìý
Software Ìý ÌýÌýÌýÌýÌýÌýÌýÌý10,990,705 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý10,285,096 Ìý
Construction in progress Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý2,100 Ìý
Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý23,152,804 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý21,892,480 Ìý
Less: accumulated depreciation and amortization Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(10,206,811 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(8,395,001 )
Total property and equipment, net Ìý ÌýÌýÌýÌýÌýÌýÌýÌý12,945,993 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý13,497,479 Ìý
Goodwill Ìý ÌýÌýÌýÌýÌýÌýÌýÌý5,011,432 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý5,011,432 Ìý
Intangible assets, net Ìý ÌýÌýÌýÌýÌýÌýÌýÌý7,900,000 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý7,900,000 Ìý
Courseware, net Ìý ÌýÌýÌýÌýÌýÌýÌýÌý278,208 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý274,047 Ìý
Long-term contractual accounts receivable Ìý ÌýÌýÌýÌýÌýÌýÌýÌý16,335,657 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý11,406,525 Ìý
Deferred financing costs Ìý ÌýÌýÌýÌýÌýÌýÌýÌý331,423 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý369,902 Ìý
Operating lease right-of-use assets, net Ìý ÌýÌýÌýÌýÌýÌýÌýÌý14,271,481 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý12,645,950 Ìý
Deposits and other assets Ìý ÌýÌýÌýÌýÌýÌýÌýÌý536,517 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý578,125 Ìý
Total assets $ ÌýÌýÌýÌýÌýÌýÌýÌý91,108,759 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý91,066,051 Ìý


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

Ìý October 31, 2022 Ìý April 30, 2022
Ìý (Unaudited) Ìý Ìý
Liabilities and Stockholders’ Equity Ìý Ìý Ìý
Liabilities: Ìý Ìý Ìý
Current liabilities: Ìý Ìý Ìý
Accounts payable $ ÌýÌýÌýÌýÌýÌýÌýÌý2,814,399 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý1,893,287 Ìý
Accrued expenses Ìý ÌýÌýÌýÌýÌýÌýÌýÌý3,147,485 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý2,821,432 Ìý
Deferred revenue Ìý ÌýÌýÌýÌýÌýÌýÌýÌý8,772,017 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý5,889,911 Ìý
Due to students Ìý ÌýÌýÌýÌýÌýÌýÌýÌý3,165,651 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý4,063,811 Ìý
Operating lease obligations, current portion Ìý ÌýÌýÌýÌýÌýÌýÌýÌý2,204,342 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý2,036,570 Ìý
Other current liabilities Ìý ÌýÌýÌýÌýÌýÌýÌýÌý554,946 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý130,262 Ìý
Total current liabilities Ìý ÌýÌýÌýÌýÌýÌýÌýÌý20,658,840 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý16,835,273 Ìý
Ìý Ìý Ìý Ìý
Long-term debt, net Ìý ÌýÌýÌýÌýÌýÌýÌýÌý14,904,556 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý14,875,735 Ìý
Operating lease obligations, less current portion Ìý ÌýÌýÌýÌýÌýÌýÌýÌý18,455,549 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý16,809,319 Ìý
Total liabilities Ìý ÌýÌýÌýÌýÌýÌýÌýÌý54,018,945 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý48,520,327 Ìý
Ìý Ìý Ìý Ìý
Commitments and contingencies Ìý Ìý Ìý
Ìý Ìý Ìý Ìý
Stockholders’ equity: Ìý Ìý Ìý
Preferred stock, $0.001 par value; 1,000,000 shares authorized, 0 issued and 0 outstanding at OctoberÌý31, 2022 and AprilÌý30, 2022 Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý
Common stock, $0.001 par value; 60,000,000 shares authorized, 25,460,849 issued and 25,305,363 outstanding at OctoberÌý31, 2022 25,357,764 issued and 25,202,278 outstanding at AprilÌý30, 2022 Ìý ÌýÌýÌýÌýÌýÌýÌýÌý25,461 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý25,358 Ìý
Additional paid-in capital Ìý ÌýÌýÌýÌýÌýÌýÌýÌý112,634,162 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý112,081,564 Ìý
Treasury stock (155,486 at both OctoberÌý31, 2022 and AprilÌý30, 2022) Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(1,817,414 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(1,817,414 )
Accumulated deficit Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(73,752,395 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(67,743,784 )
Total stockholders’ equity Ìý ÌýÌýÌýÌýÌýÌýÌýÌý37,089,814 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý42,545,724 Ìý
Total liabilities and stockholders’ equity $ ÌýÌýÌýÌýÌýÌýÌýÌý91,108,759 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý91,066,051 Ìý


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

Ìý Three Months Ended October 31, Ìý Six Months Ended October 31,
Ìý Ìý 2022 Ìý Ìý Ìý 2021 Ìý Ìý Ìý 2022 Ìý Ìý Ìý 2021 Ìý
Revenue $ ÌýÌýÌýÌýÌýÌýÌýÌý17,074,547 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý18,940,211 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý35,968,460 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý38,371,206 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
Operating expenses: Ìý Ìý Ìý Ìý Ìý Ìý Ìý
Cost of revenue (exclusive of depreciation and amortization shown separately below) Ìý ÌýÌýÌýÌýÌýÌýÌýÌý6,347,008 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý8,789,201 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý16,552,559 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý17,382,769 Ìý
General and administrative Ìý ÌýÌýÌýÌýÌýÌýÌýÌý10,883,118 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý11,641,312 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý21,415,138 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý22,587,789 Ìý
Bad debt expense Ìý ÌýÌýÌýÌýÌýÌýÌýÌý450,000 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý350,000 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý800,000 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý700,000 Ìý
Depreciation and amortization Ìý ÌýÌýÌýÌýÌýÌýÌýÌý935,070 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý817,234 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,856,178 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,596,643 Ìý
Total operating expenses Ìý ÌýÌýÌýÌýÌýÌýÌýÌý18,615,196 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý21,597,747 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý40,623,875 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý42,267,201 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
Operating loss Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(1,540,649 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(2,657,536 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(4,655,415 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(3,895,995 )
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
Other income (expense): Ìý Ìý Ìý Ìý Ìý Ìý Ìý
Interest expense Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(710,372 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(139,502 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(1,291,665 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(173,041 )
Other income (expense), net Ìý ÌýÌýÌýÌýÌýÌýÌýÌý3,882 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(49,320 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý15,291 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý502,800 Ìý
Total other (expense) income, net Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(706,490 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(188,822 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(1,276,374 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý329,759 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
Loss before income taxes Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(2,247,139 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(2,846,358 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(5,931,789 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(3,566,236 )
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
Income tax expense Ìý ÌýÌýÌýÌýÌýÌýÌýÌý46,501 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý5,900 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý76,822 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý156,910 Ìý
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
Net loss $ ÌýÌýÌýÌýÌýÌýÌýÌý(2,293,640 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(2,852,258 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(6,008,611 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(3,723,146 )
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
Net loss per share - basic and diluted $ ÌýÌýÌýÌýÌýÌýÌýÌý(0.09 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(0.11 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(0.24 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(0.15 )
Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý
Weighted average number of common stock outstanding - basic and diluted Ìý ÌýÌýÌýÌýÌýÌýÌýÌý25,282,947 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý24,957,046 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý25,242,833 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý24,935,793 Ìý


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

Ìý Six Months Ended October 31,
Ìý Ìý 2022 Ìý Ìý Ìý 2021 Ìý
Cash flows from operating activities: Ìý Ìý Ìý
Net loss $ ÌýÌýÌýÌýÌýÌýÌýÌý(6,008,611 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(3,723,146 )
Adjustments to reconcile net loss to net cash used in operating activities: Ìý Ìý Ìý
Bad debt expense Ìý ÌýÌýÌýÌýÌýÌýÌýÌý800,000 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý700,000 Ìý
Depreciation and amortization Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,856,178 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,596,643 Ìý
Stock-based compensation Ìý ÌýÌýÌýÌýÌýÌýÌýÌý504,666 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,264,870 Ìý
Amortization of warrant-based cost Ìý ÌýÌýÌýÌýÌýÌýÌýÌý14,000 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý27,583 Ìý
Amortization of deferred financing costs Ìý ÌýÌýÌýÌýÌýÌýÌýÌý269,133 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý19,643 Ìý
Amortization of debt discounts Ìý ÌýÌýÌýÌýÌýÌýÌýÌý59,000 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý18,056 Ìý
Common stock issued for services Ìý ÌýÌýÌýÌýÌýÌýÌýÌý24,500 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý
Loss on asset disposition Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý36,442 Ìý
Non-cash lease benefit Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(229,809 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(63,099 )
Tenant improvement allowances received from landlords Ìý ÌýÌýÌýÌýÌýÌýÌýÌý418,280 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý816,591 Ìý
Changes in operating assets and liabilities: Ìý Ìý Ìý
Accounts receivable Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(3,761,463 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(7,699,220 )
Prepaid expenses Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(242,310 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(520,685 )
Other current assets Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(26,956 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý47,901 Ìý
Accounts receivable, other Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý45,329 Ìý
Deposits and other assets Ìý ÌýÌýÌýÌýÌýÌýÌýÌý41,608 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(15,357 )
Accounts payable Ìý ÌýÌýÌýÌýÌýÌýÌýÌý921,112 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý636,136 Ìý
Accrued expenses Ìý ÌýÌýÌýÌýÌýÌýÌýÌý326,053 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(268,088 )
Due to students Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(898,160 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý472,159 Ìý
Deferred revenue Ìý ÌýÌýÌýÌýÌýÌýÌýÌý2,882,106 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý3,366,227 Ìý
Other current liabilities Ìý ÌýÌýÌýÌýÌýÌýÌýÌý424,685 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(211,918 )
Net cash used in operating activities Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(2,625,988 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(3,453,933 )
Cash flows from investing activities: Ìý Ìý Ìý
Purchases of courseware and accreditation Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(48,532 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(149,751 )
Disbursements for reimbursable leasehold improvements Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(418,280 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(816,591 )
Purchases of property and equipment Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(842,044 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(1,883,310 )
Net cash used in investing activities Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(1,308,856 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(2,849,652 )
Cash flows from financing activities: Ìý Ìý Ìý
Proceeds from sale of common stock, net of underwriter costs Ìý ÌýÌýÌýÌýÌýÌýÌýÌý9,535 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý
Payment of commitment fee for 2022 Credit Facility Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(200,000 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý
Payments of deferred financing costs Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(60,833 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý
Borrowings under the 2018 Credit Facility Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý5,000,000 Ìý
Proceeds from stock options exercised Ìý ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý56,034 Ìý
Net cash (used in) provided by financing activities Ìý ÌýÌýÌýÌýÌýÌýÌýÌý(251,298 ) Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý5,056,034 Ìý


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

Ìý Six Months Ended October 31,
Ìý Ìý 2022 Ìý Ìý Ìý 2021 Ìý
Net decrease in cash, cash equivalents and restricted cash $ ÌýÌýÌýÌýÌýÌýÌýÌý(4,186,142 ) Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý(1,247,551 )
Cash, cash equivalents and restricted cash at beginning of period Ìý ÌýÌýÌýÌýÌýÌýÌýÌý12,916,147 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý13,666,079 Ìý
Cash, cash equivalents and restricted cash at end of period $ ÌýÌýÌýÌýÌýÌýÌýÌý8,730,005 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý12,418,528 Ìý
Ìý Ìý Ìý Ìý
Supplemental disclosure cash flow information: Ìý Ìý Ìý
Cash paid for interest $ ÌýÌýÌýÌýÌýÌýÌýÌý802,167 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý98,904 Ìý
Cash paid for income taxes $ ÌýÌýÌýÌýÌýÌýÌýÌý22,522 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý157,552 Ìý
Ìý Ìý Ìý Ìý
Supplemental disclosure of non-cash investing and financing activities: Ìý Ìý Ìý
Warrants issued as part of the 2018 Credit Facility amendment $ ÌýÌýÌýÌýÌýÌýÌýÌý— Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý137,500 Ìý


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:

Ìý October 31,
Ìý Ìý 2022 Ìý Ìý Ìý 2021 Ìý
Cash and cash equivalents $ ÌýÌýÌýÌýÌýÌýÌýÌý2,306,480 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý10,985,131 Ìý
Restricted cash Ìý ÌýÌýÌýÌýÌýÌýÌýÌý6,423,525 Ìý Ìý Ìý ÌýÌýÌýÌýÌýÌýÌýÌý1,433,397 Ìý
Total cash, cash equivalents and restricted cash $ ÌýÌýÌýÌýÌýÌýÌýÌý8,730,005 Ìý Ìý $ ÌýÌýÌýÌýÌýÌýÌýÌý12,418,528 Ìý



Source: èßäÊÓÆµ Group Inc.