Greetings, and welcome to the Aspen Group Inc.'s Q2 fiscal year 2024 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Rozanna Shulman, Corporate Controller. Thank you. You may begin.
Please note that the company's remarks made during this call, including answers to questions, include forward-looking statements, which are subject to various risks and uncertainties. These statements include anticipated future enrollment and revenue trends, revenue growth, our proposed marketing and other spending trends, our future growth and growth strategy, the timing concerning completion of the pre-licensure teach-out, the timing of receipt of funding from the DOE, and generation of positive operating cash flow. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. A discussion of risks and uncertainties related to Aspen Group's business is contained in its filings with Over-the-Counter Markets , including the quarterly report for the six months ended October 31, 2023, and in the press release issued this afternoon.
Other risks include our reliance on third parties who may have different priorities, government spending on healthcare, which partially creates the demand for nurses, and our ability to sublease real estate we lease. Aspen Group disclaims any obligation to update any forward-looking statements as a result of future developments. Also, I'd like to remind you that during this conference call, the company will discuss EBITDA and Adjusted EBITDA, which are non-GAAP financial measures, in talking about the company's performance. Reconciliation to the most directly comparable GAAP financial measures are provided in the tables in the press release issued by the company today. Please note that the press release is available on Aspen Group's website, aspu.com, on the IR Calendar page under News Events. It also will be available at otcmarkets.com/otcqb. A transcript of this conference call will be available for one year on the company's website.
Now, I will turn the call over to Mr. Mathews.
Good afternoon, and thank you for joining our earnings conference call for the Q2 of fiscal year 2024. I'm looking forward to sharing some exciting updates and achievements from Aspen Group in terms of our income statement performance, balance sheet improvements, and operating results. Let's start with our financial performance. In Q2 fiscal year 2024, we made significant progress in several key areas. We narrowed our net loss year-over-year by an impressive 30%, helped by our financial discipline amid the wind down of the Aspen University pre-licensure program. I'm delighted to announce that we achieved our fourth consecutive quarter of positive EBITDA. Additionally, we generated cash from operations during the second fiscal quarter. Enrollments at Aspen University and United States University have been on the rise over the past two quarters, even given our minimal internet advertising spend.
We attribute this to the robust demand we continue to see in the healthcare industry, especially for postgraduate nursing degrees for registered nurses. Our online postgraduate degrees at Aspen and the highly coveted MSN-FNP program at United States University provide students with flexible program and payment options, especially for working RNs, to attain advanced degrees and improve their career options. The enrollment growth not only reflects the value of our programs and our attractive monthly payment plans, but it also reflects the strength of our university brands. We instituted tuition increases effective September 1, 2023, and the sequential bump in Q2 enrollment certainly reflects a pull forward in advance of that increase. I'd like to switch now to our academic program achievements. We are proud to report that we are currently graduating our largest cohorts from the Aspen University BSN pre-licensure program in Arizona.
Notably, the NCLEX first-time pass rate in Arizona in the fourth calendar quarter, ending December 31, 2023, has increased to an impressive 89%. To be specific, in the fourth calendar quarter, 93 of 105 first-time NCLEX takers in Arizona passed the exam. Additionally, in Texas, 8 of 9 first-time NCLEX takers passed in the fourth calendar quarter, reflecting an 89% first-time pass rate. Finally, in Tennessee, we had our first graduate take the NCLEX exam in the final week of the Q4 and passed on the first time.
Our success in elevating the first-time pass rates for NCLEX scores in Arizona and other states underscores our steadfast dedication to enhancing program rigor and refining student test preparation, alongside various other enhancements that positively impact the outcomes of all pre-licensure students at Aspen University. Finally, we expect the teach-out of our pre-licensure program to be completed in Arizona this month and in all remaining states by mid-2024. Turning to our financial transparency, we want to assure you that the parent company, AGI, has remained current with the required OTC Markets quarterly financial filings. You can find these filings on our quote page on the OTC Markets website under the Disclosures tab. We have fulfilled our stated commitment to deliver positive EBITDA and have achieved this goal for the fourth consecutive quarter. From a liquidity perspective, we have positive news as well.
We generated over $400,000 of cash from operations in the quarter, which is attributed to our reduction of G&A spend and the receipt of two financial aid payments from the Department of Education at Aspen University. Prior to the end of January 2024, we are projecting an unrestricted cash balance exceeding $2 million. There are two factors contributing to the increase in projected unrestricted cash balance. First, the reduction of our surety bond in Arizona from $5.5 million to $2.5 million reduced our restricted cash balance by $1 million. We are currently seeking an alternative bond provider to further reduce the amount of cash that is restricted with a $2.5 million dollar bond, which could add an additional $1 million to our unrestricted cash balance.
Second, we anticipate we will receive a substantial financial aid payment with the Department of Education of approximately $3.9 million prior to the end of January 2024. Lastly, I want to address two closely related subjects. First, the Distance Education Accrediting Commission, or DEAC, show cause directive that was issued to Aspen University this past February. We underwent a special visit by a team of DEAC evaluators in October, which was implemented as part of the show cause directive, as well as our 2023 reaccreditation requirement. We anticipate receiving the commission's show cause and reaccreditation decision in approximately the next 60 days. Regarding Aspen University's Heightened Cash Monitoring 2, or HCM2 status, recall that the U.S. Department of Education placed the university on this federal financial aid status in February, immediately following the DEAC show cause directive.
Under HCM2, we successfully received four reimbursements thus far, and as previously noted, we anticipate receiving the fifth HCM2 reimbursement of $3.9 million by the end of January 2024. In conclusion, the Q2 of fiscal year 2024 has been marked by financial stability, improved academic performance with regards to our Aspen University NCLEX first-time pass rates, and progress with our DEAC show cause and reaccreditation process, and the Department of Education HCM2 reimbursements. There is one final legal item to note regarding the class action complaint in Arizona regarding the pre-licensure program. On January 9, 2024, a final settlement was approved by the Superior Court judge in Arizona, whereby Aspen University agreed to pay $550,000 in exchange for release of all claims of the settlement class, inclusive of attorneys' fees and costs.
$500,000 of the payment is covered by Aspen's E&O insurance policy, and the remaining $50,000 will be paid by Aspen University. Thank you for your continued support and confidence in Aspen Group. I will now hand the call over to Matt to cover the details of our Q2 financial results. Please go ahead, Matt.
Thank you, Mike, and good afternoon, everyone. In my comments on the quarterly results, I will refer to the Q2 that ended on October 31, 2023. Unless otherwise stated, all comparisons are to the prior year's Q2, ended October 31, 2022. As Mike mentioned in his remarks, we had a strong financial quarter, highlighted by two key factors. First, although our marketing spend was reduced to maintenance levels late in fiscal Q1 2023, enrollments at both universities increased this quarter. Total enrollments for AGI increased 5% from Q2 fiscal 2023, and 34% sequentially. Excluding the impact of the reduction of pre-licensure revenue from the teach-out, year-over-year revenue is down only 7% due to the high demand for postgraduate nursing degrees.
Second, we continue to benefit from cost controls implemented with the two restructurings in fiscal Q2 2023, and fiscal Q4 2023. Our year-over-year G&A expense is down 23%, and we generated positive operating cash flow in the quarter. Financial highlights for the quarter are as follows: Total revenue was $13.8 million versus $17.1 million, or a decrease of 19%. $2.3 million of the decrease is attributed to the teach-out of the pre-licensure program, and the remainder of the decrease resulted from lower post-licensure enrollments from Q3 fiscal 2023 through Q1 fiscal 2024... due to the effect of the decreased marketing spend. Gross profit and gross margin were $8.7 million and 63%, respectively, versus $10.2 million and 60%, respectively.
The year-over-year gross margin improvement is primarily a function of lower marketing spend and lower instructional costs and services associated with the enrollment stoppage in the pre-licensure program. Instructional costs for the quarter were $4.2 million, or 31% of revenue, down from $5.5 million, or 32% of revenue. The decrease in instructional costs as a percentage of revenue was primarily due to the decrease in students in the pre-licensure core curriculum as a result of the teach-out. The core curriculum of the pre-licensure program requires an increase in the ratio of instructors to students. Fewer students in the program disproportionately decrease overall instructional costs. Total marketing and promotional costs for the Q2 were $348 thousand, or less than 3% of total revenue, as compared to $824 thousand, or about 5% of revenue.
The decrease in marketing as a percentage of revenue resulted from decreased advertising spend across all programs to maintenance levels. We plan to resume marketing spend late in fiscal year 2024 to a quarterly targeted spend rate of $500,000. This level of spend is expected to provide the enrollments needed to resume growth of the student body in fiscal 2025, while allowing for the generation of positive operating cash flow. The quarter's general and administrative costs were $8.4 million, or 61% of total revenue, compared to $10.9 million, or 64% of total revenue. The year-over-year decrease in G&A spend is due to both the impact of the two restructurings initiated in fiscal 2023 and cost controls designed to reduce G&A spend across all functions, mainly corporate AGI.
Total net loss was $1.6 million, or a loss of $0.06 per basic and diluted share, compared to a net loss of $2.3 million, or a loss of $0.09 per basic and diluted share. From a unit perspective, Aspen University's net income for the quarter was $582,000, compared with $1.1 million. USU's net income was $1.6 million versus $1.8 million. Finally, AGI incurred a net loss of $3.8 million, compared to a net loss of $5.2 million. Included in the AGI loss is interest expense of $1 million, compared to $710,000. After the repayment of the $1.5 million of principal on our senior secured loan, our quarterly cash interest payments will be approximately $750,000.
Turning to non-GAAP financial measures, please see the reconciliation to GAAP contained in our press release issued today. Consolidated EBITDA for the quarter was positive $419,000, as compared to an EBITDA loss of $603,000. Again, strong post-licensure revenue, reduced marketing spend, and G&A cost control measures drove the improvement in EBITDA. As Mike mentioned, we achieved our fourth consecutive quarter of positive EBITDA, and cumulative positive EBITDA over the past four quarters is approximately $2.7 million. Q2 EBITDA, compared to the prior year quarter for each of the three units, was as follows: Aspen University generated $1.3 million, compared to $1.9 million. USU generated $1.8 million, compared to $1.9 million. AGI had an EBITDA loss of $2.7 million, compared to an EBITDA loss of $4.4 million.
Consolidated Adjusted EBITDA was $1.1 million, compared to $537,000. From a unit perspective, Aspen University generated Adjusted EBITDA of $1.6 million, compared to Adjusted EBITDA of $2.1 million, and Adjusted EBITDA margin was 22% as compared to 20%. USU generated Adjusted EBITDA of $2 million, compared to Adjusted EBITDA of $2.1 million, and Adjusted EBITDA margin of 30%, as compared to 32%. Finally, AGI Corporate incurred an Adjusted EBITDA loss of $2.5 million, compared to an Adjusted EBITDA loss of $3.7 million. Moving to the balance sheet.
As of October 31, 2023, our unrestricted cash and cash equivalents were $1.9 million, and restricted cash was $4.1 million, compared to a balance of $1.4 million and $4.4 million, respectively, at April 30, 2023. Included in the unrestricted cash balance is the release of $1.5 million associated with the second amendment to the 15% debentures. The 15% debentures originally required the company to maintain $2 million of restricted cash, and the second amendment decreased the requirement to $500,000.
We plan to repay the $1.5 million as a reduction of principal prior to the end of January 2024, and we issued JGB penny warrants equal to 4% of the outstanding stock of AGI. Subsequent to the closing of the quarter, we received $1 million from the reduction of the surety bond required by the state of Arizona. Additionally, as Mike mentioned, we anticipate the receipt of a $3.9 million reimbursement from the Department of Education for student financial aid prior to the end of January 2024. After the receipt of the Department of Education payment, the company's unrestricted cash balance is projected to exceed $2 million. Cash use and operations for the first six months of fiscal 2024 was $4.2 million. Importantly, though, cash generated from operations for the Q2 was positive $409,000.
In the Q1, we used $4.6 million of cash in operations due to delays in receiving government student financial aid payments after our placement on the HCM2 payment method and due to increased student AR, as strong enrollments increased use of the monthly payment plan. In the Q2, we generated $409,000 of cash from operations due to the processing of two HCM2 payments, totaling $4.8 million, and the impact of ongoing cost savings, which were offset by an increase in student accounts receivable due to continued strong enrollments. We had CapEx spend during the first six months of $600,000, primarily related to capitalized software.
Cash generated from financing activities for six months was $5.2 million, due to cash provided by the 15% debentures, offset by the repayment of outstanding borrowings under the $5 million credit facility, repayment of a portion of the outstanding 15% debentures, and expenses associated with the debenture offering. With respect to our share count, the weighted average number of common basic shares outstanding at the end of the quarter was 25,548,046, versus 25,305,363 in the year-ago quarter. We are not providing guidance at this time. That concludes our prepared remarks. I will now turn the call back to the operator for questions. Operator, please open the call for Q&A.
Thank you. Ladies and gentlemen, at this time, we'll be conducting a question and answer session. If you'd like to ask a question, you may press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment while we poll for questions. There are no questions in the queue at this time. I'd like to hand it back to management for closing remarks.
Thank you, everyone, for joining our Q2 fiscal 2024 earnings call. Look forward to speaking with you again in our Q3 earnings call in March. Have a good day. Thank you.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day!