BROADVIEW INSTITUTE INC

During the previous fiscal year, we introduced a technology-focused learning model where Broadview students and instructors began utilizing portable electronic devices in the classroom. This new format marks a transformation from textbook learning. During the quarter ended December 31, 2013, the majority of our students first received electronic learning devices, resulting in charges for devices and electronic learning content totaling $635,250. In subsequent quarters, distribution of these devices was largely limited to new students, although all students continue to be charged for electronic learning content. Similar billings for the quarter ended December 31, 2014 totaled $272,900.

  Expenses related to educational services and facilities decreased 21.5% to $3,136,350 for the quarter ended December 31, 2014 from $3,995,739 for the corresponding quarter of the previous year. The $859,389 decrease was primarily due to the cost of electronic learning devices being distributed to the majority of our students during the quarter ended December 31, 2013. Such costs totaled $451,889 for that quarter, compared to $67,457 for the quarter ended December 31, 2014, a decrease of $384,432, or 85.1%. Additionally, the continued decline in student enrollments has led to reduced payroll and related costs. Such costs decreased $294,477, or 19.1%, to $1,248,410 for the quarter ended December 31, 2014 from $1,542,888 for the corresponding quarter of the previous year. Additionally, scholarship expense decreased $54,982, or 26.0%, and student materials decreased $48,161, or 18.4%, due to declining enrollments.

During the previous fiscal year, we introduced a technology-focused learning model where Broadview students and instructors began utilizing portable electronic devices in the classroom. This new format marks a transformation from textbook learning. Fees charged to students in relation to electronic content and the learning devices totaled $734,752 for the nine months ended December 31, 2014, compared to $691,550 for the nine months ended December 31, 2013. However, other student fees, miscellaneous student charges and third party commissions earned on textbook sales to our students decreased by a total of $124,163 comparing the nine months ended December 31, 2014 to the corresponding period of the previous year. These decreases were largely due to the focus on the new learning model.

Expenses related to educational services and facilities decreased 10.2% to $9,484,251 for the nine months ended December 31, 2014 from $10,556,271 for the corresponding period of the previous year. The $1,072,020 decrease was primarily due to reduced payroll and related costs. Such costs decreased $550,614, or 11.8%, to $4,113,821 for the nine months ended December 31, 2014 from $4,664,435 for the corresponding period of the previous year. During the nine months ended December 31, 2013, we incurred $525,453 of cost related to supplying the majority of our students with electronic learning devices. In subsequent quarters, that cost decreased as primarily new students were the only ones to receive the devices, and as such, these costs decreased to $178,725 for the nine months ended December 31, 2014, a decrease of $346,728. Additionally in the prior year, we incurred $86,700 of additional regulatory costs that were not required during the nine months ended December 31, 2014.

Our cash flows used in operating activities has been primarily driven by net losses of $3,766,049 and $3,618,239 for the nine months ended December 31, 2014 and 2013. Additionally, accounts payable and accrued liabilities decreased $264,418 for the nine months ended December 31, 2014, and decreased $155,389 for the nine months ended December 31, 2013. Depreciation and amortization totaled $485,000 and $492,000 for the nine months ended December 31, 2014 and 2013.