• 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) -- ˿����Ƶ. (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

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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:

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:

_____________________
NM – Not meaningful

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

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.

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:

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:

Nursing Students

Nursing student body for the past five quarters is shown below.

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:

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:

___________________
NM – Not meaningful

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 ˿����Ƶ.

˿����Ƶ. 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��

GAAP Financial Statements

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:

PHOENIX, Dec. 06, 2024 (GLOBE NEWSWIRE) -- ˿����Ƶ. (OTC Markets: ASPU) (“AGI”), an education technology holding company, today announced financial results for its first quarter of fiscal year 2025 ended July 31, 2024.

First Quarter Fiscal Year 2025 Summary Results

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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 for the three months ended July 31, 2024 and 2023, respectively.

² Non-GAAP financial measures. See reconciliations of GAAP to non-GAAP financial measures under "Non-GAAP–Financial Measures" starting on page 4.

“Over the past year, AGI has successfully addressed its key regulatory challenges, including the removal of Aspen University’s show cause directive by the Distance Education Accrediting Commission (DEAC) and AU’s transition off the HCM2 financial aid payment method with the Department of Education,” said Michael Mathews, Chairman and CEO of AGI. “Furthermore, we recently took steps to further reduce our operating expenses, and we restructured our debt, positioning the company to achieve positive cash flow and positive EBITDA and Adjusted EBITDA. These measures collectively strengthen our liquidity and position us for sustained financial stability, enabling AGI to reinvest in marketing and drive student enrollment growth by the end of fiscal year 2025.”

Mr. Mathews continued, “Following the completion of AU’s BSN Pre-licensure program teach-out in September 2024, our focus has shifted to positioning the company to expand enrollment in our traditional post-licensure nursing programs, with particular concentration on USU’s MSN-FNP program, now our highest LTV program at $17,820 per enrollment. With over a million RNs expected to exit the profession by 2030 due to retirement or burnout, and healthcare demand steadily increasing, addressing the need for FNP’s remains a critical priority.”

Fiscal Q1 2025 Financial and Operational Results (compared to Fiscal Q1 2024)

Revenue decreased 23% to $11.3 million compared to $14.6 million. The following table presents the Company’s revenue, both per subsidiary and total:

Aspen University (AU) revenue decreased by $2.9 million or 38%, with the Phoenix BSN Pre-Licensure program accounting for $1.45 million of the decrease. The active student body at AU decreased from 6,001 at July 31, 2023 to 4,145 at July 31, 2024 due to the continued maintenance level of marketing spend.

United States University (USU) revenue decreased 5% due primarily to a modest active student body decrease in USU's MSN-FNP program, the USU degree program with the highest concentration of students. The active student body at USU decreased from 2,590 at July 31, 2023 to 2,477 at July 31, 2024 due to the continued maintenance level of marketing spend.

GAAP gross profit decreased 23% to $7.5 million compared to $9.8 million, primarily due to lower revenue. Gross margin was 66% compared to 67%. AU gross margin was 61% versus 62% of AU revenue, and USU gross margin was 71% versus 72% of USU revenue.

AU instructional costs and services represented 31% of AU revenue, and USU instructional costs and services represented 26% of USU revenue. AU marketing and promotional costs represented 2% of AU revenue, while USU marketing and promotional costs represented 1% of USU revenue.

The following tables present the Company’s net income (loss) available to common stockholders, both per subsidiary and total:

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 4.

Liquidity

The Fiscal Q1 2025 ending unrestricted cash balance of approximately $1.3 million resulted from the timing of financial aid payments received from the Department of Education (DOE). The following three factors will help improve 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 DOE. 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 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.

Operating Metrics

New Student Enrollments

On a Company-wide basis, new student enrollments were down 19% year-over-year, but increased 3% sequentially. New student enrollments at AU decreased 34% year-over-year and at USU increased 5% year-over-year. The year-over-year company-wide decrease in new student enrollments is primarily the result of the on-going maintenance level of marketing spend. We anticipate we will increase marketing spend in late Fiscal 2025 to a level necessary to provide enrollments needed to grow the student body and increase positive operating cash flow.

New student enrollments for the past five quarters are shown below:

Total Active Student Body

Total active student body for the past five quarters is shown below:

Nursing Students

Nursing student body for the past five quarters are shown below:

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, Adjusted EBITDA Margin and Adjusted Gross Profit, 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.

AGI defines Adjusted EBITDA as EBITDA excluding: (1) bad debt expense; (2) stock-based compensation; (3) severance; and (4) non-recurring charges. The following table presents a reconciliation of net loss to EBITDA and Adjusted EBITDA and of net income (loss) margin to Adjusted EBITDA Margin:

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¹ Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenue. Adjusted EBITDA margin has certain limitations in that it does not take into account the impact on our consolidated statement of operations of certain expenses.

The following tables present a reconciliation of Net income (loss) to EBITDA and Adjusted EBITDA and of Net loss margin to Adjusted EBITDA margin by subsidiary:

^{_______________________}
NM - Not meaningful

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 and expected positive operating cash flow and positive EBITDA and future growth. 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 last restructuring plan. 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, competition from other online universities including the competitive impact from the trend of major non-profit universities using online education , the effectiveness of our future marketing and the impact of any Federal Reserve interest rate changes on the economy. 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 ˿����Ƶ.

˿����Ƶ. 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��

GAAP Financial Statements

(Continued)

(Continued)

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:

Under the previous HCM2 payment method, AU had to disburse student financial aid from its own institutional funds. AU was then required to submit a Reimbursement Payment Request (the Request) to the DOE, and reimbursement was received only after the DOE completed its review of the Request. With the transition to HCM1, AU will still need to disburse student financial aid from its own institutional funds, but AU can now submit disbursement records to the DOE system and immediately draw down the funds to cover those disbursements. This shift from HCM2 to HCM1 is expected to reduce the variability of the Company’s unrestricted cash balances.

About ˿����Ƶ.

˿����Ƶ. 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. For more information, visit www.aspu.com.

Contact Information:

Hayden IR
Kimberly Rogers
(385) 831-7337

Upon careful review of the record, the Commission determined that Aspen has made substantial progress toward demonstrating compliance with DEAC standards. Accordingly, the Commission voted to vacate the show cause directive. DEAC requested that Aspen keep the Commission informed on the status of the teach-out of students who are completing the Nursing Pre-licensure program through September 2024 and continue providing monthly and quarterly reports through January 2025.

The Commission also determined that Aspen is making satisfactory progress in addressing the accreditation standards that remain under a deferred review of the institution’s application to renew accreditation. The Commission will proceed to review additional documentation to be submitted by Aspen for consideration at its January 2025 meeting.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including our resumption of growth in Fiscal 2025. 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 the availability of cash to support resumption of marketing, the effectiveness of the marketing, the state of the economy during fiscal 2025 and successful resolution of ongoing regulatory matters.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 ˿����Ƶ.

˿����Ƶ. 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. For more information, visit .

Contact Information:

Hayden IR
Kimberly Rogers
(385) 831-7337

According to Broadridge, the virtual stockholder meeting platform provider, 18,215,780 shares of the Company’s common stock were represented at the meeting. Each share was entitled to one vote, establishing a quorum with shares representing approximately 71% of the Company’s outstanding voting power, either in person or by proxy. The proposal to approve an amendment to the Certificate of Incorporation (the “Charter Amendment”) of the Company to increase the number of shares of common stock authorized to 85 million shares was approved by a majority of the votes cast. Specifically, around 17,108,012 votes were in favor, representing approximately 94% of the shares voted on this proposal and approximately 67% of the total outstanding shares of common stock. Approximately 1,053,133 votes were cast against the proposal, and approximately 54,635 shares abstained. The affirmative vote of a majority of the votes cast was required to approve this proposal, which was approved by the Company’s stockholders. Abstentions had no impact on the outcome of this proposal.

Broadridge's information also confirmed that there were enough votes to approve all the proposals presented to the stockholders, rendering a vote on Proposal 2 unnecessary.

The Charter Amendment was with the Secretary of State of the State of Delaware on June 10, 2024.

About ˿����Ƶ.

˿����Ƶ. 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. For more information, visit .

Contact Information:

Hayden IR
Kimberly Rogers
(385) 831-7337

PHOENIX, May 02, 2024 (GLOBE NEWSWIRE) -- ˿����Ƶ. ("AGI" or the “Company”) (OTCQB: ASPU), an education technology holding company, today announced it entered into third and fourth amendments to its Senior Secured Debentures issued May 11, 2023 with JGB Management Inc. (“JGB”). The amendments, among other things, reduce the Company’s debt principal repayment obligations by up to nine months, provide for the prepayment of $500,000 of principal utilizing restricted cash, and made the Debentures convertible into common stock at $0.50 per share.

The Company also announced the signing of an agreement with the holders of $10 million of its convertible notes under which the Company issued the holders a new series of preferred stock convertible into common stock at $0.50 per share. The exchange eliminated associated interest and principal payment obligations.

The debenture amendments and convertible notes exchange agreement reduce debt service obligations, strengthen the company’s balance sheet, and provide it with more financial flexibility to further execute its business operations. For further information, please see the , filed May 2, 2024, on the OTC Markets website.

Michael Mathews, Chairman and CEO of Aspen Group, stated, "We are pleased to announce the successful execution of amendments to our private placement with JGB. Reducing our near-term debt service obligations allows us to maintain a stable cash position while demonstrating our dedication to servicing our debt. Furthermore, exchanging our convertible notes for preferred stock significantly strengthens the equity position on our balance sheet while also further enhancing cash flow by eliminating related cash interest and principal payments. We believe these changes demonstrate financial responsibility and position us to resume growth in Fiscal 2025.”

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including our resumption of growth in Fiscal 2025. 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 the availability of cash to support resumption of marketing, the effectiveness of the marketing, the state of the economy during fiscal 2025 and successful resolution of ongoing regulatory matters. 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 ˿����Ƶ.

˿����Ƶ. 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. For more information, visit www.aspu.com.

Contact Information:

Hayden IR
Kimberly Rogers
(385) 831-7337

• Gross margin increased by 300 basis points to 63%
• Operating loss improved 66% to ($0.5) million from ($1.5) million
• Narrowed net loss to ($1.6) million from ($2.3) million
• 4th consecutive quarter of positive EBITDA; generated positive cash from operations
• AGI total enrollment grew by 5% YoY and 34% sequentially; USU enrollment rose by 8% YoY
  

NEW YORK, Jan. 18, 2024 (GLOBE NEWSWIRE) -- ˿����Ƶ. (OTCQB: ASPU) (“AGI” or the "Company"), an education technology holding company, today announced financial results for its second quarter fiscal year 2024 ended October 31, 2023.

Second Quarter Fiscal Year 2024 Summary Results

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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 $1.0 million for the three and six months ended October 31, 2023 and 2022, respectively.

² Non-GAAP financial measures. See reconciliations of GAAP to non-GAAP financial measures under “Non-GAAP–Financial Measures” starting on page 5.

“In the second quarter of fiscal year 2024, we narrowed our net loss by 30% on a year-over-year basis, delivered our fourth consecutive quarter of positive EBITDA and generated cash from operations,” said Michael Mathews, Chairman and CEO of AGI. “Healthcare industry dynamics continue to create high demand for postgraduate nursing degrees from RNs. Notably, enrollments at Aspen University and United States University increased over the past two quarters with minimal internet marketing spend, a testament to the value of our programs and the strength of our university brands. As we near completion of the Aspen University pre-licensure program teach-out, we remain focused on sustaining positive cash flow from operations. We anticipate the pre-licensure teach-out will be substantially completed in Arizona by the end of January and completed in all other states by mid-year 2024.”
Mr. Mathews concluded, “Currently, we are graduating our final, and largest cohorts from the Phoenix pre-licensure program, and I am thrilled to announce that the NCLEX first-time pass rate in Arizona for the fourth calendar quarter ended December 31, 2023 has increased to 89% (N=93/105). The improvement reflects our ongoing commitments to increased program rigor and improved student test preparation.”

Fiscal Q2 2024 Financial and Operational Results (compared to Fiscal Q2 2023)

Revenue decreased by 19% to $13.8 million compared to $17.1 million. The following table presents the Company’s revenue, both per-subsidiary and total:

Aspen University's (“AU”) revenue decline of $3.0 million, or 29%, reflects the enrollment stoppage at the pre-licensure program campuses, which accounted for $2.3 million of the decrease, and lower post-licensure enrollments in prior quarters as a result of the decrease in marketing spend initiated in late Q1 Fiscal 2023. The active student body at AU decreased by 29% year-over-year to 5,679 at October 31, 2023 from 7,973 at October 31, 2022.

United States University (“USU”) revenue was down 3% compared to the prior period. MSN-FNP program enrollments decreased in previous quarters due to lower marketing spend initiated in late Q1 Fiscal 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 8% to 2,733 at October 31, 2023 from 2,984 at October 31, 2022.

GAAP gross profit decreased 15% to $8.7 million compared to $10.2 million primarily due to lower revenue associated with the teach-out of the pre-licensure program.

Gross margin was 63% compared to 60%. AU's gross margin was 61% versus 60%, and USU's gross margin was 67% versus 67%. The increase in gross margin is the result of lower marketing spend and lower instructional costs and services associated with the enrollment stoppage in the pre-licensure program.

AU instructional costs and services represented 31% of AU revenue, and USU instructional costs and services represented 30% of USU revenue. AU marketing and promotional costs represented 3% of AU revenue, and USU marketing and promotional costs represented 2% of USU revenue.

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

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.

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NM – Not meaningful

EBITDA improved by $1.0 million in Fiscal Q2 2024 to $0.4 million from a loss of $0.6 million. The improvement was primarily due to cost controls implemented in conjunction with the two restructurings implemented in Fiscal Q2 2023 and Fiscal Q4 2023 and the reduction of marketing spend to maintenance levels initiated in Fiscal Q1 2023. Included in Fiscal Q2 2024 EBITDA are general and administrative spend reductions of approximately $2.5 million, including $1.5 million related to decreased headcount associated with the restructuring plans. Additionally, marketing spend reductions of approximately $0.5 million are included in Q2 2024 EBITDA. Total EBITDA for the last four fiscal quarters was $2.7 million, as depicted in the table below:

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TTM – Trailing twelve months

Operating Metrics

New Student Enrollments

Total enrollments for AGI increased 5% from Q2 Fiscal `23 and 34% sequentially, despite the reduction in internet advertising spend across all programs to maintenance levels. The increase in enrollments reflects the demand for postgraduate nursing degrees, our unique and affordable monthly payment plans and students obtaining legacy pricing prior to September 2023 tuition price increases. By the end of Fiscal `24, we anticipate the resumption of marketing spend to a level necessary to provide enrollments needed to resume growth of the student body in fiscal 2025 while allowing for the generation of positive operating cash flow.

New student enrollments for the past five quarters are shown below:

New student enrollments, bookings and ARPU for Q2’24 versus Q2’23 are shown below (rounding differences may occur):

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¹ “Bookings” are defined by multiplying Lifetime Value (LTV) by new student enrollments for each operating unit. “ARPU” is defined by dividing total Bookings by total new student enrollments for each operating unit.

Total Active Student Body

Total active student body for the past five quarters is shown below:

Nursing Students

As of October 31, 2023, 6,902 of 8,412, or 82%, of all active students across both universities are degree-seeking nursing students. Of the students seeking nursing degrees, 6,624 are RNs studying to earn an advanced degree, including 4,192 at Aspen University and 2,432 at USU. The remaining 278 nursing students are enrolled in Aspen University’s BSN Pre-licensure program in the Phoenix, Austin, Tampa and Nashville metros. 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 reduction in marketing spend to maintenance levels.

Nursing student body for the past five quarters is shown below.

Liquidity

On October 31, 2023, the Company had unrestricted cash of $1.9 million and restricted cash of $4.1 million. Included in the unrestricted cash balance is $1.5 million related to the Second Amendment to the 15% Debentures under which the purchasers agreed to unrestrict $1.5 million of restricted cash associated with the Debentures. Subsequent to the closing of the quarter, AGI received $1 million from the reduction of the surety bond required by the state of Arizona. Additionally, prior to the end of January 2024, the Company is anticipating a $3.9 million student financial aid reimbursement from the Department of Education (“DoE”) which will allow the Company to pay down $1.5 million of the Debenture principal. After the Debenture principal repayment, the unrestricted cash balance is projected to exceed $2.0 million. Variability in the unrestricted cash balance is primarily due to the timing of financial aid reimbursements from the DoE under the Heightened Cash Monitoring 2 (“HCM2”) method of financial aid reimbursement.���� HCM2 requires the Company to make disbursements to students from its own institutional funds, and a request is then submitted to the DoE for reimbursement of those funds.

Cash provided by operations in Q2 Fiscal `24 was $0.4 million due to the receipt of HCM2 payments, and management believes the Company is positioned to continue generating positive operating cash flows during the remainder of Fiscal 2024 as a result of ongoing HCM2 cash receipts and ongoing cost controls. Cash used in operations for the six months ended October 31, 2023 was $4.2 million. The Company generated approximately $0.8 million of cash from the net loss adjusted for non-cash activities and used approximately $5.0 million of cash from changes in working capital primarily related to the timing of HCM2 payments and increased long-term monthly payment plan accounts receivable related to increased enrollments.

Additional Information

For additional information on the financial statements and performance, please refer to the ˿����Ƶ. Quarterly Report for the second quarter of fiscal year 2024 published on the Company’s website at , or the OTC Markets Aspen Group Quote page under the tab.

Conference Call

˿����Ƶ. will host a conference call to discuss its second quarter fiscal year 2024 results and business outlook on Thursday, January 18, 2024, at 4:30 pm ET. ˿����Ƶ. 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 13743216.

Subsequent to the call, a transcript of the audio cast will be available from the Company’s website at . There will also be a seven-day dial-in replay which can be accessed by dialing toll-free (844) 512-2921 (U.S.) or (412) 317-6671 (International), passcode 13743216.

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; and (4) non-recurring charges or income. 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:

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:

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NM – Not meaningful

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 our liquidity, receipt of payment from the U.S. Department of Education, our continuing generating positive cash flow from operations, and our estimates as to Lifetime Value, bookings and ARPU, changes in enrollments and the expected use of proceeds from the drawdown under the revolving credit facility. 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 the continued demand of nursing students and for new programs, student attrition, national and local economic factors including the potential impact of COVID-19, influenza and other respiratory viruses on the economy, the effectiveness of our future marketing campaigns, our reliance on third parties which may have differing priorities, the continued government spending on healthcare, any regulatory risks including the reauthorization of Aspen University by its accreditor, continued improvement in NCLEX scores, 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. 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 ˿����Ƶ.

˿����Ƶ. 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��

GAAP Financial Statements