Aspen Group Reports Positive Cash from Operations Fiscal Year-to-Date
Q2 Fiscal 2025 Highlights
- Reports revenue of $11.5 Million
- Gross margin increased to 71% from 63%
- Net loss of $(4.2) million reflects $(4.9) million one-time non-cash lease related impairment charges for right-of-use assets and tenant leasehold improvements
- Adjusted EBITDA improved by 42% year-over-year due to continued cost controls
PHOENIX, Dec. 16, 2024 (GLOBE NEWSWIRE) -- Aspen Group, Inc. (OTC Markets: ASPU) ("AGI" or the "Company"), an education technology holding company, today announced financial results for its second quarter fiscal year 2025 ended October 31, 2024.
Second Quarter Fiscal Year 2025 Summary Results
| Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||
| $ in millions, except per share data | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Revenue | $ | 11.5 | $ | 13.8 | $ | 22.8 | $ | 28.5 | |||||||
| Gross Profit1 | $ | 8.1 | $ | 8.7 | $ | 15.6 | $ | 18.5 | |||||||
| Gross Margin (%)1 | 71 | % | 63 | % | 69 | % | 65 | % | |||||||
| Operating Income (Loss) | $ | (4.8 | ) | $ | (0.5 | ) | $ | (5.5 | ) | $ | (0.2 | ) | |||
| Net Income (Loss) Available to Common Stockholders 2 | $ | (4.2 | ) | $ | (1.6 | ) | $ | (4.4 | ) | $ | (2.3 | ) | |||
| Earnings (Loss) per Share Available to Common Stockholders | $ | (0.16 | ) | $ | (0.06 | ) | $ | (0.17 | ) | $ | (0.09 | ) | |||
| EBITDA3 | $ | (3.0 | ) | $ | 0.4 | $ | (1.9 | ) | $ | 1.8 | |||||
| Adjusted EBITDA3 | $ | 1.5 | $ | 1.1 | $ | 2.0 | $ | 3.0 | |||||||
_______________________
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 $0.9 million and $1.0 million for the three and six months ended October 31, 2024 and 2023, respectively.
2 Net income (loss) in fiscal Q2 2025 and year-to-date fiscal 2025 includes a noncash impairment charge of $(4.9) million. Additionally, fiscal Q2 2025 and year-to-date fiscal 2025 contain a non-cash gain of $1.1 million and $1.9 million, respectively, related to the change in the fair value of put warrant liability. See further explanation on page 2.
3 Non-GAAP financial measures. See reconciliations of GAAP to non-GAAP financial measures under "Non-GAAP–Financial Measures" starting on page 5.
"We made significant strides toward stabilizing our revenue in the second quarter of fiscal 2025 while achieving positive cash flow through disciplined cost management," said Michael Mathews, Chairman and CEO of AGI. "Despite maintaining a disciplined marketing spend, we achieved notable improvements in our financial performance, particularly gross margin. Our gross margin expanded primarily due to the lower instructional costs from completing the AU Pre-licensure BSN program teach-out and increased efficiencies in USU's instructional operations. Additionally, restructuring efforts reduced general and administrative expenses by 14% year-over-year. While our net loss was impacted by a one-time, noncash leasehold impairment charge, the lower instructional costs and expense reduction initiatives in the second quarter collectively drove a 42% year-over-year improvement in Adjusted EBITDA for the quarter and delivered modest year-to-date positive cash from operations."
Mr. Mathews concluded, "As of the filing of our quarterly report for the first quarter fiscal year 2025 with OTC Market, AGI is now fully compliant with the QB listing requirements. We have recently begun the process to resume trading on the OTCQB."
Fiscal Q2 2025 Financial and Operational Results (compared to Fiscal Q2 2024)
Revenue decreased by 17% to $11.5 million compared to $13.8 million. The following table presents the Company's revenue, both per-subsidiary and total:
| Three Months Ended October 31, | |||||||||||
| 2024 | $ Change | % Change | 2023 | ||||||||
| AU | $ | 4,773,693 | $ | (2,519,431 | ) | (35)% | $ | 7,293,124 | |||
| USU | 6,686,086 | 150,363 | 2% | 6,535,723 | |||||||
| Revenue | $ | 11,459,779 | $ | (2,369,068 | ) | (17)% | $ | 13,828,847 | |||
Aspen University's ("AU") revenue decline of $2.5 million, or 35%, reflects the completion of the teach-out of the pre-licensure program and lower post-licensure enrollments in prior quarters as a result of the decrease in marketing spend initiated in late Fiscal Q1 2023. The active student body at AU decreased by 33% year-over-year to 3,827 at October 31, 2024 from 5,679 at October 31, 2023.
United States University ("USU") revenue was up 2% compared to the prior period. MSN-FNP program enrollments decreased in the quarter due to lower marketing spend initiated in late Fiscal Q1 2023. Lower enrollments were offset by higher revenue per student driven by more students entering their second year of the MSN-FNP program, which includes clinical rotations, and by tuition increases. The active student body at USU decreased by 6% to 2,560 at October 31, 2024 from 2,733 at October 31, 2023.
GAAP gross profit decreased 7% to $8.1 million compared to $8.7 million primarily due to the overall student body decrease of 24%. Gross margin was 71% compared to 63%. AU's gross margin was 67% versus 61%, and USU's gross margin was 74% versus 67%. The increase in gross margin is the result of lower instructional costs from completing the AU Pre-licensure BSN program teach-out, increased efficiencies in USU's instructional operations and lower marketing spend.
AU instructional costs and services represented 26% of AU revenue, and USU instructional costs and services represented 23% of USU revenue. AU marketing and promotional costs represented 1% of AU revenue, and USU marketing and promotional costs represented 1% of USU revenue.
In Fiscal Q2 2025 and year-to-date Fiscal 2025, our bottom line was materially impacted by a $4.9 million non-cash right-of-use assets and tenant leasehold improvements impairment charge. The charge is the result of the fact that AU is no longer able to utilize space for BSN Pre-licensure operations due to the completion of the teach-out. The charge represents the entirety of the remaining impairment exposure due to the teach-out. The impact of the charge to our operating expenses, net loss and EBITDA is presented in the following table:
| Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||||||||
| 2024 | $ Change | % Change | 2023 | 2024 | $ Change | % Change | 2023 | ||||||||||||||
| Impairments of right-of-use assets and tenant leasehold improvements | $ | 4,937,154 | $ | 4,937,154 | NM | $ | — | $ | 4,937,154 | $ | 4,937,154 | NM | $ | — | |||||||
_____________________
NM – Not meaningful
The following tables present the Company's net income (loss), both per subsidiary and total:
| Three Months Ended October 31, 2024 | ||||||||||||||
| Consolidated | AGI Corporate | AU | USU | |||||||||||
| Net income (loss) available to common stockholders | $ | (4,153,422 | ) | $ | (935,442 | ) | $ | (5,350,264 | ) | $ | 2,132,284 | |||
| Net loss per share available to common stockholders | $ | (0.16 | ) | |||||||||||
| Three Months Ended October 31, 2023 | |||||||||||||
| Consolidated | AGI Corporate | AU | USU | ||||||||||
| Net income (loss) available to common stockholders | $ | (1,611,813 | ) | $ | (3,807,821 | ) | $ | 581,707 | $ | 1,614,301 | |||
| Net loss per share available to common stockholders | $ | (0.06 | ) | ||||||||||
The following tables present the Company's Non-GAAP Financial Measures, both per subsidiary and total. See reconciliations of GAAP to non-GAAP financial measures under "Non-GAAP–Financial Measures" starting on page 5.
| Three Months Ended October 31, 2024 | ||||||||
| Consolidated | AGI Corporate | AU | USU | |||||
| EBITDA | $(2,962,755) | $(496,585) | $(4,747,931) | $2,281,761 | ||||
| EBITDA Margin | (26)% | NM | (99)% | 34% | ||||
| Adjusted EBITDA | $1,549,020 | $(1,478,554) | $515,798 | $2,511,776 | ||||
| Adjusted EBITDA Margin | 14% | NM | 11% | 38% | ||||
| Three Months Ended October 31, 2023 | ||||||||
| Consolidated | AGI Corporate | AU | USU | |||||
| EBITDA | $419,073 | $(2,680,982) | $1,339,102 | $1,760,953 | ||||
| EBITDA Margin | 3% | NM | 18% | 27% | ||||
| Adjusted EBITDA | $1,087,205 | $(2,487,843) | $1,585,674 | $1,989,374 | ||||
| Adjusted EBITDA Margin | 8% | NM | 22% | 30% | ||||
Adjusted EBITDA improved by $0.5 million due to the reduction in instructional costs and services related to the teach-out of the pre-licensure program, increased instructional efficiencies at USU and a decrease in general and administrative costs attributed to our restructurings.
Operating Metrics
New Student Enrollments
Total enrollments for AGI decreased 30% from Fiscal Q2 2024 but increased 15% sequentially, despite the reduction in internet advertising spend across all programs to maintenance levels. The sequential increase in enrollments reflected an unusually strong month of August as prospective students enrolled prior to an annual tuition increase which took effect in September 2024.
New student enrollments at AU decreased 37% year-over-year and at USU decreased 19% year-over-year. The new student enrollment decrease year-over-year was primarily impacted by our reduction in marketing spend. We anticipate the resumption of marketing spend in late Fiscal 2025 at a level necessary to provide enrollments needed to grow the student body and allow for the generation of positive operating cash flow.
New student enrollments for the past five quarters are shown below:
| Q2'24 | Q3'24 | Q4'24 | Q1'25 | Q2'25 | |||||
| Aspen University | 808 | 473 | 427 | 413 | 508 | ||||
| USU | 548 | 325 | 370 | 410 | 442 | ||||
| Total | 1,356 | 798 | 797 | 823 | 950 |
Total Active Student Body
AGI's active degree-seeking student body, including AU and USU, declined 24% year-over-year to 6,387 at October 31, 2024 from 8,412 at October 31, 2023. AU's total active student body decreased by 33% year-over-year to 3,827 at October 31, 2024 from 5,679 at October 31, 2023. On a year-over-year basis, USU's total active student body decreased by 6% to 2,560 at October 31, 2024 from 2,733 at October 31, 2023.
Total active student body for the past five quarters is shown below:
| Q2'24 | Q3'24 | Q4'24 | Q1'25 | Q2'25 | |||||
| Aspen University | 5,679 | 5,146 | 4,559 | 4,145 | 3,827 | ||||
| USU | 2,733 | 2,503 | 2,489 | 2,477 | 2,560 | ||||
| Total | 8,412 | 7,649 | 7,048 | 6,622 | 6,387 |
Nursing Students
Nursing student body for the past five quarters is shown below.
| Q2'24 | Q3'24 | Q4'24 | Q1'25 | Q2'25 | |||||
| Aspen University | 4,470 | 4,032 | 3,526 | 3,198 | 2,948 | ||||
| USU | 2,432 | 2,270 | 2,262 | 2,254 | 2,300 | ||||
| Total | 6,902 | 6,302 | 5,788 | 5,452 | 5,248 |
Liquidity
The Fiscal Q2 2025 ending unrestricted cash balance was $0.8 million. The following three factors will help us continue to stabilize operating cash flow in the second half of Fiscal 2025. First, effective August 16, 2024, AU transitioned from the Heightened Cash Monitoring 2 (HCM2) to the Heightened Cash Monitoring 1 (HCM1) method of receiving student financial aid payments from the U.S Department of Education. This transition allows AU to disburse student financial aid using institutional funds and immediately draw down reimbursement by submitting disbursement records, eliminating payment delays and resulting in more consistent unrestricted cash balances. Second, we renegotiated the 15% Senior Secured Debentures in November 2024, reducing ongoing principal payments and changing the timing of principal payments from monthly to quarterly. Finally, the Company initiated a fourth restructuring late in the fourth quarter of calendar 2024, projected to reduce annual operating expenses by over $1.5 million.
Cost reductions associated with the four restructuring plans and other corporate cost reductions were implemented to ensure that the company will have sufficient cash to meet its working capital needs for the next 12 months.
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.
AGI defines Adjusted EBITDA as EBITDA excluding: (1) bad debt expense; (2) stock-based compensation; (3) severance; (4) impairments of right-of-use assets and tenant leasehold improvements and (5) non-recurring (income) charges. The following table presents a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA and of net income (loss) margin to the Adjusted EBITDA margin:
| Three Months Ended October 31, | ||||||||
| 2024 | 2023 | |||||||
| Net loss | $ | (4,146,365 | ) | $ | (1,611,813 | ) | ||
| Interest expense, net | 342,490 | 1,040,720 | ||||||
| Taxes | 46,225 | 40,076 | ||||||
| Depreciation and amortization | 794,895 | 950,090 | ||||||
| EBITDA | (2,962,755 | ) | 419,073 | |||||
| Bad debt expense | 450,000 | 450,000 | ||||||
| Stock-based compensation | 98,245 | 218,132 | ||||||
| Severance | 35,522 | — | ||||||
| Impairments of right-of-use assets and tenant leasehold improvements | 4,937,154 | — | ||||||
| Non-recurring income - Other | (1,009,146 | ) | — | |||||
| Adjusted EBITDA | $ | 1,549,020 | $ | 1,087,205 | ||||
| Net income / loss Margin | (36 | )% | (12 | )% | ||||
| Adjusted EBITDA Margin | 14 | % | 8 | % | ||||
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, 2024 | ||||||||||||||
| Consolidated | AGI Corporate | AU | USU | |||||||||||
| Net income (loss) | $ | (4,146,365 | ) | $ | (928,386 | ) | $ | (5,350,264 | ) | $ | 2,132,285 | |||
| Interest expense, net | 342,490 | 342,490 | — | — | ||||||||||
| Taxes | 46,225 | 15,479 | 25,900 | 4,846 | ||||||||||
| Depreciation and amortization | 794,895 | 73,832 | 576,433 | 144,630 | ||||||||||
| EBITDA | (2,962,755 | ) | (496,585 | ) | (4,747,931 | ) | 2,281,761 | |||||||
| Bad debt expense | 450,000 | — | 225,000 | 225,000 | ||||||||||
| Stock-based compensation | 98,245 | 94,819 | 1,954 | 1,472 | ||||||||||
| Severance | 35,522 | 8,357 | 23,622 | 3,543 | ||||||||||
| Impairments of right-of-use assets and tenant leasehold improvements | 4,937,154 | — | 4,937,154 | — | ||||||||||
| Non-recurring (income) charges - Other | (1,009,146 | ) | (1,085,145 | ) | 75,999 | — | ||||||||
| Adjusted EBITDA | $ | 1,549,020 | $ | (1,478,554 | ) | $ | 515,798 | $ | 2,511,776 | |||||
| Net income (loss) Margin | (36)% | NM | (112)% | 32 | % | |||||
| Adjusted EBITDA Margin | 14 | % | NM | 11 | % | 38 | % | |||
___________________
NM – Not meaningful
| Three Months Ended October 31, 2023 | |||||||||||||
| Consolidated | AGI Corporate | AU | USU | ||||||||||
| Net income (loss) | $ | (1,611,813 | ) | $ | (3,807,821 | ) | $ | 581,707 | $ | 1,614,301 | |||
| Interest expense, net | 1,040,720 | 1,040,720 | — | — | |||||||||
| Taxes | 40,076 | 7,997 | 18,601 | 13,478 | |||||||||
| Depreciation and amortization | 950,090 | 78,122 | 738,794 | 133,174 | |||||||||
| EBITDA | 419,073 | (2,680,982 | ) | 1,339,102 | 1,760,953 | ||||||||
| Bad debt expense | 450,000 | — | 225,000 | 225,000 | |||||||||
| Stock-based compensation | 218,132 | 193,139 | 21,572 | 3,421 | |||||||||
| Adjusted EBITDA | $ | 1,087,205 | $ | (2,487,843 | ) | $ | 1,585,674 | $ | 1,989,374 | ||||
| Net income (loss) Margin | (12)% | NM | 8 | % | 25 | % | ||||
| Adjusted EBITDA Margin | 8 | % | NM | 22 | % | 30 | % | |||
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including the impact of our operating and debt restructurings, results of our resumption of marketing spend, and our 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. The results anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties and risks that may cause actual results to differ materially from these forward-looking statements include, without limitation, the impact from our fourth restructuring plan, the effectiveness of our future marketing, our ability to sublease our remaining leases other than our executive offices and necessary space used by AU and USU, the continued high demand for nurses for our new programs and in general, student attrition, national and local economic factors including the labor market shortages, and competition from other online universities including the competitive impact from the trend of major non-profit universities using online education. . We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.
About Aspen Group, Inc.
Aspen Group, Inc. 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
[email protected]
GAAP Financial Statements
| ASPEN GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | |||||||
| October 31, 2024 | April 30, 2024 | ||||||
| (Unaudited) | |||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 827,780 | $ | 1,531,425 | |||
| Restricted cash | 338,002 | 1,088,002 | |||||
| Accounts receivable, net of allowance of $5,436,207 and $4,560,378, respectively | 18,463,099 | 19,686,527 | |||||
| Prepaid expenses | 674,081 | 502,751 | |||||
| Other current assets | 986,357 | 1,785,621 | |||||
| Total current assets | 21,289,319 | 24,594,326 | |||||
| Property and equipment: | |||||||
| Computer equipment and hardware | 888,566 | 886,152 | |||||
| Furniture and fixtures | 1,974,271 | 1,974,271 | |||||
| Leasehold improvements | 4,594,239 | 6,553,314 | |||||
| Instructional equipment | 529,299 | 529,299 | |||||
| Software | 9,347,651 | 8,784,996 | |||||
| 17,334,026 | 18,728,032 | ||||||
| Less: accumulated depreciation and amortization | (10,348,986 | ) | (9,542,520 | ) | |||
| Total property and equipment, net | 6,985,040 | 9,185,512 | |||||
| Goodwill | 5,011,432 | 5,011,432 | |||||
| Intangible assets, net | 7,900,000 | 7,900,000 | |||||
| Courseware and accreditation, net | 333,120 | 363,975 | |||||
| Long-term contractual accounts receivable | 18,619,202 | 17,533,030 | |||||
| Operating lease right-of-use assets, net | 5,512,553 | 10,639,838 | |||||
| Deposits and other assets | 693,193 | 718,888 | |||||
| Total assets | $ | 66,343,859 | $ | 75,947,001 | |||
| ASPEN GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) | |||||||
| October 31, 2024 | April 30, 2024 | ||||||
| (Unaudited) | |||||||
| Liabilities and Stockholders' Equity | |||||||
| Liabilities: | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 1,238,506 | $ | 2,311,360 | |||
| Accrued expenses | 3,311,273 | 2,880,478 | |||||
| Advances on tuition | 2,166,683 | 2,030,501 | |||||
| Deferred tuition | 3,780,213 | 4,881,546 | |||||
| Due to students | 2,293,614 | 2,558,492 | |||||
| Current portion of long-term debt | 2,000,000 | 2,284,264 | |||||
| Operating lease obligations, current portion | 2,498,289 | 2,608,534 | |||||
| Other current liabilities | 511,449 | 86,495 | |||||
| Total current liabilities | 17,800,027 | 19,641,670 | |||||
| Long-term debt, net | 6,184,328 | 6,776,506 | |||||
| Operating lease obligations, less current portion | 13,760,114 | 14,999,687 | |||||
| Put warrants liabilities | 58,461 | 1,964,593 | |||||
| Other long-term liabilities | 287,930 | 287,930 | |||||
| Total liabilities | 38,090,860 | 43,670,386 | |||||
| Commitments and contingencies | |||||||
| Stockholders' equity: | |||||||
| Preferred stock, $0.001 par value; 1,000,000 shares authorized, | |||||||
| 10,000 issued and 10,000 outstanding at October 31, 2024 and April 30, 2024 | 10 | 10 | |||||
| Common stock, $0.001 par value; 85,000 shares authorized, | |||||||
| 26,959,681 issued and 26,959,681 outstanding at October 31, 2024 | |||||||
| 25,701,603 issued and 25,701,603 outstanding at April 30, 2024 | 26,960 | 25,702 | |||||
| Additional paid-in capital | 122,170,403 | 121,921,048 | |||||
| Accumulated deficit | (93,944,374 | ) | (89,670,145 | ) | |||
| Total stockholders' equity | 28,252,999 | 32,276,615 | |||||
| Total liabilities and stockholders' equity | $ | 66,343,859 | $ | 75,947,001 | |||
| ASPEN GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | |||||||||||||||
| Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
| Revenue | $ | 11,459,779 | $ | 13,828,847 | $ | 22,788,616 | $ | 28,468,719 | |||||||
| Operating expenses: | |||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization shown separately below) | 2,885,895 | 4,584,193 | 6,233,120 | 8,977,048 | |||||||||||
| General and administrative | 7,237,555 | 8,371,546 | 14,564,889 | 16,842,424 | |||||||||||
| Impairments of right-of-use assets and tenant leasehold improvements | 4,937,154 | — | 4,937,154 | — | |||||||||||
| Bad debt expense | 450,000 | 450,000 | 900,000 | 900,000 | |||||||||||
| Depreciation and amortization | 794,895 | 950,090 | 1,614,899 | 1,913,302 | |||||||||||
| Total operating expenses | 16,305,499 | 14,355,829 | 28,250,062 | 28,632,774 | |||||||||||
| Operating loss | (4,845,720 | ) | (526,982 | ) | (5,461,446 | ) | (164,055 | ) | |||||||
| Other income (expense): | |||||||||||||||
| Interest expense | (342,490 | ) | (1,040,720 | ) | (689,660 | ) | (1,977,201 | ) | |||||||
| Change in fair value of put warrant liability | 1,085,145 | — | 1,906,132 | — | |||||||||||
| Other income (expense), net | 2,925 | (4,035 | ) | 16,762 | 14,252 | ||||||||||
| Total other income (expense), net | 745,580 | (1,044,755 | ) | 1,233,234 | (1,962,949 | ) | |||||||||
| Loss before income taxes | (4,100,140 | ) | (1,571,737 | ) | (4,228,212 | ) | (2,127,004 | ) | |||||||
| Income tax expense | 46,225 | 40,076 | 46,017 | 124,247 | |||||||||||
| Net loss | (4,146,365 | ) | (1,611,813 | ) | (4,274,229 | ) | (2,251,251 | ) | |||||||
| Dividends attributable to preferred stock | (7,057 | ) | — | (148,209 | ) | — | |||||||||
| Net loss available to common stockholders | $ | (4,153,422 | ) | $ | (1,611,813 | ) | $ | (4,422,438 | ) | $ | (2,251,251 | ) | |||
| Net loss per share - basic and diluted available to common stockholders | $ | (0.16 | ) | $ | (0.06 | ) | $ | (0.17 | ) | $ | (0.09 | ) | |||
| Weighted average number of common stock outstanding - basic and diluted | 26,692,457 | 25,548,046 | 26,308,766 | 25,557,646 | |||||||||||
| ASPEN GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||
| Six Months Ended October 31, | |||||||
| 2024 | 2023 | ||||||
| (Unaudited) | (Unaudited) | ||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (4,274,229 | ) | $ | (2,251,251 | ) | |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
| Bad debt expense | 900,000 | 900,000 | |||||
| Depreciation and amortization | 1,614,899 | 1,913,302 | |||||
| Stock-based compensation | 190,836 | 305,581 | |||||
| Change in fair value of put warrant liability | (1,906,132 | ) | — | ||||
| Amortization of warrant-based cost | 7,000 | 14,000 | |||||
| Amortization of debt issuance costs | — | 156,020 | |||||
| Amortization of debt discounts | — | 193,020 | |||||
| Non-cash lease benefit | 107,696 | (399,201 | ) | ||||
| Impairments of right-of-use assets and tenant leasehold improvements | 4,937,154 | — | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | (762,744 | ) | (5,763,185 | ) | |||
| Prepaid expenses | (171,330 | ) | (19,140 | ) | |||
| Other current assets | 799,264 | (1,852,817 | ) | ||||
| Deposits and other assets | 25,695 | (384,030 | ) | ||||
| Accounts payable | (1,072,854 | ) | 665,283 | ||||
| Accrued expenses | 430,795 | 565,915 | |||||
| Due to students | (264,878 | ) | (89,095 | ) | |||
| Advances on tuition and deferred tuition | (965,151 | ) | 1,272,532 | ||||
| Other current liabilities | 424,954 | 578,940 | |||||
| Net cash provided by (used in) operating activities | 20,975 | (4,194,126 | ) | ||||
| Cash flows from investing activities: | |||||||
| Purchases of courseware and accreditation | (33,110 | ) | (120,863 | ) | |||
| Purchases of property and equipment | (565,068 | ) | (558,565 | ) | |||
| Net cash used in investing activities | (598,178 | ) | (679,428 | ) | |||
| Cash flows from financing activities: | |||||||
| Repayment of portion of 15% Senior Secured Debentures | (721,066 | ) | (100,000 | ) | |||
| Proceeds from 15% Senior Secured Debentures, net of original issuance discount and fees | — | 10,451,080 | |||||
| Repayment of 2018 Credit Facility | — | (5,000,000 | ) | ||||
| Payments of debt issuance costs | (155,376 | ) | (195,661 | ) | |||
| Net cash (used in) provided by financing activities | (876,442 | ) | 5,155,419 | ||||
| ASPEN GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (Unaudited) | ||||||
| Six Months Ended October 31, | ||||||
| 2024 | 2023 | |||||
| (Unaudited) | (Unaudited) | |||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | $ | (1,453,645 | ) | $ | 281,865 | |
| Cash, cash equivalents and restricted cash at beginning of period | 2,619,427 | 5,724,467 | ||||
| Cash, cash equivalents and restricted cash at end of period | $ | 1,165,782 | $ | 6,006,332 | ||
| Supplemental disclosure of cash flow information: | ||||||
| Cash paid for interest | $ | 689,660 | $ | 1,639,701 | ||
| Cash paid for income taxes | $ | 46,017 | $ | 24,525 | ||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||
| Accrued dividends | $ | 148,209 | $ | — | ||
| Relative fair value of warrants issued as part of the 15% Senior Secured Debentures | $ | — | 154,000 | |||
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, | |||||
| 2024 | 2023 | ||||
| (Unaudited) | (Unaudited) | ||||
| Cash and cash equivalents | $ | 827,780 | $ | 1,906,332 | |
| Restricted cash | 338,002 | 4,100,000 | |||
| Total cash, cash equivalents and restricted cash | $ | 1,165,782 | $ | 6,006,332 | |
