Raj Sharma: So, the second half would be €“ would you aim for about 1,800 total enrollment, fourth quarter?
Michael Mathews: Yes, in that range. Yes.
Raj Sharma: Okay.
Michael Mathews: Anywhere between 1,500 and 1,800 a quarter, correct.
Raj Sharma: Got it.
Matt LaVay: And of course, there is obviously a lag between the enrollments and what happens in the student body, which is driving your revenue.
Raj Sharma: Sure.
Matt LaVay: And so by the second half of 2024, the student body as a whole will start to flip and start to grow again, and that includes what’s happening in the pre-licensure business, right. So, once you get into the second half of €˜24, the pre-licensure wind down has largely taken place. There is still some left that becomes less of a factor in what’s going on. And at the same time, the enrollments start to generate that new student body. And so that’s when you start to see the inflection point of enrollments actually increasing sequentially quarter-over-quarter.
Raj Sharma: Got it. And then €“ definitely helpful. And then the surety bond reduction caused the release from the collateral, and you said as pending, liquidity €“ that helps the liquidity, but when do you think you should have that money back?
Michael Mathews: It’s imminent.
Raj Sharma: It is imminent. Okay, great. And then just lastly on Phoenix and the four new campuses and sort of the teach-out, any indications on where we should look for revenues this year and the next year, has any of that changed?
Michael Mathews: No. Our estimates for pre-licensure, because we know precisely how many students in each of our markets will be taught out over the next 15 months to 18 months, we have a very good idea on exactly what the revenues are going to be. We are going to be in that like $11 million range for the full year, the full fiscal year that we are currently in fiscal 2023. And then it drops down into that $3 million or $4 million range in the final year, fiscal €˜24.
Raj Sharma: Got it. Thank you. That’s it for me. Thanks a lot. I will take it off.
Michael Mathews: Thanks Raj.
Operator: And our next question comes from the line of Brett Reiss with Janney Montgomery Scott. Please proceed with your question.
Brett Reiss: Yes. Mike, can you hear me?
Michael Mathews: Yes, Brett. Good afternoon Brett.
Brett Reiss: Hi Mike. Hi Matt. A question on the timing and how we extricate ourselves from the leases on the pre-licensure campuses, I mean you have got long-term leases, but you can’t sublet it until the teach-outs are over. What’s the timing factors there?
Michael Mathews: Yes, great question, Brett. So, just so you guys are aware, we typically, historically, for the campuses, we have had leases that are ranging in kind of the 7-year level, in the 7-year duration. And all the leases, once our teach-out is done, will be at least a couple of years in. So, we really only have about 5 years to go with those leases. We are actively €“ our commercial realtors, Colliers International, huge firm with local with €“ commercial realtors in each of our local areas. We have already had a good amount of activity in terms of showing these campuses to other nursing schools. And so what we are looking to do, Brett, is to actively sublet space in all of our pre-licensure locations by approximately January of next year, January of 2024, so about a year from now.
Our teach-out, it ends in Phoenix in April of €˜24 €“ sorry, yes, April €˜24 and in the summer of 2024 in these other locations. Now, one thing to be aware of is that, at this point, we are planning to keep our Phoenix campus location. And we are going to convert that building, that suite into a USU nurse practitioner immersion space, because we have decided to no longer conduct immersions in other locations and no longer conduct them in San Diego, all of our immersions in the future with thousands of students that are going to be in our Phoenix campus. So, we can very easily convert that location and utilize that space as the USU business continues to grow. So, we really only have to worry about our other four locations. And I am pretty confident we will have the sublets done by the time our teach-outs are over in each of those four locations.
