UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

☒ Annual Report Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, ~~2024~~2025

☐ Transition report pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

For the transition period from ______ to ______

Commission file number: 001-33810

American Public Education, Inc.

(Exact name of registrant as specified in its charter)


Delaware			01-0724376
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

111 West Congress Street, Charles Town, West Virginia			25414
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (304) 724-3700

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	APEI	Nasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of

the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.

7262(b)) by the registered public accounting firm that prepared or issued its audit report. þ

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐ No þ

The aggregate market value of the registrant’s common stock held by non-affiliates as of June 30, ~~2024~~2025, the last business day of the registrant’s most recently completed second fiscal quarter, computed by reference to the price at which the common stock was last sold on the Nasdaq Global Select Market on that date, was approximately $~~279~~484 million.

The total number of shares of common stock outstanding as of March 510, ~~2025~~2026, was 1718,~~995~~380,~~753~~439.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the registrant’s Definitive Proxy Statement for its ~~2025~~2026 Annual Meeting of Stockholders (which is expected to be filed with the Commission within 120 days after the end of the registrant’s ~~2024~~2025 fiscal year) are incorporated by reference into Part III of this Annual Report.

AMERICAN PUBLIC EDUCATION, INC.

FORM 10-K

INDEX

		Page
PART I
Item 1	Business	15
Item 1A	Risk Factors	4748
Item 1B	Unresolved Staff Comments	7879
Item 1C	Cybersecurity	7879
Item 2	Properties	7980
Item 3	Legal Proceedings	80
Item 4	Mine Safety Disclosures	8081
PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	8081
Item 6	[Reserved]	8384
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8384
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	99
Item 8	Financial Statements and Supplementary Data	~~100~~101
Item 9	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	~~140~~136
Item 9A	Controls and Procedures	~~140~~136
Item 9B	Other Information	~~143~~139
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspection	~~144~~141
PART III
Item 10	Directors, Executive Officers, and Corporate Governance	~~145~~142
Item 11	Executive Compensation	~~145~~142
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~145~~142
Item 13	Certain Relationships and Related Transactions, and Director Independence	~~145~~142
Item 14	Principal Accounting Fees and Services	~~145~~142
PART IV
Item 15	Exhibits and Financial Statement Schedule	~~146~~143
Item 16	Form 10-K Summary	~~146~~143

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, or this Annual Report, including the sections entitled “Business”, “Risk Factors”, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, contains forward-looking statements. We may, in some cases, use words such as “project,” “believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “should,” “would,” “could,” “potentially,” “will,” or “may,” or other words or expressions that convey future events, conditions, circumstances, or outcomes to identify these forward-looking statements. Forward-looking statements in this Annual Report include statements about:

•changes in and our efforts and ability to comply with the extensive regulatory framework applicable to our industry, including the 90/10 Rule and financial responsibility standards, as well as state law and regulations and accrediting agency requirements, and the expected impacts of our efforts to comply and any non-compliance;

•federal appropriations and other budgetary matters, including government shutdowns, and the estimated impact of such matters on us and our prospective and current students, and our efforts to mitigate impacts, including with respect to the U.S. federal government shutdown from October to November 2025;

•actions by the U.S. Department of Education, or ED, institutional and programmatic accreditors, and state authorizing agencies and expectations regarding the effects of those actions;

•our ability to manage, grow, and diversify our business and execute our business initiatives and strategy;

•the impact, timing, projected benefits, and terms of the planned combination of American Public University System, or APUS, Rasmussen University, or RU, and Hondros College of Nursing, or HCN, into one consolidated institution that will be a system encompassing all APUS, RU, and HCN programs, campuses, and operations, or the Combination;

•legislative and regulatory changes, shifts in regulatory priorities, restrictions on the function, operations, and budgets of federal agencies, including ED, as a result of U.S. presidential and administration transitions and presidential directives regarding governmental actions;

•our ~~cash~~ability ~~needs~~to ~~and~~maintain, ~~expectations~~develop, ~~regarding~~and ~~cash~~grow ~~flow~~our ~~from~~technology ~~operations~~infrastructure, including ~~the~~with ~~impacts~~respect ofto ~~our~~any ~~debt~~current ~~service~~or ~~and~~planned ~~the~~use ~~dividend~~of ~~payments~~artificial ~~that~~intelligence, ~~are~~or ~~required~~AI, toor betransform ~~paid~~our ontechnology ~~our~~infrastructure ~~Series~~and Arealize ~~Senior~~the ~~Preferred~~benefits ~~Stock~~of any such transformation;

•our cash needs and expectations regarding cash flow from operations, including the impacts of our debt service;

•our ability to undertake initiatives to improve the learning experience, attract students who are likely to persist, and improve student outcomes;

•changes to and expectations regarding our student enrollment, net course registrations, and the composition of our student body, including the pace of such changes;

•our ability to maintain, develop, and grow our technology infrastructure, including with respect to any current or planned use of artificial intelligence, or AI, to support our student body and remain competitive;

•our conversion of prospective students to enrolled students and our retention of active students;

•our ability to update and expand the content of existing programs and develop new programs to meet emerging student needs and marketplace demands, and our ability to do so in a cost-effective manner or on a timely basis;

•the branding and, marketing of our institutions;

•our ability to leverage our investments in support of our initiatives, students, and institutions;

•our maintenance and expansion of our relationships and partnerships and the development of new relationships and partnerships;

•actions by the Department of Defense, or DoD, or branches of the U. S. Armed Forces, including actions related to participating in DoD tuition assistance, or TA programs, our responses to those actions, and expectations regarding the effects of those actions and responses;

•federal appropriations and other budgetary matters, including government shutdowns;

•changes in enrollment in postsecondary degree-granting institutions and workforce needs;

•the competitive environment in which we operate;

•our ability to achieve the intended benefits of our cost savings initiatives and revenue-generating efforts;

•the expected benefits of insourcing and outsourcing information technology services to our operations and third-party vendors, respectively;

•the expected impact on our students and our business from campus closures and consolidations;

•our ability to redeem our Series A Senior Preferred Stock at all or on terms favorable to the Company;

•our financial performance generally; and

•our expectations and estimates regarding tax and accounting matters.

Forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance, taking into account information currently available to us, and are not guarantees of future results. There are a number of important factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements. Risks and uncertainties involved in the forward-looking statements include, among others, the factors set forth below in “Summary of Risk Factors”.

Forward-looking statements should be considered in light of these factors and the factors described elsewhere in this Annual Report, including in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. You should read these factors and the other cautionary statements made in this Annual Report as being applicable to all related forward-looking statements wherever they appear in this Annual Report. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance, or achievements may vary materially from any future results, performance, or achievements expressed or implied by these forward-looking statements.

We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date of this Annual Report. We undertake no obligation to publicly update any forward-looking statements after the date of this Annual Report, whether as a result of new information, future events, or otherwise, except as required by law.

Summary of Risk Factors

We are subject to a variety of risks and uncertainties, including risks that could have a material adverse effect on our business, financial condition, results of operations, and cash flows. The following summary of the principal factors that make an investment in our securities speculative or risky should not be relied upon as an exhaustive summary of the material risks facing us. You should read the following summary together with the more detailed description of risks that we deem material described under “Risk Factors” in Item 1A of this Annual Report and the other information contained in this Annual Report before investing in our securities.

Risks Related to Attracting and Retaining Students

•We depend on the effectiveness of our ability to attract students who persist in our programs. If we are unable to effectively market our programs or expand into new markets, our results of operations would be negatively affected.

•Enrollments and course registrations byhave ~~active-duty~~been, ~~service~~and ~~members~~ may in the future be, adversely affected by factors not directly related to education programs, including changes in military activity, budgets, and ~~budgets~~government shutdowns.

•Declines in enrollments at RU as a result of failure to meet applicable National Council Licensure Examination, or NCLEX, benchmarks could materially adversely affect RU’s and our profitability, financial condition, results of operations, and cash flows.

•Changes our institutions may make to ~~improve~~ the student experience and enhance their ability to identify and to enroll students who are likely to succeed may adversely affect enrollment, profitability, financial conditions, and results of operations.

•Continued strong competition in the postsecondary education market could decrease our institutions’ market share and increase our cost of acquiring students, and if we are unable to successfully adjust to future market demands on a timely basis and in a cost-effective manner, our performance may be impaired.

•Consolidation and closure of campuses or termination of programs on certain campuses may adversely impact us or our institutions.

Risks Related to the Regulation of Our Industry

•If we or our institutions fail to comply with regulatory requirements or to maintain institutional accreditation, we could face a decline in student enrollment, revenue, results of operations, or cash flows, sanctions or liability, and significant restrictions on operations, including loss of the ability to grant degrees or participate in ED Title IV programs, ~~DoD~~ TA programs, and education programs administered by the U.S. Department of Veterans Affairs, ~~benefits~~or VA.

•If one of our institutions does not comply with the “90/10 Rule” for two consecutive years, it or they will lose eligibility to participate in federal student financial aid programs.

•The One Big Beautiful Bill Act may adversely impact us or our students’ ability to participate in federal student financial aid programs, which could have a significant adverse impact on enrollments and our business, operations, and financial results.

•ED’s gainful employment requirements could materially and adversely affect our business.

•The failure to meet ~~applicable~~certain ~~National~~of ~~Council~~our ~~Licensure~~programs’ ~~Examination~~applicable NCLEX standards could reduce our enrollments, revenue, and cash flow, lead to adverse actions by state boards of nursing, and limit our ability to offer or force us to close educational programs.

•Our Illinois ADN program was previously adversely impacted by regulatory action, and may be in the future.

•The inability of our graduates to obtain outcomes in their chosen fields of study could reduce our enrollments and revenue, limit our ability to offer educational programs, and potentially lead to litigation that could be costly to us.

•ED rules related to borrower defense to repayment claims may create significant liability.

•Government and regulatory agencies and third parties may conduct compliance reviews, bring claims, or initiate investigations, enforcement actions, or litigation against us.

Risks Related to Our Business

•Our student registrations, revenue, and cash flow have been adversely impacted, and we could experience ~~additional~~ adverse impacts as a result of the Armed Forces’ transition to new systems for soldiers to request TA or accessing VA education benefit programs.

•Economic and market conditions in the United States and abroad and changes in interest rates could affect our enrollments, success with placement and persistence, cohort default rates and ability to access additional capital.

•Our business could be harmed if we experience a disruption in the ability to process Title IV financial aid.

•The Combination may not be completed, or may not be completed on the terms currently contemplated, and if it is, the expected benefits may not be realized, any of which could have a material adverse impact on our reputation, business, financial condition, and results of operations.

•Business combinations and acquisitions may be difficult to integrate, disrupt our business, dilute stockholder value, or divert management attention, and we may not realize the expected benefits of any consummated acquisitions. Efforts to diversify our business model may provide challenges that we are not prepared or able to address.

•We have implemented a shared services model for services to our institutions, and challenges encountered due to the ongoing operation and expansion of this model could cause strategic or operational challenges and adversely impact us.

•We rely on third-party vendors whose service may be of lower quality than ours, whose responsiveness may be less timely than ours, and whose compliance practices may increase our operational and compliance risk.

•We have incurred ~~substantial~~ indebtedness, and the cost of servicing that debt could adversely affect our business and financial results,. ~~and~~Our webusiness may not generate sufficient cash flow, including following implementation of cost savings initiatives, and future capital or borrowings may be ~~able~~unavailable to us in ~~the~~an ~~future~~amount sufficient to enable us to service our debt in the future or fund our other liquidity needs.

•Our Series A Senior Preferred Stock provides rights, preferences, and privileges that are not held by our common stockholders and is senior to our common stock.

•If we are unable to attract, retain, and develop skilled personnel, our business and growth prospects could be severely harmed, and changes in management could cause disruption and uncertainty.

Risks Related to Our Technology Infrastructure

•Transitioning outsourced RU information technology functions to internal functions and a managed service provider may not be efficient or cost-effective or may pose other operational challenges.

•We have expended, and need to continue to expend, time, money, and resources into our institutions’ information technology, which could adversely affect our systems, controls, and operating efficiency, and those of our institutions.

•Significant information technology system disruptions could negatively impact our ability to generate revenue and could damage our reputation, limiting our ability to attract and retain students.

•Cybersecurity incidents could compromise sensitive information and cause system disruptions and significant damage to our business and reputation.

•Failure to comply with privacy laws or regulations could have an adverse effect on our business.

•Increased use of AI may present operational, reputational, legal, regulatory, and competitive risks and could result in additional costs, each of which could materially and adversely affect our business, financial condition, and results of operations.

PART I

ITEM 1. BUSINESS

COMPANY OVERVIEW

American Public Education, Inc., or APEI, provides online and campus-based postsecondary education to approximately ~~106~~108,~~700~~600 students, ~~and career learning to approximately 24,600 individuals,~~ through our subsidiary institutions. Our institutions offer purpose-built education programs ~~and career learning~~ designed to prepare individuals for productive contributions to their professions and society and to offer opportunities designed to advance students in their current professions or to help them prepare for their next career.

Our Vision and Mission

Our vision is for education to transform lives, advance careers, and improve communities. Our mission is to Power Purpose, Potential and Prosperity for Those in Service to Others. Our institutions of advanced learning are purpose-built to prepare service-minded students for employment, careers, and leadership in a diverse and changing world. Many of our students are from underserved populations for whom our institutions can transform their and their families’ lives. We are the number one educator of active-duty military and of veterans through American Public University System. We are a national leader in pre-licensure nursing education, focused on a Diploma in Practical Nursing, or PN ~~degree~~diploma, and an Associate Degree in Nursing, or ADN ~~degree~~, through Rasmussen University and Hondros College of Nursing., Weas ~~operate~~well ~~one~~as ofa ~~the~~Bachelor ~~largest providers~~ of ~~training~~Science toin ~~the~~Nursing, ~~federal~~or ~~government~~BSN ~~and~~degree, ~~public workforce~~ through ~~Graduate~~Rasmussen ~~School USA~~University.

Our Institutions

We have ~~four~~three subsidiary institutions: American Public University System; Rasmussen University; and Hondros College of Nursing~~; and Graduate School USA~~.

American Public University System

American Public University System, or APUS, provides online postsecondary education to approximately 88,~~400~~700 adult learners. APUS traces its roots to American Military University, or AMU, which was founded in 1991, as a distance-learning, graduate-level institution for military officers seeking an advanced degree in military studies. Since then, APUS has broadened its focus to include veterans, extended military families, and other public service and service-minded communities, with a focus on educating those who serve,. ~~and~~APUS has two brands: AMU, which is focused on educating students from the military, and national security, ~~military-affiliated and service~~ communities, ~~like~~and ~~police,~~military ~~firefighters,~~families ~~emergency personnel,~~ and ~~government employees~~veterans, and American Public University, or APU, which is focused on educating career-focused working adults with an emphasis on educating professionals working in service-~~related~~minded communities, including nursing, public health, public administration, and business administration. Today, while the majority of APUS students are undergraduate-level, students are also enrolled in its certificate, graduate, and doctoral programs.

APUS is exclusively an online institution of higher learning, ~~designed~~purpose-built to meet the needs of the ~~military,~~communities ~~military-affiliated,~~it ~~public service, and working adult students~~serves. Many of its students serve in positions requiring extended and irregular work schedules, are on-call for rapid response missions, participate in extended deployments and exercises, travel or relocate frequently, and often must balance family and work demands. Although APUS’s focus has broadened since its founding, it continues to have an emphasis on its relationship with the military community. As of December 31, ~~2024~~2025, approximately 6562% of APUS’s students self-reported that they served in the military on active duty at the time of initial enrollment, and approximately 1215% of APUS’s students self-reported that they are a military veteran. The remainder of APUS’s students are other military or military-affiliated professionals (such as reservists or National Guard members), family members of veterans and active-duty military and public service professionals (such as law enforcement personnel or other first responders), and other non-military students (such as working adult students ~~and military spouses~~).

APUS is institutionally accredited by The Higher Learning Commission, or HLC, aan ~~regional~~institutional accrediting agency recognized by the U.S. Department of Education, or ED. Most other higher education institutions accept APUS’s courses for transfer credit as a result of this accreditation. For more details on APUS’s HLC accreditation, see “Our Institutions and Operations – Our Institutions – Accreditation” and “Regulatory Environment – Accreditation – Institutional Accreditation” below.

Rasmussen University

RU provides nursing- and health sciences-focused postsecondary education to approximately 1415,~~600~~900 students at its 2018 campuses inacross ~~six~~five states and online. AtNot ~~the~~included ~~beginning~~in ofthese ~~its~~counts ~~124-year~~are ~~history,~~the RUGreen ~~focused on educating business students to prepare them for practical careers in bookkeeping~~Bay, ~~secretarial~~Wisconsin ~~services,~~campus ~~and accounting. RU’s foundation of education~~ that ~~transforms~~was ~~lives~~closed ~~created~~effective anDecember ~~institution built to serve those not typically served by traditional higher education. While RU continues to offer programs across a broad range of study including business~~31, ~~technology~~2025, and ~~education,~~the ~~it expanded its breadth and embarked on providing healthcare education in 2006. Today~~Wausau, RUWisconsin ~~offers a comprehensive “ladder” of nursing degrees~~campus, ~~including~~which ~~pre-licensure~~RU PNintends ~~and ADN degrees, post-licensure Bachelor of Science in Nursing, or BSN, and Registered Nurse, or RN,~~ to ~~BSN~~close ~~degrees,~~on ~~Master~~December ~~of Science degrees in Nursing~~31, ~~Specialties~~2026. ~~and~~At ~~Nurse~~the ~~Practitioner, and a Doctorate of Nurse Practice.~~

RU is committed to innovation in program delivery. For example, virtually every nursing program at RU incorporates online content alongside lab and clinical or classroom components. As of December 31, 2024, on-ground enrollment was approximately 6,300, of which approximately 5,500 students were pursuing nursing degrees at RU, approximately 90% of whom were enrolled in RU’s pre-licensure nursing degree programs. At December 31, 2024, online enrollment was approximately 8,300 students.

beginning of its 125-year history, RU focused on educating business students to prepare them for practical careers in bookkeeping, secretarial services, and accounting. RU’s foundation of education that transforms lives created an institution built to serve those not typically served by traditional higher education. While RU continues to offer programs across a broad range of study including business, technology, and education, it expanded its breadth and embarked on providing healthcare education in 2006. Today, RU offers a comprehensive “ladder” of nursing degrees, including a pre-licensure Diploma in PN, ADN, and BSN degree, as well as the post-licensure RN to BSN degree, Master of Science in Nursing degree and Doctorate of Nursing Practice. In addition, RU also offers a post-graduate nursing certificate.

RU is committed to innovation in program delivery. For example, virtually every nursing program at RU incorporates online content alongside lab and clinical or classroom components. As of December 31, 2025, on-ground enrollment was approximately 7,100 students, of which approximately 6,200 were pursuing nursing degrees at RU, approximately 90% of whom were enrolled in RU’s pre-licensure nursing degree programs. At December 31, 2025, online enrollment was approximately 8,800 students.

RU is institutionally accredited by HLC with an Open Pathway designation, and all of RU’s Nursing programs are programmatically accredited by specialty nursing accrediting bodies. As with APUS, most other higher education institutions accept RU’s courses for transfer credit as a result of RU’s HLC accreditation.

Hondros College of Nursing

HCN provides nursing education to approximately 34,~~700~~000 students ~~across~~at eight campuses inacross three states. HCN offers pre-licensure nursing programs that are designed to prepare individuals for productive careers through both a PN ~~degree~~diploma and an ADN ~~degree~~, and ~~two~~a Direct Entry ADN ~~degree~~option ~~options~~ that offer an accelerated graduation pathway for students who meet certain transfer credit, academic, and entrance exam requirements.

HCN’s students principally receive on-campus instruction at one of HCN’s campuses and online for certain courses for those that prefer remote course learning. As of December 31, ~~2024~~2025, approximately 6568% of HCN students were enrolled in a PN program and 3532% were enrolled in an ADN program.

HCN is institutionally accredited by the Accrediting Bureau ~~for~~of Health Education Schools, or ABHES, a national accrediting agency recognized by ED. HCN’s PN program is accredited by the National League for Nursing Commission for Nursing Education Accreditation, or NLN CNEA.

Graduate School USA

GSUSA, based in Washington, DC, is one of the largest providers of career learning to the federal government and public employee workforce. We acquired substantially all of the assets of GSUSA on January 1, 2022, advancing our focus on delivering training that provides students with pathways to employment and career advancement. GSUSA provides contract training to more than 100 federal government agency customers and through direct enrollment by federal, state, and municipal government employees, contractors, and non-government employees.

GSUSA provides career learning online as well as in-person at its headquarters facility in Washington, D.C. and at government and customer sites. GSUSA offers a catalog of more than 300 courses specializing in foundational and continuing professional development, as well as leadership training and practice management through its Center for Leadership and Management and Government Audit Training Institute. GSUSA trained over 24,600 individuals in 2024.

GSUSA is accredited by the Accrediting Council for Continuing Education and Training, or ACCET.

Our Segments

WeFor ~~have~~the periods covered by this Annual Report, we had three reportable segments: the APUS Segment; the RU Segment; and the HCN Segment. Unallocated corporate activity, eliminations, and GSUSA’s results prior to the GSUSA Sale Date are included in “Corporate and Other” in the Consolidated Financial Statements. Financial information regarding each of our reportable segments is reported and discussed in this Annual Report in the sections entitled “Financial Statements and Supplementary Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Beginning in fiscal year 2026, we will have two reportable segments: APU Global, formerly the APUS Segment, and RU Health+, the businesses that formerly comprised the RU Segment and HCN Segment.

~~The following information for our segments is as of and for the year ended December 31, 2024.~~6

~~2024~~The ~~Developments~~following information for our segments is as of and ~~Future~~for ~~Financial~~the ~~Objectives~~year ended December 31, 2025.

2025 Developments and Future Financial Objectives

The Planned Combination of APUS, RU, and HCN

OnIn ~~January 28,~~ 2025, we announced ~~our~~the ~~plan~~planned tocombination ~~combine~~of APUS, RU, and HCN ~~into one consolidated HLC-accredited institution that will be a university system encompassing all APUS~~, ~~RU,~~or ~~and~~the ~~HCN programs~~Combination, ~~campuses,~~which ~~and~~will ~~operations,~~result orin ~~the~~a ~~Combination. The~~ combined institution ~~will be~~ named American Public University System, orcomprised ~~the Combined Institution. As a result~~ of ~~the Combination, the Combined Institution will have~~ two divisions, ~~tentatively~~ named (i) ~~APUS~~APU Global, comprised of AMU and APU, and (ii) ~~Rasmussen~~RU Health+, comprised of RU’s campus-based and online nursing programs, RU’s healthcare programs, HCN’s campus-based nursing and healthcare programs, and RU’s non-healthcare programs. The Combination constitutes a Change of Control, ~~with~~Structure ~~final~~or ~~division~~Organization ~~names~~pursuant to beHLC ~~determined~~policy ~~closer~~and, accordingly, we were required to ~~closing~~obtain ofHLC approval prior to effectuating the Combination. ~~The~~In ~~structure~~December ~~will~~2024, ~~allow~~APUS ~~each~~and ~~institution~~RU jointly submitted an application for Change of Control, Structure or Organization to ~~continue~~HLC. Subsequently, ED informed us that we would need to ~~serve~~follow ~~its~~a ~~particular~~different ~~student~~process ~~populations~~to ~~while~~implement ~~benefiting~~the ~~from~~Combination ~~being~~that ~~part~~entails two steps instead of aone: ~~single~~(i) ~~university~~merger ~~system~~of the legal entities that own and operate APUS, RU, and HCN, with the APUS entity surviving following the merger, and (ii) combination of the institutions into one HLC-accredited institution. ~~The~~As ~~structure~~a isresult ~~designed~~of this process change, HLC required APUS and RU to ~~leverage~~submit ~~each~~a ~~institution’s~~new ~~strengths~~joint application for Change of Control, Structure or Organization to ~~focus~~HLC ~~our~~in ~~efforts~~September on2025 ~~supporting~~containing substantially the ~~military~~same ~~and~~information ~~veterans~~that had been submitted previously and ~~expanding~~reflecting ~~our~~the ~~nursing~~two-step process. In February 2026, HLC approved the continuation of accreditation of APUS and ~~healthcare~~RU ~~platforms~~after tothe ~~better~~legal ~~serve~~entity ~~our~~merger ~~students.~~with Wean ~~believe~~acknowledgment ~~combining~~that ~~our~~the ~~subsidiary~~intent is to eventually consolidate the three institutions into aone ~~single~~HLC ~~university~~accreditation. ~~system~~ABHES has also informed HCN that it will ~~strengthen~~continue ~~the~~HCN’s ~~financial~~ABHES ~~position~~accreditation ofafter ~~our~~the ~~Company~~legal asentity amerger. ~~whole~~On March 2, ~~enable~~2026, uswe tocompleted the merger of the legal entities that own and operate APUS, RU, and HCN, with ~~greater~~the ~~efficiency~~APUS entity surviving the merger, and ~~facilitate~~subsequently ~~innovation~~notified ~~across~~ED that the ~~Company~~merger ~~through~~occurred ~~more~~and ~~direct~~resulted ~~collaboration~~in ~~among~~RU and HCN being directly owned by the ~~educational~~same ~~divisions~~legal entity that directly owns APUS. We ~~anticipate~~currently ~~completing~~expect to complete implementation of step two of the Combination in the third quarter of ~~2025~~2026, subject to obtaining required approvals ~~and ED taking related actions~~. For additional details regarding regulatory treatment of the Combination, see “Regulatory Environment – Accreditation – Institutional Accreditation” and “Regulatory Environment – Accreditation – The Planned Combination of APUS, RU, and HCN”, and for additional information regarding risks related to the Combination, see the Risk Factor with the caption beginning “The planned combination of APUS, RU, and HCN …. . . .”

~~Rasmussen~~U.S. ~~University~~Federal ~~Regulatory~~Government ~~Metrics~~Shutdown

~~RU’s~~On ~~leadership~~October ~~team~~1, ~~continued~~2025, the U.S. federal government shut down due to ~~focus~~a ~~throughout~~failure ~~2024~~by onCongress ~~improving~~to ~~various~~pass ~~regulatory~~appropriations ~~metrics~~legislation, atresulting RUin, ~~particularly~~among ~~National~~other ~~Council~~things, ~~Licensure~~suspension ~~Examination~~of the DoD TA programs and ultimately an inability of APUS students seeking to use TA as a payment source to register, or ~~NCLEX~~in some cases stay registered, ~~pass~~for ~~rates~~courses. WeIn ~~increased~~connection ~~our~~with ~~focus~~this onshutdown, ~~these~~which ~~metrics~~ended inNovember ~~2024~~12, ~~partially~~2025, ~~because~~APUS ~~RU’s~~TA ~~ADN~~course ~~program~~registrations ~~enrollment~~decreased ~~had~~in ~~been~~the ~~adversely~~fourth ~~impacted~~quarter by2025 ~~both~~compared ~~voluntary~~to ~~and~~the ~~imposed~~prior ~~enrollment~~year ~~caps~~period. ~~imposed~~This inwas ~~large~~the ~~part~~first ~~due~~time tosince ~~NCLEX~~2013 ~~pass~~that ~~rates~~APUS ~~below~~had ~~requisite~~dropped ~~state~~course ~~thresholds,~~registrations as ~~discussed~~a ~~further~~result inof ~~the~~a ~~Risk~~government ~~Factor captioned~~

~~“Declines~~shutdown inbecause ~~enrollments~~the atDefense RUAppropriations ~~could~~Bill, ~~materially~~which ~~adversely~~annually ~~affect~~funds ~~RU’s~~TA, ~~and~~was ~~our~~not ~~profitability,~~passed ~~financial~~prior ~~condition,~~to ~~results~~October ~~of operations~~1, ~~and cash flows”~~2025. InThis ~~2024,~~shutdown wehad ~~saw~~an ~~improvements~~adverse toimpact RUon ~~NCLEX~~APUS’s ~~pass~~course ~~rates~~registrations, ~~including~~which inimpacted ~~the~~APUS’s ~~ADN~~and ~~program~~our ~~pass~~cash ~~rates~~flows, atresults ~~nearly~~of ~~every campus~~operations, asand ~~compared~~financial ~~to early 2023~~condition. WeSee ~~believe these improvements were driven by initiatives put in place by RU~~“Management’s ~~leadership~~Discussion ~~during~~and ~~the~~Analysis ~~last~~of ~~two~~Financial ~~years~~Condition asand ~~well~~Results asof byOperations ~~changes~~– toOverview ~~the~~– ~~NCLEX that were implemented in April 2023~~U.S. ~~NCLEX~~Federal ~~pass~~Government ~~rates~~Shutdown”, ~~and~~for ~~regulatory metrics~~ more ~~generally will continue to be an area of focus~~information.

90/10 Compliance

We continued to have a sustained focus in ~~2024~~2025 on the “90/10 Rule”, which is described under “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – ~~Financial~~The ~~Responsibility~~90/10 Rule” below. While each of our institutions was in compliance with the 90/10 Rule for ~~2024~~2025, APUS’s relevant percentage for ~~2024~~2025 was 89%. Compliance with the 90/10 Rule will continue to be an area of focus, and despite our efforts, there can be no assurance that we will continue to be able to comply in future years, particularly at APUS. See the Risk Factors captioned “If one or more of our institutions does not comply with the 90/10 Rule for two consecutive years, it or they will lose eligibility to participate in federal student financial aid programs”, ~~and~~ “Our student registrations, revenue, and cash flow have been adversely impacted and we could experience additional adverse impacts as a result of the Armed Forces’ TA processing system upgrades or a transition to new systems for ~~soldiers~~service members to request TA or accessing VA education benefit programs”, and “There can be no guarantee that our business will generate sufficient cash flow from operations or that future capital or borrowings will be available to us in an amount sufficient to enable us to fund our other liquidity needs”, for more information.

Tuition Increases

Providing affordable degree and certificate programs is an important element of our competitive strategy. In August 2025, RU implemented a modest tuition increase for new and reentering students, and in October 2025 implemented modest increases for current students in non-prelicensure nursing programs. In January 2026, RU implemented a modest tuition increase for prelicensure nursing program students. HCN implemented a 5% increase in tuition and fees effective in October 2025 for its ADN and PN programs. The tuition and fee increases at RU and HCN are intended to reflect adjustments to be consistent with the local campus markets. Even with these increases, RU and HCN’s tuition and fees are designed to be affordable and competitive when compared to the tuition and fees at similar institutions offering the same level of flexibility, accessibility, and student experience.

In February 2026, APUS implemented a modest tuition increase for non-military undergraduate and graduate students. We believe that APUS’s tuition and fees remain lower than the average in-state cost at public universities.

Campus Consolidations and Closures

In May 2024, RU ~~combined~~notified ~~two~~the ~~Florida~~Wisconsin ~~campuses~~Educational ~~and~~Approval ~~two~~Program, ~~Minnesota~~or ~~campuses~~EAP, ~~each~~that ~~consolidation~~it ~~resulting~~intended into avoluntarily ~~single~~close ~~expanded~~its ~~campus~~two inWisconsin ~~the respective state~~campuses, ~~with~~effective ~~the~~December ~~intention~~31, to2025, ~~improve~~and ~~the~~2026, ~~student experience~~respectively. ~~In May 2024,~~ RU ~~notified~~closed the ~~Wisconsin~~Green ~~Educational~~Bay ~~Approval~~campus ~~Program,~~effective orDecember ~~EAP~~31, ~~that~~2025 itas planned, and intends to ~~voluntarily~~ close ~~its~~the ~~two~~Wausau ~~Wisconsin~~campus ~~campuses,~~on ~~effective~~ December 31, ~~2025, and~~ 2026~~, respectively~~. All students enrolled at the two Wisconsin campuses have expected graduation dates on or before the applicable campus closing date. For additional information, see the Risk Factor captioned “RU’s actual and planned closure of campuses or termination of programs on certain campuses may adversely impact RU and us”.”

Preferred Stock Redemption

On June 23, 2025, APEI redeemed all 400 outstanding shares of Series A Senior Preferred Stock for $43.1 million, excluding unpaid and accrued dividends of $1.4 million. Accordingly, there are no shares of preferred stock issued or outstanding at December 31, 2025. For additional details regarding the redemption of the Series A Senior Preferred Stock, please refer to “Note 12. Preferred Stock” included in our Consolidated Financial Statements.

Assets Held for Sale

In the first and second quarters of 2025, APUS completed the sale of an undeveloped parcel of land and two buildings located in Charles Town, West Virginia, for net sales proceeds of approximately $23.0 million. Please refer to “Note 5. Assets Held For Sale” included in our Consolidated Financial Statements for more information.

Sale of Graduate School USA

On July 25, 2025, or the GSUSA Sale Date, APEI completed the sale of its membership interest in Graduate School USA, or GSUSA, for $0.5 million, subject to customary adjustments, and as a result, the lease liability was removed from our balance sheet. We have no continuing involvement in GSUSA. The sale of APEI’s membership interest in GSUSA is not considered significant shift in our strategic focus, nor is it considered material to our operations, cash flows, or financial position. Please refer to “Note 2. Significant Accounting Policies” included in our Consolidated Financial Statements for more information on APEI’s sale of its membership interest in GSUSA.

Executive Leadership Changes

~~During~~On ~~2024~~August 4, we2025, ~~entered~~the ~~into~~Board aof ~~Transition~~Directors ~~and~~of ~~Release~~APEI, ~~Agreement~~or ~~with~~the ~~our~~Board, ~~Chief~~appointed ~~Financial~~James ~~Officer~~Kenigsberg ~~and~~as ~~began~~Interim anChief ~~orderly~~Innovation ~~search~~and toTechnology ~~fill~~Officer ~~this~~of ~~position. In addition~~APEI, weand ~~recently~~Mr. ~~announced~~Kenigsberg aresigned ~~new~~from ~~president~~service ~~for~~on ~~RU and~~ the ~~transition~~Board ofin ~~the~~connection ~~current~~with RUand ~~president~~effective toas ~~service on the RU Board~~ of ~~Directors~~his appointment.

Effective October 20, 2025, we appointed Edward H. Codispoti as Chief Financial Officer. Our former Chief Financial Officer, Richard W. Sunderland, Jr., continued to serve the Company until his departure in the first quarter of 2026.

Please refer to “Our Institutions and Our Operations – Information About our Executive Officers” below for additional information about our executive officers serving as of the date of this Annual Report.

~~Information~~Reductions ~~Technology~~in Force

InOn ~~April~~November ~~2024~~3, 2025, as ~~part~~a result of ~~our~~the ~~technology~~government ~~transformation program~~shutdown, we ~~transitioned~~completed to a ~~managed~~reduction ~~service~~in ~~provider~~force ~~for~~that ~~certain~~resulted ~~information~~in ~~technology~~the ~~services,~~termination ~~including~~of ~~service~~approximately ~~desk,~~40 ~~student~~non-faculty ~~support~~employees at APUS, ~~end~~representing ~~user~~approximately ~~support,~~6.5% ~~and~~of ~~network~~the ~~management~~APUS ~~and~~non-faculty ~~operations~~workforce. InSeparately, in the ~~third~~fourth quarter of ~~2024~~2025, ~~the~~19 information technology ~~services~~employees ~~previously~~at ~~outsourced~~APEI ~~under~~were ~~the~~terminated ~~Collegis~~in ~~LLC,~~connection orwith ~~Collegis,~~our ongoing efforts to optimize certain information technology ~~contract~~functions. ~~were~~See ~~transitioned~~“Management’s ~~in-house~~Discussion and toAnalysis ~~third-party~~of ~~vendors.~~Financial Condition and Results of Operations – Overview – Reductions in Force”, for more information.

Tuition Increases

Providing affordable degree and certificate programs is an important element of our competitive strategy. In April 2024, APUS implemented a modest tuition increase for master’s level students across all categories, including military, non-military, and veteran students, and in September 2024, APUS returned the military rate for master’s level students to the $250 per credit hour rate in effect prior to the April 2024 tuition increase. We believe that APUS’s tuition and fees remain lower than the average in-state cost at public universities.

RU implemented modest tuition increases for all students for select programs in the first quarter of 2024, for new students for select programs in August 2024, and for returning students for select programs in October 2024. The tuition and fee increases at RU are intended to reflect adjustments to be consistent with the local campus markets and competitive environment. Even with these increases, we believe RU’s tuition and fees are designed to be affordable and competitive when compared to the tuition and fees at similar institutions offering the same level of flexibility, accessibility, and student experience.

Share Repurchase Program

In January 2024, we repurchased 251,146 shares of our common stock under our November 2023 repurchase authorization for an aggregate purchase amount of $2.8 million. Effective February 1, 2024, we ceased purchases under this purchase authorization.

Financial Objectives

In 2025, we strive to build on the momentum created by our actions and achievements in 2024 and continue to execute on our strategic plan. Specifically, we are focused broadly on (i) achieving public market scale by growing the revenue of our enterprise organically and inorganically and (ii) delivering improved enterprise-wide operating margins.

Our Market and Competition

Market Characteristics

The overall U.S. postsecondary education market is large, with ~~approximately~~more than 4,500 institutions of higher learning, diverse in its business models, and fragmented such that no one institution has a significant market share. Most postsecondary institutions, including for-profit postsecondary institutions, regardless of where they are located, how they are organized, or who they serve, face challenges, including:

•demand for relevance and return on investment, as they must prepare students with relevant skills to work in new and rapidly changing industries, respond to technological change, and support employers in efforts to optimize and advance their workforce;

•focus on quality and affordability, including via questions from potential students, lawmakers, the media, and others about the quality and cost of postsecondary education and the impact of poor quality and high costs;

•changes in consumer demands as prospective students look to ~~unbundle their education and~~ pursue credentials outside of degrees;

•a continually changing regulatory environment;

•fluctuations in enrollment~~, as evidenced by industry-wide undergraduate enrollment growth of 2.0% between the fall of 2012 and the fall of 2022 at four-year institutions~~; and

•rapid technological transformation, including through increasing demand for online offerings and the utilization of technology to enhance student learning, and increasing use of artificial intelligence, or AI, technologies.

Competition

In addition to the characteristics outlined above, the U.S. postsecondary education market is characterized by intense competition. Competitive factors include, among other things:

•the quality of the academic program and alignment to high growth jobs;

•affordability;

•breadth of degree offerings;

•flexibility in delivery models;

•frequency of course or program starts;

•faculty experience;

•level of support for student success;

•career counseling and placement services;

•reputation;

•effectiveness in attracting college-ready students; and

•compliance track record.

Institutions Serving Military Students

APUS has focused on serving the military community since its founding, and the community continues to be a primary source of APUS students. Approximately 2,~~500~~400 institutions serve military students through participation in Department of Defense, or DoD, tuition assistance, or TA, programs, including APUS. APUS’s primary competitors for military students are other institutions offering online instruction and colleges and universities offering on-campus instruction near military installations.

5We believe that APUS will continue to see competition in the military community from both not-for-profit and for-profit schools, as well as from the Armed Forces themselves, including through distance learning programs. For example, the U.S. Naval Community College, or the USNCC, is a community college supporting naval education for enlisted service members. While a number of schools with which APUS competes are participating partners with the USNCC, APUS is not an eligible partner because of its status as a for-profit institution. As traditional not-for-profit public and private schools continue to advance online capabilities, we believe that they may present competition for APUS.

We believe that APUS will continue to see competition in the military community from both not-for-profit and for-profit schools, as well as from the Armed Forces themselves, including through distance learning programs. For example, the U.S. Naval Community College, or the USNCC, a community college supporting naval education for enlisted service members, reached initial operating capability in the fall of 2023 and now provides education to approximately 5,000 service members. By fiscal year 2026, it plans to achieve the capability to accommodate more than 10,000 students. While a number of schools with which APUS competes are participating partners with the USNCC, APUS is not an eligible partner because of its status as a for-profit institution. As traditional not-for-profit public and private schools continue to advance online capabilities, we believe that they will continue to present increasing competition for APUS.

Nursing Programs

RU and HCN’s nursing programs are offered as campus-based programs in the geographic areas surrounding their campuses. In ~~the approximately 20 market areas where~~ RU and HCN’s combined 2826 on-ground nursing campuses ~~are located~~, we compete with a mix of community colleges, public and private postsecondary institutions, and other career-focused nursing colleges offering similar pre-licensure nursing programs. Because of the relatively local focus of these pre-licensure programs, our competitive environment is moderately fragmented and affected by various factors specific to the states and particular areas where campuses are located, including local supply and demand for nurses and nursing schools. We are also continuing to focus on growing our post-licensure nursing programs, for which the competitive environment is less fragmented and has larger competitors, including because RN to BSN and other post-licensure degrees are available online as well as in traditional campus-based environments.

Other Public and Postsecondary Institutions

Within the broader postsecondary education market, our institutions compete primarily with not-for-profit, public, and private two-year and four-year colleges, as well as other for-profit schools, particularly those that offer online learning programs. Due to an increase in online postsecondary offerings, we face increased competition as students pursue degree and credential-based postsecondary education from a wider selection of online offerings. For example, we anticipate increased competition from campus-based postsecondary institutions as they continue to increase online degree programs and develop more non-traditional programs.

Most public institutions are aided by substantial government subsidies. Public and private not-for-profit institutions benefit from grants, tax-exemptions, contributions, and other financial resources not widely available to for-profit institutions. Many public competitors also benefit from longstanding name recognition and are able to directly recruit students in a more cost-effective manner, especially in their local markets. Many private institutions are able to make larger investments in marketing, as their cost of tuition is higher than tuition at our institutions.

Non-Traditional Competition

We also face competition, particularly at APUS and for RU’s online programs, from competing schools and others providing non-traditional education programs, often without charge or at low costs, including:

•institutions offering competency-based education, or CBE, programs and single course or course packages aimed at credentialing outcomes rather than degree outcomes;

•corporate training and other companies partnering with universities or the federal government to offer alternative educational paths for students and the federal government workforce, respectively;

•entities providing coding bootcamps or micro-credentials; and

•non-degree granting institutions such as massive online course providers.

We believe that our institutions will continue to face new competition from non-traditional programs.

For more information on competition within the postsecondary education market in which we compete, refer to “Risk Factors – Risks Related to Attracting and Retaining Students”.

Our Opportunities and Strengths

Our Opportunities

Active-Duty Military, Veterans, and their Families

The U.S. military community will continue to be an important market segment for online education. We believe service members will continue to seek respected universities that provide military-focused support services coupled with an online curriculum and flexible scheduling. We believe service members are particularly interested in postsecondary credentials that offer both career advancement within the military and preparation for employment outside of the military.

We believe that military veterans represent another important addressable market for online education. The U.S. ~~Census~~ Bureau of Labor estimates that in ~~2024~~2025 there were approximately 16.71 million veterans aged 18 to ~~34 and 4.7 million veterans aged 35 to~~ 54. We believe that our military heritage, affordability, and online offerings are attractive to veterans. In addition, policies and campaigns to facilitate the hiring of veterans may reduce barriers to non-military jobs and facilitate veteran-owned businesses. As these policies and campaigns reduce barriers to non-military jobs and facilitate veteran-owned businesses, we believe online universities offer valuable educational opportunities for veterans regardless of where they live, work, or learn.

We also believe that family members of both active-duty military and veterans represent an opportunity given our prominence and reputation in the military and veterans communities.

Nursing

The expanding need for healthcare coupled with a nursing shortage continues to drive significant demand for nursing education. Projected employment for licensed practical nurses and registered nurses is expected to grow by approximately 3% and 65% annually, respectively, from ~~2023~~2024 to ~~2033~~2034, according to the U.S. Bureau of Labor Statistics’ Occupational Outlook Handbook. When factoring in the need to replace workers who transfer to different occupations or exit the labor force, such as to retire, the U.S. Bureau of Labor Statistics projects openings each year for ~~registered~~ nurses of ~~approximately~~more ~~194,500,~~than ~~and approximately 54~~200,000 ~~for practical nurses,~~ through ~~2033~~2034, though the amount of demand varies by geography.

There is significant unmet demand from qualified students for nursing educational programs. Despite anticipated job opportunity growth, qualified applicants are not always accepted by nursing programs, primarily due to program selectivity, a shortage of clinical sites, faculty, and resource constraints. However, given the state and regulatory approvals necessary, investment in campuses, specialized programmatic knowledge and related accreditations, clinical placement requirements, time to receive approval to grow enrollments, and various standards that nursing schools must meet, we believe there are challenges for new entrants to nursing education. We also believe we may distinguish ourselves from our competitors by developing direct partnerships with healthcare providers as they become more involved in educating and training their future workforces, of which nurses are the largest segment.

Career Learning

U.S. employers are increasingly reporting significant gaps between required skills and the capabilities of their workforce. Working adults also recognize the need to be lifelong learners. We believe employers and professional associations will continue to seek partnerships with academic institutions to advance the skills and productivity of their workforce through higher education and career learning programs, which we see as an opportunity, particularly for ~~APUS,~~ RU, and ~~GSUSA~~HCN. We also believe that there is an opportunity to expand the APUS brand more broadly to attract students beyond its historical constituency.

Our Competitive Strengths

Return on Educational Investment and Affordability

Our institutions are committed to continually assessing and enhancing our academic programs and student services to offer a high-quality education and facilitate successful outcomes for our students and graduates that align with employer needs. In addition, as described in “Our Institutions and Operations – Human Capital” below, our institutions focus on excellence by hiring experienced faculty and continuing to develop their capabilities.

Providing affordable, quality degree and certificate programs is an important element of our competitive strategy. The combined tuition and fees at APUS are generally less than the average in-state cost at a public university. APUS’s low tuition 11

7In addition, as described in “Our Institutions and Operations – Human Capital” below, our institutions focus on excellence by hiring experienced faculty and continuing to develop their capabilities.

Providing affordable, quality degree and certificate programs is an important element of our competitive strategy. We believe the combined tuition and fees at APUS are generally less than the average in-state cost at a public university. APUS’s low tuition and fees, in combination with APUS-funded tuition grants and book grants provided to all undergraduate students, result in significant savings and mean that APUS students are not required to take on as much debt as they might at another institution. APUS’s generous transfer credit policy, and use of open educational resources, further reduce a student’s out-of-pocket costs.

Tuition and fees at RU and HCN are also designed to be affordable and competitive when compared with those of similar institutions offering the same level of flexibility, accessibility, and student experience. RU students may also lower their total cost of attendance through self-directed assessments, which provide savings by permitting students who demonstrate proficiency in a subject to test out of courses. Similarly, HCN students may apply performance-based grants toward the balance of their tuition. Please refer to “Our Institutions and Operations – Our Institutions – Affordability and Cost of Attendance” below.

We believe that, given broad concerns about rising tuition and student loan debt in higher education, there are opportunities to create awareness and attract college-ready students with the primary message of affordability and value~~, in order to help achieve a Higher Education Return on Investment for our Customers, or HEROICTM~~.

Relevant Offerings Aligned with Demand

Our institutions offer programs aligned to jobs that U.S. Bureau of Labor Statistics data and non-governmental organizations have indicated as high growth areas. Our institutions are also committed to continually assessing and enhancing our academic programs and student services to offer a high-quality education and facilitate successful outcomes for our students and graduates that align with employer needs. The depth and breadth of APUS’s and RU’s non-nursing program offerings are designed to effectively address the needs of students who enter into education programs with vastly different educational and career backgrounds and goals. For example, APUS utilizes Industry Advisory Councils to evaluate its current curriculum and determine the career relevance of programs and degrees, which facilitate efforts to connect APUS’s curriculum to the industries and the students it serves and to deliver a high-quality academic product. RU and HCN, meanwhile, create new nurses to meet the significant imbalance of supply and demand that exists for nurses by preparing and training nursing students to enter the nursing profession as licensed nurses.

Flexible Program Offerings

Our institutions offer flexible learning modalities to meet the needs of busy working adults. APUS offers online delivery with monthly starts and academic support offerings that are individualized to students’ needs, while RU offers a blend of ~~online and~~ in person and online courses for their nursing and other healthcare-related programs, and flexible start dates and online courses for other programs. HCN offers PN and ADN programs that accommodate working adults by offering on-campus instruction, online instruction for certain courses, as well as daytime and evening/weekend options. ~~GSUSA~~at ~~offers~~its ~~virtual~~Ohio ~~and in-person instructor-led, blended, and on demand online courses to accommodate the need for immediate application-specific training~~campuses.

Market Leadership

Our status as a market leader in key areas we serve means that we operate from a position of strength in those areas. APUS is the number one educator of active-duty military and of veterans. Since its founding, APUS has broadened its focus to include veterans, extended military families, and other public service and service-minded communities, with a focus on a broad purpose of “educating those who serve.” As of December 31, ~~2024~~2025, approximately 6562% of APUS’s students self-reported that they served in the military on active duty at the time of initial enrollment, and approximately 1215% of APUS’s students self-reported that they are a military veteran. We are also a national leader in pre-licensure nursing education. RU and HCN have more than 910,200 nursing students at their 2826 campuses across ~~nine~~eight states and online with over 90% of those students pursuing a pre-licensure PN ~~degree~~diploma, ADN ~~degree~~, or post-licensure BSN degree. Finally, we are one of the largest providers of training to the federal and public employee workforces through GSUSA with its extensive portfolio of government agency customers and directly enrolled federal government employees.

Expansive Nursing Footprint

Our institutions train nurses at 2826 campuses across ~~nine~~eight states and online. Given the state and regulatory approvals necessary, the investment in physical campus facilities, the specialized programmatic knowledge and related accreditations, clinical placement requirements, the time to receive approval to grow nursing enrollments and various standards that nursing schools must meet, we believe nursing education – and in particular first or pre-licensure nursing education – provides us with ~~opportunities to distinguish ourselves from our competitors. In addition, we believe we are one of the only educators with a full “ladder” of nursing curriculum from PN to Doctoral degrees.~~

opportunities to distinguish ourselves from our competitors. In addition, we believe we are one of the only educators with a full “ladder” of nursing curriculum from PN diplomas to Doctoral degrees.

Purpose-Built Student Information System

At APUS, our purpose-built technology platform allows for scale without significant additional cost, and our student information system is purpose-built to serve active-duty military by allowing students that intend to access their TA benefit to seamlessly enroll, register, and gain approval for this benefit.

Our Business Strategy and Goals

Win with Service-Minded Students and their Families

At our core is a recognition of the importance of individuals who serve the country and society at large. We aim to deliver on our vision of education that transforms lives, advances careers, and improves communities by “educating those who serve.” Our institutions are purpose-built to educate the service-minded student by offering programs designed to prepare individuals for contributions to their profession and society and to provide opportunities to advance students in their current professions or help them prepare for their next career.

We seek to offer curriculum in bundles that resonate with service-minded students and their families. We expect to continue to focus on education that provides real skills and pathways to employment and career advancement in fields that align with demand. We aim to deliver differentiated, memorable learner experiences across the entire student journey.

Deliver a Return on Higher Education Investment

We seek to maximize a student’s return on their educational investment. We believe learners are looking for a practical solution that provides value in return for their educational investment and that fits their lifestyle and values. We believe there are opportunities to create awareness and attract college-ready students with the primary message of affordability and value.

Grow a National Nursing Platform

We are focused on expanding nursing opportunities through geographic campus expansion and the expansion of our programs and course offerings. This focus includes expansion of our post-licensure enrollments, particularly at RU where key post-licensure programs have already been established and are primarily delivered online, which represents an opportunity for our alumni and other already-licensed nurses to advance their nursing careers. We also seek to enhance provider partnerships to act as a catalyst for enrollment growth and defray student costs. We intend to continue to seek opportunities for both organic and inorganic growth, including by exploring acquisitions of other nursing schools.

Build a Career Learning Platform

We believe that our institutions provide us with a foundation from which we can build a career learning platform. WeAPUS ~~seek~~partners towith ~~enter~~community ~~into new nursing provider partnerships and expand existing nursing provider partnerships~~colleges, ~~such~~which asprepare ~~those~~students atfor ~~HCN.~~transfer ~~For~~opportunities ~~example, in the fall of 2022, HCN entered into a tuition scholarship program with a national healthcare provider~~ to ~~provide~~APUS ~~scholarships to ADN students at its Toledo, Ohio, campus in exchange~~ for abachelor’s ~~work~~degree ~~commitment~~programs. ~~following~~At ~~graduation,~~RU and, inHCN ~~2023,~~we ~~partnered~~seek ~~with another national healthcare organization~~ to ~~provide~~enter ~~similar~~into ~~scholarships~~new tonursing ~~ADN~~provider ~~students~~partnerships atand ~~its~~expand ~~Columbus,~~existing ~~Ohio,~~nursing ~~campus.~~provider ~~We continue to add new~~ partnerships. ~~with~~Together ~~healthcare~~RU ~~partners~~and at HCN tohave ~~provide~~over ~~scholarships~~400 tocorporate ~~ADN~~alliance ~~and~~partners ~~LPN~~whose ~~students~~employees atcan ~~our~~pursue ~~Ohio~~an ~~campuses.~~education ~~During~~at ~~the~~RU ~~fourth~~or ~~quarter of 2024, we began exploring similar opportunities for RU~~HCN. Additionally, among our institutions’ offerings are certificate and credentialing programs.

~~Transform the Company to~~ Achieve Sustainable Growth

We aim to increase our public market scale by growing the revenue of our enterprise organically and inorganically and delivering improved enterprise-wide operating margins. We ~~intend~~will continue to develop capabilities to drive organic growth and plan to continue to assess and pursue strategic acquisitions and integrate and grow them for inorganic growth. ~~Our strategy is organized around areas where we believe we have “the right to win.”~~ For example, we will continue to focus on being the top educator for active-duty military and veterans and ~~pre-licensure~~one ~~nurses.~~of Wethe ~~also~~top ~~aim~~educators tofor ~~deliver improved enterprise~~pre-~~wide~~licensure operating margins by continuing to exercise financial discipline and taking steps such as our efforts focused on realigning our operating model, including the Combination, eliminating redundancies, and optimizing certain functionsnurses.

Focus on Regulatory Metrics

We strive to deliver a quality, competitive education, which goes hand-in-hand with demonstrating compliance with various regulatory standards and metrics. We expect to continue to focus on the core elements of our business that are necessary to meet these standards and metrics. For example, in our nursing programs, we continue to be focused on improving various achievement metrics, particularly around NCLEX pass rates and retention statistics, and at APUS, we continue to focus on making sure we comply with the 90/10 Rule.

to meet these standards and metrics. For example, in our nursing programs, we continue to focus on improving various achievement metrics, particularly around NCLEX pass rates and retention statistics, and at APUS, we continue to focus on ensuring that we comply with the 90/10 Rule.

Optimize Our Cost Structure Through the Shared Services Model

We aim to deliver better, faster, more cost effective, responsible, scalable results for our institutions by providing shared services to them, as noted in “Our Institutions and Operations” below. We believe that the shared services model promotes the efficient use of resources. With the expected completion of the Combination and the creation of APU Global and RU Health+, we expect there to be revenue synergies and cost synergy opportunities through the elimination of redundancies and optimizing operations.

OUR INSTITUTIONS AND OPERATIONS

We provide postsecondary education through three educational institutions of higher learning: APUS, RU, and HCN. ~~We also provide career learning to the federal government workforce through GSUSA.~~ Each institution is primarily responsible for its own academic mission, while APEI performs certain business functions on a shared basis for the benefit of APUS, RU, ~~HCN,~~ and ~~GSUSA~~HCN, with the capability to further expand these shared services to these entities. We believe that the shared services model promotes the efficient use of resources.

Our Institutions

Programs and Areas of Study

We offer a total of ~~182~~181 degree programs, ~~136~~110 certificate programs, and ~~five~~four diploma programs, through our institutions. We offer programs across a broad range of fields of study, including public service-focused fields such as nursing, national security, military studies, intelligence, and homeland security, as well as traditional academic fields such as business, health science, information technology, justice studies, education, and liberal arts. ~~In addition, through GSUSA, our offerings also include career learning opportunities in leadership, finance, human resources, and other fields of study critical to the federal government workforce.~~


Programs			Number
APUS Degrees			133
RU Degrees			47
HCN Degree			1
Total Degree Programs			181
Total Certificates			110
Total Diplomas			4
Total Programs, Certificates, and Diplomas			295

Programs			Number
APUS
Doctoral Degrees			2
Master’s Degrees			44
Bachelor’s Degrees			57
Associate Degrees			31
RU
Doctoral Degrees			1
Master’s Degrees			6
Bachelor’s Degrees			19
Associate Degrees			21
HCN
Associate Degrees			1
Total Degree Programs:			182
Certificates
APUS			108
RU			13
GSUSA			15
Total Certificates:			136
Diplomas
RU			3
HCN			2
Total Diplomas:			5
Total Programs, Certificates, and Diplomas			323

General Academics

APUS offers ~~134~~133 degree programs and ~~108~~98 certificate programs across five schools of study. More than 1,700 distinct courses are available in either eight- or sixteen-week formats. Most APUS academic terms begin on the first Monday of each month. APUS’ certificate programs generally require a minimum of 18 credit hours and focus on a particular component of a broader degree program. Among those programs are 13 undergraduate and 1311 graduate NanoCertsTM programs, which are focused programs comprised of three academic courses in a related area of interest that provide skills necessary for career or professional development and result in a micro credential. RU offers over 60 programs across seven schools of study in addition to nursing. RU offers ~~more~~approximately ~~than~~700 ~~745~~ distinct courses in 5.5 or 11-week formats with terms beginning in January, April, July, and October, as well as 5.5 week terms beginning mid- February, mid- May, mid-August, and mid-November of each year.

Nursing

RU offers a comprehensive “ladder” of nursing degrees, including a pre-licensure Diploma in PN, ADN ~~degree~~, and a BSN degree, as well as the post-licensure RN to BSN degree, Master of Science in Nursing degree and Doctorate of ~~Nurse~~Nursing Practice. In addition, RU also offers a post-graduate nursing certificate. HCN offers on-campus instruction leading to a PN diploma or ADN ~~degree and~~, ~~beginning in the fourth quarter of 2024, a Medical Assisting Diploma,~~ as well as a Direct Entry ADN ~~degree~~ option that offers an accelerated graduation pathway for students who meet certain transfer credit, academic, and entrance exam requirements. Portions of these programs are taught online. Academic terms for HCN’s PN and ADN programs begin four times each year, with courses starting in January, April, July, and October. Graduates of RU and HCN’s PN and ADN programs are eligible to seek licensure after passing the applicable NCLEX exams.

1114

~~Government~~terms ~~Training~~for HCN’s PN and ADN programs begin four times each year, with courses starting in January, April, July, and October. Graduates of RU and HCN’s PN and ADN programs are eligible to seek licensure after passing the applicable NCLEX exams.

GSUSA offers professional development and training courses for federal government agencies and the federal government workforce, serving organizations and individuals with programs designed to support organizational missions, career and occupational development, and the personal ambitions of adult learners. GSUSA’s offerings include more than 300 courses across 14 program areas.

Student Body

Overall, our institutions have approximately ~~106~~108,~~700~~600 students enrolled online and at 2826 campuses across ~~nine~~eight states, with enrollment calculated differently depending on the institution. ~~In addition, GSUSA trained over 24,600 individuals in 2024.~~

The student body of APUS consists of approximately 88,~~400~~700 enrolled students, most of whom are employed full-time. Student enrollment is defined as the number of unique active students, including those who take an approved leave of absence, who are currently attending a course or have completed at least one course within the last 12 months. APUS is designed to serve adult learners with tailored offerings to support them in successfully reaching their individual goals. As of December 31, ~~2024~~2025, approximately 6562% of APUS’s students self-reported that they served in the military on active duty at the time of initial enrollment, and approximately 1215% of APUS’s students self-reported that they are a military veteran. The remainder of APUS’s students are other military or military-affiliated professionals (such as reservists or National Guard members), public service professionals (such as law enforcement personnel or other first responders), and other non-military students (such as working adult students and military spouses). Many APUS students have significant prior education and career experiences; 92approximately 88% ~~are~~enroll ~~working~~at ~~adults and the average age of~~ APUS ~~students~~with isprior ~~34.~~educational ~~APUS~~credits, isapproximately ~~designed~~90% toare ~~serve~~working ~~those~~adults, ~~adult~~and ~~learners~~APUS ~~with~~students ~~tailored~~have ~~offerings~~an toaverage ~~support~~age ~~them~~of ~~in successfully reaching their individual goals~~34.

RU provides education to approximately 1415,~~600~~900 enrolled students at 2018 campuses inacross ~~six~~five states. Student enrollment is defined as the number of unique active students, including those who take an approved leave of absence. RU offers programs across a broad range of fields of study, with a focus on healthcare, specifically nursing education. At RU, 8180% of students are over the age of 25 and 7383% are female. As of December 31, ~~2024~~2025, approximately 56,~~500~~200 students are pursuing nursing degrees at RU, over 90% of whom are enrolled in RU’s pre-licensure degree programs.

HCN provides nursing education to approximately 34,~~700~~000 students at eight campuses inacross three states. The average HCN student is approximately 3335 years old and 93% of HCN students are female. As of December 31, ~~2024~~2025, approximately 6567% of HCN students were enrolled in a PN program and 3532% were enrolled in an ADN program.

Accreditation

Our institutions have institutional accreditation, and their programs often have programmatic or specialized accreditation. Institutional accreditation is an important attribute of our institutions. Colleges and universities depend, in part, on accreditation in evaluating transfers of credit and applications to graduate schools. Students and sponsors of tuition reimbursement programs look to accreditation for quality assurance, and employers rely on institutions’ accredited status when evaluating a candidate’s credentials. APUS is institutionally accredited by HLC with a Standard Pathway designation, with the next reaffirmation of accreditation site visit date to take place in ~~2030~~May 2027, which will entail a review of APUS in its post-~~2031~~Combination form. RU has institutional accreditation from HLC with an Open Pathway designation, with the next comprehensive evaluation for reaffirmation of accreditation scheduled for ~~May~~March ~~2026~~2027. HCN is institutionally accredited by ABHES and has been granted continued accreditation through February 2027 for all programs at all campuses. ~~GSUSA~~Upon iscompletion ~~accredited~~of bythe ~~ACCET~~Combination, HCN will no longer maintain its separate accreditation through ABHES.

In addition to institutional accreditation, certain of our programs offered have received specialized accreditation. For example, the Accreditation Council for Business Schools and Programs accredits approximately 15 different business-focused academic programs offered by APUS and accredits APUS’s accounting program under a specialized accounting accreditation. The Commission on Collegiate Nursing Education accredits the Bachelor and Master of Science in Nursing programs at APUS and RU. Certain programs offered by RU have received specialized accreditation as well. For example, RU’s PN and ADN programs are accredited by the Accrediting Commission for Education in Nursing. HCN’s PN program is accredited by NLN CNEA.

RU and HCN’s locations and programs are approved by state agencies as well. For example, the nursing education programs offered by RU and HCN are approved by the relevant state boards of nursing.

For more information on accreditation and licensure, please refer to “Regulatory Environment – Accreditation” and “Regulatory Environment – State Authorization/Licensure” in this Annual Report.

Admissions and Admissions Standards

We work to attract students who are more likely to persist and succeed in our programs and continue to work to identify and implement changes and initiatives in an effort to attract and enroll more college-ready students more effectively. We welcome students to apply for admission at any time through online application processes at APUS, RU, and HCN. The current qualification for most undergraduate programs is a high school diploma or General Education Development certificate. Applicants for graduate programs must hold a bachelor’s degree from an accredited U.S. institution or an equivalent foreign institution. Certain programs may have additional admissions standards and restrictions. For example, RU and HCN require prospective nursing students to achieve qualifying entrance exam scores for certain programs.15

We seek to attract students who are more likely to persist and succeed in our programs and continue to work to identify and implement changes and initiatives in an effort to attract and enroll more college-ready students more effectively. We welcome students to apply for admission at any time through online application processes at APUS, RU, and HCN. The current qualification for most undergraduate programs is a high school diploma or General Education Development certificate. Applicants for graduate programs must hold a bachelor’s degree from an accredited U.S. institution or an equivalent foreign institution. Certain programs may have additional admissions standards and restrictions. For example, RU and HCN require prospective nursing students to achieve qualifying entrance exam scores for certain programs.

Affordability and Cost of Attendance

We have long been focused on offering our students affordable programs. Affordable tuition has been a priority of APUS since its founding. APUS tuition remains among the lowest in the four-year for-profit sector. APUS costs are ~~more~~approximately ~~than 25~~22% less than the average in-state full-time undergraduate tuition, fees, and books at four-year public universities, based on the final ~~2023-~~2024-2025 institutional data reported to ED through the Integrated Postsecondary Education Data System. ~~This~~The low tuition and fees, in combination with APUS-funded tuition grants and book grants provided to all undergraduate students, ~~resulted~~results in significant savings to APUS students. Additionally, APUS’s generous transfer credit policy, and use of open educational resources, further reduce a student’s out-of-pocket costs. Tuition and fees at RU and HCN are also designed to be affordable and competitive with those of similar institutions offering the same level of flexibility, accessibility, and student experience.

Tuition and Fees

APUS implemented tuition and fee increases for its non-military and veteran students in the second and third quarters of 2023. In April 2024, APUS implemented an additional modest tuition increase to master’s level students across all categories, including military, non-military, and veteran students, and in September 2024, APUS returned the military rate for master’s level students to the $250 per credit hour rate in effect prior to the April 2024 tuition increase. Following these increases, tuition for undergraduate courses is $350 per credit hour, while tuition for master’s level classes is $455 per credit hour. In general, a bachelor’s degree may be earned for $42,000 in tuition costs at current tuition rates, and APUS master’s degrees may be earned for $16,380 in tuition at current tuition rates. In February 2026, APUS increased undergraduate tuition to $360 per credit hour for undergraduate level courses, and increased tuition to $470 per credit hour for master’s level courses for non-military students. APUS does not charge an admission fee or fees for services such as registration, course drops, or similar events that trigger fees at many other institutions. Because APUS is an exclusively online institution, there are no required resident fees, such as for parking, food service, student union, and recreation. Most students taking graduate courses at APUS are charged a technology fee of $85 per course. When applicable, APUS students are charged certain additional fees, such as graduation, late registration, transcript request, and comprehensive examination fees.

RU’s costs vary among its programs and between part-time and full-time attendance. RU implemented modest tuition increases in the first quarters of 2023 and 2024 for all students for select programs, for new students for select programs in August 2024, and for returning students for select programs in October 2024, to help offset the increased cost of delivering a quality education. RU implemented modest tuition increases for new and reentering students in August 2025 and implemented modest increases for current students in non-prelicensure nursing programs in October 2025. RU implemented a modest tuition increase for prelicensure nursing program students in January 2026. RU’s ADN program typically costs $~~400~~453 per credit hour in addition to course fees. Credit hour costs range from $~~210~~260 per credit hour to $~~449~~453 per credit hour for other undergraduate programs. At the graduate level, RU offers six different master’s programs for $~~218~~290 per credit hour or less. RU charges a $~~195~~200 course technology and resource fee for each course. Students may purchase required textbooks or e-books through RU for a flat fee of $15 for each textbook (traditional or e-book) for each course.

HCN’s costs vary among its programs. In the second quarter of 2023, HCN implemented a 5% increase in tuition and fees across all programs to offset the increased cost of delivering a quality, competitive education. ~~HCN’s~~In PNthe ~~program~~fourth ~~may~~quarter beof ~~completed~~2025, ~~for~~HCN ~~approximately~~implemented ~~$19,600~~a 5% increase in tuition and fees for its ADN and PN programs, intended to reflect adjustments to be consistent with the ~~ADN~~local campus markets. HCN’s PN program may be completed for approximately $2720,~~800~~500 in tuition and fees, ~~and~~ the ~~new~~ADN ~~Medical Assisting~~ program may be completed for approximately $1329,~~000~~200 in tuition and fees, each of which is dependent on the campus location. Fees include the cost of examination review materials, lab fees, and test review fees, among others. Some of these costs are payable to HCN and others are payable to third parties. HCN’s students also incur costs for textbooks, supplies, uniforms, and its technology package. These costs vary by program and are paid for by HCN’s students as the textbooks or supplies are needed. HCN estimates that over the life of its programs, a student’s costs related to textbooks and supplies will be approximately $5,000 for the PN program and $6,000 for the ADN program.

At RU and HCN, tuition increases are adjusted to be consistent with the local campus markets. Even with these increases, RU and HCN’s tuition and fees are designed to be affordable and competitive when compared to the tuition and fees at similar institutions.

Grants and Other Fee Reduction Opportunities

~~Prior to September 2023, to support~~ APUS’s ~~active-duty~~provides ~~military students using TA, APUS provided an APUS-funded tuition grant so that undergraduate and master’s students who are eligible for TA benefits and their spouses and dependents had~~ a ~~net tuition of $250 per credit hour. In September 2023, APUS removed the APUS-funded tuition grant and APUS began providing a~~ Preferred Military Rate of $250 per credit hour for undergraduate and master’s level courses, for all U.S. active-duty ~~service members~~military, National Guard members, Reservists, and military families. Active-duty military students using TA at the undergraduate level are expected to generally have no out-of-pocket expenses. In ~~the second quarter of 2023~~addition, ~~coinciding with the tuition increases described above,~~ APUS ~~added~~also provides a 10% ~~Veteran~~grant ~~Grant~~ for veterans and veteran’s family members, or Veteran Grant, on standard undergraduate ~~and~~tuition ~~master’s level courses. In April 2024~~rates, ~~APUS~~a ~~increased~~15% ~~the~~ Veteran Grant on master’s level courses, ~~to 15%~~ and ~~added~~ a 10% Opportunity Grant for undergraduate and master’s level courses for remaining students. In addition, veterans who qualify for 100% of their Post-9/11 Veterans Educational Assistance Act of 2008, or Post-9/11 GI Bill, benefits are expected to generally have no out-of-pocket expenses either.

Active-duty military undergraduate students and their spouses and dependents enrolled in courses for academic credit at APUS receive textbooks and certain course materials at no additional cost to them through an APUS-funded institutional book-grant program. APUS also utilizes open access and online library materials where appropriate and works with various publishers to reduce the cost of textbooks and course materials for both graduate students who pay for textbooks and course materials and for APUS, which funds the book grant.

At RU, students can lower their total cost of attendance through self-directed assessments, which provide savings by permitting students who demonstrate proficiency in a subject to test out of courses. Self-directed assessments, when available, may be attempted for a prepaid fee, which is generally $149 per attempt.

HCN students may apply performance-based grants toward the balance of their tuition after the application of all other funding sources. HCN also offers an institutional affordability grant to students demonstrating financial need to cover the difference between the total cost of tuition and fees ~~less~~and the amount of all eligible financial aid resources. The grant is designed to limit a student’s monthly payment to $200 through an award of up to $200 per month, or $600 per term after consideration of financial aid, employer tuition reimbursement, and other financial resources.

HCN offers its students extended payment plan options. The extended payment plans are designed to assist students with educational costs including tuition and fees. HCN’s payment plans require ongoing payments while the student is enrolled in a program and extend after the last day of attendance or graduation. To the extent interest is applied, it is generally fixed and does not accrue until the student departs the program or graduates. The extended payment plan options do not impose any origination fees.

Sources of Student Financing and Financial Aid

Our students finance their education through a combination of individual resources, ED’s Title IV programs, private loans, state and federal grants, institutional grants, TA, Department of Veterans Affairs, or VA, educational benefits, and corporate reimbursement programs. Most students rely on some form of financial aid in addition to their individual resources. At APUS, students utilizing DoD’s TA programs as their primary source of payment accounted for 4641% of revenue in ~~2024~~2025, those utilizing VA education benefits 2426%, those utilizing ED’s Title IV programs 1719%, and those utilizing cash and other sources 1314%. At RU, students utilizing ED’s Title IV programs as their primary source of payment accounted for 7678% of revenue in ~~2024~~2025, those utilizing cash and other sources 2220%, and those utilizing VA education benefits 2%. In addition, most HCN students rely on some form of financial aid in addition to their individual resources. We believe that the ability of our students to participate in these programs is essential to the success of APUS, RU, and HCN.

Participation in TA, VA education benefits, and Title IV programs adds to our institutions’ regulatory burden and results in increased regulatory scrutiny, as described more fully below in “Regulatory Environment – Student Financing Sources and Related Regulations/Requirements”. Federal legislative activity and actions by ED, DoD, and VA may adversely impact the ability of our students to obtain tuition financing, which as with any other limitations on tuition financing could have a material adverse effect on enrollments and our financial condition, as described more fully below in “Risk Factors – Risks Related to Our Business”.

Student Retention and Academic Outcomes

14Our institutions are focused on executing initiatives that will more effectively support their students and help improve those students’ educational outcomes. Improved engagement is an important element in our goal of retaining qualified students. For example, APUS and RU improve engagement through, among other things, faculty engagement initiatives and co-curricular initiatives to increase the level of engagement and collaboration in the classroom and strengthen the bond between those institutions and their students. We also carry out initiatives intended to improve the educational outcomes of our students. For example, RU is dedicated to helping students pass the NCLEX exam the first time by identifying student-specific challenge areas, providing customized tutoring resources and faculty training, and creating student support specialist positions to conduct NCLEX review sessions. In January 2025, RU implemented a contract with a third-party to provide nursing program curriculum upgrades and course materials and testing services to nursing students. These services include integrated NCLEX testing simulation and preparation tools throughout the curriculum and curriculum assessments to identify areas where RU can better enable student mastery and success. HCN offers students NCLEX fee vouchers to encourage students to take the NCLEX within a certain period after graduation. HCN continues to provide significant faculty development resources to support improvements to the teaching and learning experience and program outcomes. Additionally, HCN offers quarterly student workshops to help students prepare for taking the NCLEX exam, provides NCLEX-style questions on assessments throughout the program, and analyzes data from the NCLEX results, and other assessment tools, to adjust course requirements and materials.

Our institutions are focused on executing initiatives that will more effectively support their students and help improve those students’ educational outcomes. Improved engagement is an important element in our goal of retaining qualified students. For example, APUS and RU improve engagement through, among other things, faculty engagement initiatives and co-curricular initiatives to increase the level of engagement and collaboration in the classroom and strengthen the bond between those institutions and their students. We also carry out initiatives intended to improve the educational outcomes of our students. For example, RU’s Council for Nursing Excellence is dedicated to helping students pass the NCLEX exam the first time by identifying student-specific challenge areas and providing customized tutoring resources and faculty training. We believe these initiatives contributed to improved NCLEX pass rates, including improvements in the ADN program pass rates at nearly every campus in 2024 compared to early 2023. In July 2024, RU entered into a contract with a third-party to provide nursing program curriculum upgrades and course materials and testing services to nursing students. These services included integrated NCLEX testing simulation and preparation tools throughout the curriculum and curriculum assessments to identify areas where RU can better enable student mastery and success, which were implemented in January 2025.

Career Development

We believe assisting students in advancing their careers in their current profession or securing employment after completion of their programs or courses is an essential part of our mission. Our institutions offer an array of career services, including complementary personalized career advice for students and alumni through direct interaction with career services staff, career events such as in-person and virtual job fairs and on-campus recruiting, and institution-sponsored online job boards. APUS also offers career planning tools, such as an interest assessment to identify career options that fit student interests and guides to careers associated with student majors, and career preparation services, such as mock interview services, resume review services, and social media review services to improve students’ employer-facing online profiles. RU provides a variety of self-service resources, including access to a networking, job posting, a career research website, online resume building and interview preparation tools, webinars, and video tutorials, as well as online programmatic advising by dedicated career services advisors. We strive to link students directly with employers where we can. ~~For~~At ~~example,~~RU ~~during~~and ~~the~~HCN ~~fourth~~we ~~quarter~~seek ofto ~~2022,~~enter ~~HCN entered~~ into anew ~~tuition~~nursing ~~scholarship~~provider ~~program~~partnerships ~~with~~and aexpand ~~national~~existing ~~healthcare~~nursing provider ~~to provide scholarships to ADN students at its Toledo~~partnerships, ~~Ohio~~and ~~campus~~together inRU ~~exchange~~and ~~for a work commitment following graduation. In the fall of 2023,~~ HCN ~~partnered~~have ~~with~~over ~~another~~400 ~~national~~corporate ~~healthcare~~alliance ~~organization to provide similar scholarships to ADN students at its Columbus, Ohio campus~~partners. ~~During the fourth quarter of 2024, we began exploring similar opportunities at RU.~~

Marketing and Branding

We strive to align our marketing efforts with our business and strategy and to tailor our marketing approach to our educational offerings and the students we serve. This approach encompasses all our learning modalities, from online to on-campus to hybrid, and all our educational outcomes, from certification to degree, and leading to the career outcomes students seek after they leave us. As part of these efforts, we continue to highlight certain key marketing and branding messages that align with our strategy, including educating those who serve, affordability and value.

We execute our marketing efforts through both direct-to-student and business-to-business channels. Our marketing relationship with students extends across the entire student journey from recruitment to post-graduation and includes efforts to drive student awareness, improve student onboarding, increase persistence, improve student performance, and focus on career outcomes. We aim to market to students wherever they may be, through their chosen media or marketing channel, and in the geographies where they are located. Our approach includes in-person and relationship-based marketing as well as digital (including search, company-owned and external content, social media, and streaming services), and more traditional media television, radio, and print marketing efforts.

We also work with partners we believe can provide us with better access to students who will persist in our institutions’ programs. ~~Nearly~~Over 25% of our RU enrollments are associated with an alliance or partner relationship. We have agreements with over 300 employers whose employees pursue an education at RU. At APUS, ~~this~~partners ~~includes~~with ~~partnerships~~over ~~with~~120 ~~community~~employers ~~colleges~~and organizations directly. Additionally, ~~which~~we ~~prepare~~collaborate ~~students~~with ~~for~~leading ~~transfer~~tuition ~~opportunities~~assistance administrators and vertical channel partners, extending our indirect reach to ~~APUS~~over ~~for~~1,000 ~~bachelor’s~~organizations ~~degree~~and expanding awareness of our academic programs across diverse industries. AtThe RUAPUS ~~and~~Military ~~HCN~~Outreach team provides ongoing, weprofessional, ~~have~~in-person ~~begun~~services ~~establishing~~to ~~new~~our ~~partnerships~~university’s ~~with~~military ~~healthcare~~students ~~providers~~across tothe ~~further~~United ~~career~~States. ~~outcomes~~This team conducts on-base office hours across the country and ~~defray~~participates ~~costs~~in ofnearly 100 education, asfairs ~~discussed~~each ~~more~~year, ~~fully~~ensuring inconsistent ~~“Our~~visibility ~~Institutions~~and –hands-on ~~Career~~guidance ~~Development”~~for ~~above~~military learners. At RU and HCN, we

Marketing efforts tailored for our institutions consider prospective and current students, including their respective educational goals. To that end, APUS marketing has historically had a relationship-based focus on building long-term relationships with businesses, professional organizations, and individuals in the military, military-affiliated, and public service communities. We also have programs at APUS that aim to assist members of the military as they transition into private sector jobs. RU and HCN nursing program marketing includes leveraging relationships with and marketing to the healthcare 18

15seek to establish new partnerships with healthcare providers to further career outcomes and defray costs of education, as discussed more fully in “Our Institutions – Career Development” above.

In ~~April~~November ~~2024~~2025, ~~APU~~APUS announced its plan to ~~expand~~optimize ~~its~~dedicated ~~reach~~marketing resources to ~~become~~promote abenefits ~~global~~to ~~digital~~extended ~~university~~families, ~~that integrates emerging technology~~ and ~~enhanced~~increase ~~teaching~~its ~~and~~messaging ~~learning~~about ~~opportunities~~Veteran ~~for faculty and students~~Grants. ~~APU~~APUS ~~aims~~plans to ~~provide~~leverage ~~students~~its ~~with~~existing ~~collaborative~~military ~~learning~~outreach ~~experiences,~~team ~~classroom~~and ~~support~~student ~~powered by AI,~~ and ~~personalized~~alumni ~~digital services. Already~~network, ~~students~~as ~~can~~well ~~access~~as ~~personalized~~entering ~~career~~new ~~coaches,~~marketing ~~and 24/7 mental health support~~channels, ~~both~~ in ~~multiple~~order ~~languages;~~to ~~AI-based~~accelerate ~~career~~growth ~~services;~~among veteran and ~~numerous~~extended ~~online~~military ~~practical~~family ~~work~~student ~~experience opportunities~~populations.

RUAPUS ~~historically~~continues ~~outsourced~~to ~~the~~plan ~~vast~~to ~~majority~~expand of its ~~marketing~~reach ~~functions. In October 2022, RU and Collegis mutually agreed~~ to ~~the~~become ~~termination~~a ofglobal ~~the~~digital ~~marketing~~university ~~services~~that ~~contract,~~integrates ~~effective~~emerging ~~January~~technology ~~31, 2023,~~ and ~~completed~~enhanced ~~the~~teaching ~~transition~~and oflearning RUopportunities ~~marketing~~for tofaculty ~~our~~and ~~in-house centralized marketing team~~students. WeAPUS ~~continue~~aims to ~~develop~~provide ~~our~~students ~~marketing team~~ with ~~subject~~collaborative ~~matter~~learning ~~expertise~~experiences, ~~and~~classroom ~~optimize~~support ~~our~~powered ~~initiatives~~by ~~utilizing~~AI, ~~marketing~~and ~~technology~~personalized ~~and~~digital ~~analytics~~services. ~~This~~Already, instudents ~~turn~~can ~~allows~~access uspersonalized tocareer ~~improve~~coaches, ~~our~~and ~~marketing~~24/~~media~~7 ~~mix,~~mental ~~audience~~health ~~targeting~~support, ~~creative~~both ~~messaging~~in ~~and~~multiple ~~user~~languages; ~~experience~~AI-based ~~for~~career ~~all~~services; ofand ~~our~~numerous ~~educational~~online ~~institutions~~practical work experience opportunities.

All of our institutions’ marketing is performed in-house by our centralized marketing team through a shared services model. We continue to enhance our marketing team with subject matter expertise and optimize our initiatives utilizing marketing technology, data, and analytics. This in turn allows us to improve our marketing/media mix, audience targeting, creative messaging and user experience for all of our educational institutions.

Information Technology

Information technology systems are ~~essential~~critical to our student experience and ~~our~~to ~~business~~the operations of our institutions. APEI provides information technology services to ~~our~~its institutions through a shared services model. ~~Prior~~that tosupports ~~September~~centralized ~~2024,~~governance RUwhile ~~outsourced~~enabling ainstitution-specific variety of information technology functions under a service agreement with Collegis, including its data center, support and maintenance of its learning management, student information, and customer relationship management systems, student support, end user support, voice services, and network management and operations, and its technology infrastructure was hosted, managed, and supported by Collegisrequirements.

Prior to September 2024, RU had outsourced a broad set of technology services under an agreement with Collegis LLC, including hosting and operation of learning management, student information, and customer relationship management systems, student and end-user support, voice services, network operations, and related infrastructure services.

Our Ongoing Technology Transformation

We are inexecuting ~~the midst of~~ a multi-year enterprise technology transformation ~~program~~intended ~~that~~to wemodernize ~~expect~~our ~~will~~core ~~enable~~platforms, usimprove tostudent ~~enhance the learning~~ experience ~~for students~~, ~~better~~reduce ~~accommodate~~long-term ~~new~~technology ~~flexible learning modalities~~risk, and improve ~~the~~ operational effectiveness. ofThis ~~our~~work ~~enterprise.~~is Inmanaged ~~April~~through ~~2022~~defined, wesequential ~~notified~~stages ~~Collegis that we intended~~ to ~~permit~~ensure ~~RU’s~~a ~~information~~controlled ~~technology~~rollout ~~services~~while ~~contract~~maintaining touninterrupted ~~expire by its terms in September 2024~~operations.

InThroughout ~~December 2023~~2024, we ~~entered~~insourced ~~into~~core anplatform ~~agreement~~ownership, ~~with~~architecture, ~~a managed service provider to outsource a number of our information technology operations~~integration, ~~including~~and ~~some~~institutional ~~that~~support ~~were~~capabilities ~~previously~~while ~~being~~continuing ~~handled~~to byuse ~~Collegis,~~managed ~~including~~ service ~~desk,~~providers ~~student~~for ~~support,~~certain ~~end~~operational ~~user support,~~ and ~~network~~commodity ~~management and operations~~services. InThis ~~April~~operating ~~2024,~~structure ~~this~~is ~~transition~~intended ~~was~~to ~~completed,~~increase ~~and~~internal incontrol ~~the~~over ~~third~~mission-critical ~~quarter~~systems ofand ~~2024,~~reduce wedependency ~~substantially~~risks ~~completed~~while ~~the~~benefitting ~~insourcing~~from ofretaining ~~information technology services and~~ the ~~outsourcing~~scalability of ~~certain~~external ~~of those same services to a managed service provider~~partners.

In 2025, we began implementing an organizational redesign that aligns technology teams and functions into “domains.” Each domain is responsible for a defined set of platforms, business capabilities, and services. This structural model is intended to create clearer accountability for system ownership, reduce fragmentation, streamline decision-making, and ensure that each critical area of student, academic, and enterprise operations has a dedicated technology leadership structure. Domains are supported by centralized centers of excellence in data, cybersecurity, enterprise architecture, and platform engineering to promote consistency and standard practices across portfolios.

Student Information and Instructional Delivery

Our core enterprise systems ~~are~~include (i) ~~our~~ student information ~~and services~~ systems, or SIS, ~~platforms~~ which ~~our institutions use to interact with and provide~~ support ~~to students in areas such as~~ admissions, registration, ~~tuition~~academic ~~payment~~records, ~~grade~~tuition ~~reporting,~~and ~~progress~~financial ~~toward degrees~~transactions, and ~~various~~student ~~other~~services; ~~functions,~~ (ii) ~~our~~ learning management systems, or LMS, ~~platforms,~~ which ~~our institutions use to deliver course content and~~ support ~~teaching,~~instructional ~~learning,~~delivery; and ~~collaboration, and~~ (iii) ~~our~~ customer relationship management ~~systems~~, or CRM, systems, which ~~manage~~support ~~our~~ admissions ~~functions~~and enrollment.

At APUS, weoperates ~~have~~ a legacy customized SIS ~~that~~known ~~we refer to~~ as Partnership at a Distance™, or PAD,. ~~and~~We ~~proprietary~~continue ~~information~~to ~~systems~~evaluate modernization and ~~processes~~long-term platform strategies, including staged transition approaches intended to ~~support~~minimize ~~PAD~~operational disruption while providing more modern architecture and end-user experiences. RU uses Anthology Campus Nexus as its SIS. ~~The~~and RUHCN ~~SIS~~uses ~~environment~~a isseparate ~~currently~~legacy ~~hosted~~SIS ~~with~~platform. ~~Anthology~~In in2026, awe ~~cloud~~will ~~environment.~~be ~~APUS~~moving ~~and~~non-core RUSIS ~~admissions~~data ~~functions~~and ~~are~~workflow ~~managed~~functions ~~inside~~for ofRU ~~Salesforce~~ and ~~connected~~HCN tointo ~~PAD~~Salesforce, ~~for~~which ~~APUS~~already ~~and~~serves ~~Anthology~~as ~~for~~a RUstable tosystem ~~ensure~~of ~~all~~record ~~pertinent~~for ~~information~~student islifecycle ~~synchronized~~data ~~appropriately. HCN~~ and ~~GSUSA~~operational ~~have~~processes ~~their~~for ~~own~~APUS ~~SIS~~and ~~platforms~~RU. InThis ~~2025,~~approach weis ~~plan~~intended to ~~replace~~preserve ~~the~~core ~~existing~~regulatory ~~SIS~~and ~~platform~~academic-record ~~used~~functions bywithin ~~GSUSA~~the ~~and~~SIS ~~will~~while ~~also~~shifting ~~begin~~surrounding ~~moving~~processes ~~HCN~~into to a ~~new~~more ~~SIS~~stable and standardized platform. ~~More~~In ~~broadly~~2026, we ~~continue~~plan to ~~review~~begin ~~and~~migrating ~~assess~~HCN ~~our~~to ~~student~~a ~~information~~new ~~and~~SIS ~~services~~platform ~~platforms~~as ~~and~~part ~~their~~of ~~capabilities,~~our ~~including~~broader ~~whether~~strategy to ~~consolidate~~reduce tofragmentation aand ~~standard~~complexity ~~platform~~ across ~~more~~student orinformation ~~all our institutions~~systems.

~~PAD~~ APUS isand ~~designed~~HCN use Brightspace by D2L as their LMS platform. RU currently uses Blackboard Ultra, hosted by Anthology. In 2026, we plan to ~~enable~~transition ~~APUS~~RU from Blackboard Ultra to ~~provide~~D2L ~~each~~to ~~student~~consolidate ~~with~~our ~~individualized~~LMS environment across our institutions, which we expect will reduce operational complexity and support ata ~~appropriate~~more ~~times~~consistent ~~from~~academic ~~pre-enrollment~~experience. ~~through~~While ~~graduation~~we expect to complete certain of these upgrades in 2026 and ~~beyond~~2027, ~~including~~there ~~student~~can ~~advising,~~be ~~administrative~~no ~~support,~~guarantee ~~and~~that ~~community~~they ~~networking~~will be completed on this timeline. We ~~continually~~regularly evaluate ~~PAD~~opportunities ~~for~~to ~~changes~~modernize and ~~upgrades~~improve the operational effectiveness of our technology systems and ~~anticipate~~platforms, ~~that~~and we ~~will~~anticipate ~~eventually~~additional ~~make~~changes ~~significant~~as ~~changes~~we work to orexecute ~~replace~~on ~~this~~our ~~system~~multi-year enterprise technology transformation.

16In addition to our SIS, LMS, and CRM platforms, we maintain systems that support financial aid processing, institutional finance, human resources, marketing, analytics, and enterprise decision support.

APUS and HCN use a cloud based LMS platform, Brightspace by D2L. RU uses Blackboard Ultra as its LMS platform, in an environment hosted by Blackboard, which is now owned by Anthology. All RU support for Blackboard Ultra is currently provided by APEI’s information technology shared services.

In early 2023, at APUS we launched a new native mobile application to improve the student experience. The APUS mobile application provides current and prospective students with university information and access to academic tools via mobile and tablet, 24/7. Key features include registration, academic dashboard, task manager, program tracker, and real-time notifications. In 2024, we completed the consolidation of APUS’s CRM systems onto a single platform.

In addition to our SIS, LMS, and CRM platforms, we also have several other systems that support the student experience, financial aid processing, fiscal management, human resources processes, marketing, and decision support.

Our Information Technology Infrastructure

~~The~~Our ~~backbone of our information~~ technology infrastructure ~~currently~~ consists of two co-location data centers. ~~Our~~and ~~technology~~a ~~environment~~mix isof ~~managed~~ internally managed and ~~through a~~ third-party managed ~~service provider~~environments. ~~Student~~Redundant ~~access~~network toconnectivity ~~our~~supports ~~systems~~student isand ~~provided~~institutional ~~through~~access ~~redundant~~to ~~data~~all ~~carriers~~systems. We ~~intend~~are continuing to ~~continue~~transition totoward ~~migrate~~a ~~much~~cloud-based operating model through the phased migration of ~~our~~applications, ~~infrastructure~~integration services, and ~~core~~infrastructure ~~applications~~workloads to cloud platforms. We expect to operate a ~~cloud~~hybrid ~~computing~~environment ~~model~~during ~~with~~this ~~the~~transition. ~~goal~~Our ofobjective ~~improving~~is ~~the~~to ~~reliability,~~improve scalability, ~~agility~~reliability, security, and ~~security~~resilience ofwhile ~~our~~reducing ~~core~~reliance on fixed on-premises infrastructure and ~~applications.~~reducing exposure to individual vendor ecosystems.

For additional information regarding risks relating to our information technology systems, see “Risk Factors – Risks Related to Our Technology Infrastructure” generally.

Human Capital

Strategy and Values

Our ability to deliver on our mission, ~~and to continue to transform our enterprise to focus~~ on quality student outcomes, and on sustainable growth is tightly aligned with our human capital strategy. Our performance depends on the talents, experience, and efforts of our ~~staff~~faculty ~~employees~~ and non-faculty staff, and on our ability to foster a culture and practice of high performance, innovation, cooperation, integrity, and respect. We seek to be a destination for high-potential employees and desire to build a bench of future leaders by developing best-in-class human capital capabilities. We also strive to ensure we have optimized the position descriptions and performance expectations of the entire workforce. During ~~2024~~2025, our key human capital efforts focused on ~~continuing~~furthering tothe ~~centralize~~partnership ~~certain~~between ~~components~~our ofcentralized ~~our~~shared services human ~~capital strategy~~resources, ~~including~~or ~~our~~HR, ~~talent~~teams ~~acquisition~~and ~~methodology~~our ~~and~~embedded ~~common~~HR ~~talent~~business ~~management~~partners ~~and~~teams ~~talent~~in ~~review~~our ~~process~~institutions, as well as ~~implementing~~continuing ato ~~centralized~~enhance our learning management and training ~~platform~~platforms. WeThose teams collectively continue to ~~provide centralized responses and~~ support ~~through~~ our HRtalent ~~operations~~acquisition and ~~AskHR~~development ~~team.~~efforts Wefor ~~also~~our ~~continue~~faculty ~~to implement a streamlined~~ and ~~proactive~~non-faculty ~~approach~~staff ~~to employee communication to drive connectivity, engagement, and efficiencies~~roles.

~~As of December 31, 2024, APEI’s employee population comprised the following:~~20

	Faculty Members (Full-Time)	Other Professional Staff (Full-Time)	Total Full-Time Employees	Faculty Members (Part-Time)	Other Professional Staff (Part-Time)	Total
APUS	323	614	937	1,457	6	2,400
RU	248	582	830	1,470	294	2,594
HCN	151	175	326	77	49	452
GSUSA	—	59	59	267	1	327
Corporate	—	341	341	—	3	344
Total	722	1,771	2,493	3,271	353	6,117

As of December 31, 2025, APEI’s employee population comprised the following:

The different backgrounds of our employees are influenced in part by the geography in which our headquarters, administrative facilities, and campuses are located and by the communities we serve, in particular military, military-affiliated, veteran, and nursing communities.


	Faculty Members (Full-Time)	Other Professional Staff (Full-Time)	Total Full-Time Employees	Faculty Members (Part-Time)	Other Professional Staff (Part-Time)	Total
APUS	307	583	890	1,501	6	2,397
RU	248	616	864	1,543	313	2,720
HCN	150	172	322	86	32	440
Corporate	—	284	284	—	—	284
Total	705	1,655	2,360	3,130	351	5,841

The different backgrounds of our employees are influenced in part by the geography in which our headquarters, administrative offices, and campuses are located and by the communities we serve, in particular military, military-affiliated, veteran, and nursing communities.

Talent Development and Retention

We believe the quality of our faculty and non-faculty staff is critical to the student experience and student outcomes and is therefore vital to our institutions’ success. Hiring competition is intense, especially for faculty in specialized areas and for qualified executives. RU and HCN also compete with both nursing schools and traditional employers of healthcare professionals to fill open faculty positions. A nursing faculty shortage continues, in certain markets, adversely affecting our ability to recruit and retain qualified nursing faculty at RU and HCN. We believe that current job market dynamics, including low unemployment, have further increased the challenge of hiring and employee retention. We strive to retain our talent and closely track retention of our faculty and non-faculty staff. In 2024 and 2025, we had full-time faculty and non-faculty staff turnover of approximately 14% and 16%, of which, in 2024 and 2025, 73% and 67% were voluntary and 27% and 33% were involuntary, respectively. Although we continue to take steps to retain our current faculty and non-faculty staff and source and recruit talent, there can be no assurance that our efforts will meet our goals.

17Our strategic initiatives require our personnel to perform at a high level and to adapt and learn new skills and capabilities. New faculty members complete on-boarding, orientation, and training. All faculty have annual development opportunities and requirements. In addition, our institutions regularly review faculty performance. We have implemented a centralized talent and transformation team to focus on improving internal learning and development practices and succession planning to ensure that we cultivate skills needed to deliver high quality student outcomes and help grow our operations. We execute an annual enterprise-wide talent review to ensure a consistent review of talent and construct meaningful development plans for leaders within our organization, as well as enhanced succession planning. While previous talent reviews focused on vice presidents and more senior employees, in 2025 we extended the talent review process to include all employees at director and above. We also continued our centralized, consistent compliance training approach across the organization. We continued to use the learning management and training platform that we implemented in 2024 and remain committed to working to ensure that new hires and employees are fully trained on key compliance matters upon hiring and on an annual basis thereafter. We review all required compliance trainings annually for comprehensiveness. Finally, we offer a comprehensive education benefit program that provides opportunities for our employees to advance their education and careers by taking courses at APUS, RU, and HCN.

ability to recruit and retain qualified nursing faculty at RU and HCN. We believe that current job market dynamics, including low unemployment, have further increased the challenge of hiring and employee retention. We strive to retain our talent and closely track retention among our employees, both faculty and staff. In 2023 and 2024, we had full-time employee turnover of approximately 19% and 14%, respectively, of which 73% was voluntary and 27% was involuntary for both years. Although we continue to take steps to retain our current faculty and source and recruit talent, there can be no assurance that our efforts will be successful.

Our strategic initiatives require our personnel to perform at a high level and to adapt and learn new skills and capabilities. New faculty members complete on-boarding, orientation, and training. All faculty have annual development opportunities and requirements. In addition, our institutions regularly review faculty performance. We have implemented a centralized talent and transformation team to focus on improving internal learning and development practices and succession planning to ensure that we cultivate skills needed to deliver high quality student outcomes and help grow our operations. In 2024, we again executed an enterprise-wide talent review for all vice-president and above employees to ensure a consistent review of talent and more meaningful development plans for those leaders, as well as enhanced succession planning. We also continued our centralized and consistent compliance training approach across the organization. We implemented a new learning management and training platform and remain committed to working to ensure that new hires and employees are fully trained on key compliance issues both at hire and also on an annual basis during the duration of employment. We also review all required compliance trainings annually to ensure the training is comprehensive.

Staffing our Institutions

We believe that hiring and retaining well-educated and qualified faculty and non-faculty staff members is important to our success. In ~~2024~~2025, we ~~continued~~leveraged toour ~~centralize~~fully ~~more~~centralized ~~of our~~ talent acquisition function and team to improve talent search efficiency, increase the consistency of our sourcing practices, and strengthen hiring processes. ~~This~~We ~~centralization~~have ~~has~~seen ~~significantly~~a ~~reduced~~significant reduction in our metrics related to time to fill ~~metrics~~open positions and believe that we have improved our ability to assess talent needs company-wide.

At APUS, approximately 77% of our full-time faculty have a terminal degree in their field of study, and virtually all undergraduate full-time faculty members hold graduate degrees. Many APUS faculty members have relevant experience at other universities and within military, corporate, and government institutions. At RU and HCN, all full-time nursing faculty have earned a BSN or higher. In addition to having the necessary educational requirements, RU and HCN seek faculty members who have demonstrated experience in the field of nursing.

Employee Engagement and Relations

We measure employee engagement, including full-time faculty, on an ongoing basis by soliciting feedback, including aby using an annual, company-wide ~~annual~~ employee engagement survey ~~for~~to ~~all~~gather ~~employees,~~and toassess ~~understand~~our ~~the~~employees’ views ofon ~~our~~various ~~employees~~matters. The results from ~~engagement~~these surveys are used to implement programs and processes designed to enhance employee engagement and improve the employee and faculty experience. In ~~2024~~2025, we ~~implemented~~launched ~~certain~~a ~~enhancements~~condensed ~~around~~version ~~employee~~of ~~service~~our ~~awards~~annual survey to ~~recognize~~gain ~~the~~feedback ~~tenure~~on ~~and~~key ~~commitment~~areas of importance to our ~~employees~~human capital management strategy, and we are implementing action plans to address areas of opportunities identified in those results. None of our employees are ~~parties~~party to a collective bargaining agreement, and management considers employee relations to be good.

Health and Safety

We are committed to the health and well-being of our employees and assess our well-being initiatives and marketplace trends on an ongoing basis. We have increased our focus on employee well-being and have enhanced our Total Rewards Team, which is focused on benefits and well-being. In addition, in 2025 we added a fitness benefit which provides access to online workouts and discounted gym memberships, and no cost mental health resources. We offer paid parental leave to support our ~~employees~~full-time faculty and non-faculty staff and their families and additional paid time off, including time for volunteerism, as additional retention tools. In ~~2024~~2025, we ~~added~~continued anto provide benefits through our employee discount program and ~~developed~~continued ~~communications~~focused ~~and~~efforts ~~guides focusing on total rewards~~ to educate our employees on the company-provided benefits and resources available to them.

Community Impact

We have a variety of engagement and community impact councils at APEI and in our education units. These teams lead our efforts to ensure that we positively impact the communities in which our employees work and live, including by organizing volunteer opportunities. We provide all full-time employees, including faculty, and non-faculty staff, with eight hours of additional paid time off for volunteering and giving back to our communities.

Information About our Executive Officers

Set forth below is certain information concerning our executive officers serving as of the date of this Annual Report.

Name

Age

Position

Angela K. Selden

5960

President and Chief Executive Officer, APEI

Richard W. Sunderland, Jr., CPA

Executive Vice President, Chief Financial Officer, APEI

Edward H. Codispoti

Executive Vice President, Chief Financial Officer, APEI

Craig S. MacGibbon

Executive Vice President, Chief Information Officer, APEI

James Kenigsberg

Interim Chief Innovation and Technology Officer, APEI

Thomas A. Beckett

5758

Senior Vice President, General Counsel and Secretary, APEI

Tanya J. Axenson

4950

Senior Vice President, Chief Human Resources Officer, APEI

Karmela Gaffney

5758

Senior Vice President, and Chief Marketing Officer

Nuno S. Fernandes

4849

President, APUS

Mark L. Arnold

5152

President, RU

Harry T. Wilkins

Chief Executive Officer, HCN

Angela K. Selden joined us in September 2019 as President and Chief Executive Officer and a member of our Board of Directors. Ms. Selden had previously served as Chief Executive Officer of DIGARC, LLC, an education technology provider to higher education institutions, since October 2016. From July 2015 until April 2016, Ms. Selden was Interim Chief Executive Officer of Skybridge Americas, a global contact center and provider of fulfillment solutions, and she served as a member of its board of directors from July 2015 through December 2018. Prior to Skybridge Americas, Ms. Selden served as Chief Executive Officer of Workforce Insight, LLC, a global provider of strategic workforce management, from 2014 to 2015, after Workforce Insight’s acquisition by Baird Capital Partners, where Ms. Selden served as Executive in Residence from 2013 to 2014 and participated in the acquisition of Workforce Insight. Prior to her role at Baird, Ms. Selden served as Chief Executive Officer and Executive Co-Chairman of Arise Virtual Solutions, Inc., a virtual workforce solutions outsourcer from January 2005 until August 2011. Earlier in her career, Ms. Selden spent 18 years at Accenture, including serving as the Managing Partner leading Accenture’s North American West Consumer and Industrial Products group to significant growth.

~~Richard~~Edward WH. ~~Sunderland~~Codispoti, ~~Jr.,~~ CPA joined us in ~~February~~October ~~2011~~2025 as ~~a consultant and became Senior Vice President of Finance of APUS in December 2012. In January 2014, Mr. Sunderland was appointed~~ Executive Vice President and Chief Financial Officer ~~of APEI~~. ~~Prior to joining APUS,~~ Mr. ~~Sunderland~~Codispoti had previously served as the Chief Financial Officer of ~~NovaSom~~NV5 Global, Inc. from ~~2008~~June to2019 ~~2010~~until October 2025. InPrior ~~addition~~to NV5 Global, Mr. ~~Sunderland~~Codispoti ~~served~~was asthe Chief Financial Officer of ~~Active~~Ilumno ~~Day~~Holdings, ~~Inc~~Ltd. ~~between~~from ~~2005~~May ~~and~~2017 ~~2008,~~until ~~and~~June in2019 ~~various roles, including as Controller, Senior Vice President~~ and Chief Financial Officer, of ~~NeighborCare~~JetSmarter, Inc. from ~~1993~~October 2016 to ~~2004~~March 2017. He served in various capacities for TradeStation

Craig S. MacGibbon joined us in August 2022 as Executive Vice President and Chief Information Officer. Prior to joining APEI, Mr. MacGibbon was a partner of Wavestone US (formerly WGroup), the North American arm of Paris-based global management and IT consulting firm Wavestone, from July 2019 to August 2022. Before joining Wavestone US, Mr. MacGibbon was the Chief of Application Development and Support of Synovus Financial Corporation from August 2015 to August 2019, Vice President of Global Shared Services of Las Vegas Sands Corporation from 2014 to 2015, Chief Information Officer of UIL Holdings Corporation (now Avangrid) from 2013 to 2014 and Senior Vice President and Chief Information Officer of Enterprise Solutions of Fifth Third Bank from 2010 to 2013. Mr. MacGibbon has also held leadership roles with Michelin North America, Hubbell Inc., Emerson Electric Co., and Goldwell Cosmetics. Mr. MacGibbon began his career in the US Navy, serving four years as an Avionics technician.22

Group, Inc., including Chief Financial Officer from June 2011 to August 2016, Chief Accounting Officer from February 2010 to June 2011 and Corporate Controller and Vice President of Accounting from September 2007 to May 2011. Mr. Codispoti began his career at Arthur Andersen, LLP.

James Kenigsberg joined us in August 2025 as the Interim Chief Innovation and Technology Officer of APEI and had previously served as a director of APEI from June 2022 until his appointment as Interim Chief Innovation and Technology Officer. Prior to joining APEI, Mr. Kenigsberg was the founding Chief Technology Officer at 2U, Inc., from August 2008 until January 2022. He continued to support 2U’s strategic initiatives as a Senior Strategic Advisor through January 2024. Prior to 2U, Mr. Kenigsberg served as Vice President of Application Development at The Princeton Review from October 2000 to August 2008. He also held senior technology roles at Thomson Reuters and Ogilvy & Mather from January 1998 to October 2000.

Thomas A. Beckett joined us in April 2011 as Director, Legal Affairs for APUS, in January 2012 became Vice President, Legal Affairs, and since January 2016, has served as our Senior Vice President and General Counsel, and Secretary since June 2016. Prior to joining APUS, Mr. Beckett was the General Counsel and Chief Operating Officer of HealthSport, Inc. and its wholly owned subsidiary, InnoZen, Inc. (now CURE Pharmaceutical) from 2007 to 2010. In addition, from 2004 to 2010, Mr. Beckett held various leadership positions at HealthSport and InnoZen. Prior to this, Mr. Beckett was an associate at King & Spalding LLP and Holland & Knight LLP. Mr. Beckett began his career as a banking officer with First Union National Bank. Mr. Beckett is on the board of directors of Shenandoah Telecommunications Company, a wireless telephone and cable services company.

Tanya J. Axenson joined us in July 2022 as Senior Vice President and Chief Human Resources Officer. Prior to joining APEI, Ms. Axenson served as Senior Vice President of HR and Chief Diversity Officer of Erickson Senior Living, which develops, operates, and manages continuing care retirement communities, from January 2021 to July 2022. Previously, Ms. Axenson also served as Vice President and Chief Human Resources Officer of Aerotek, Inc., a leading talent solutions provider, from September 2012 to January 2021. Ms. Axenson also previously held various other human capital and legal roles at Exelon/Constellation Energy, an energy provider, and served as an associate attorney at Gibson, Dunn & Crutcher LLP.

Axenson also served as Vice President and Chief Human Resources Officer of Aerotek, Inc., a leading talent solutions provider, from September 2012 to January 2021. Ms. Axenson also previously held various other human capital and legal roles at Exelon/Constellation Energy, an energy provider, and served as an associate attorney at Gibson, Dunn & Crutcher LLP.

Karmela Gaffney joined us in July 2023 as Acting Chief Marketing Officer before being hired for the role full-time in December 2023. Prior to joining APEI, Ms. Gaffney served as the Chief Marketing Officer of Academic Partnerships from 2020 to 2022 and Senior Vice President of Digital and Integrated Marketing at the same company from 2018 until 2020. Prior to this, Ms. Gaffney was Vice President, eCommerce and Phoenix.edu at University of Phoenix from 2015 to 2018 and was Vice President, Digital Commerce at Choice Hotels International from 2013 to 2015. Ms. Gaffney also previously held various leadership roles at Best Western Hotels & Resorts.

Nuno S. Fernandes joined us in August 2022 as President of APUS. Prior to joining APUS, Mr. Fernandes served at Ilumno, a company that partners with universities in Latin America to expand access to higher education throughout the region, as President and Chief Executive Officer from May 2019 to August 2022, Executive Vice President, Global Operations and Strategic Alliances from April 2018 to May 2019, Executive Vice President, Strategic Alliances from May 2017 to April 2018, Senior Vice President, Global Operations from September 2016 to May 2017, Chief Marketing and Operations Officer from September 2015 to September 2016, Senior Vice President Marketing, Enrollment and Student Services from January 2014 to September 2015, and Senior Vice President Marketing, Enrollment from January 2013 to January 2014. Mr. Fernandes has also held various leadership roles at Overseas Leisure Group and Bosch.

Mark L. Arnold joined us in January 2025 as President of RU. Prior to joining RU, Mr. Arnold served as the Chief Executive Officer of Nystrom & Associates, an outpatient mental health provider, from 2020 to 2023. Prior to this, Mr. Arnold was Chief Operating Officer at Rayus Radiology (formerly, Center for Diagnostic Imaging) from 2017 to 2020 and held other various roles, including Chief Development & Strategy Officer, Senior Vice President & General Manager, Regional Vice President, Minnesota, and Vice President, Strategy and Business Development from 2011 to 2017. Mr. Arnold previously served as a senior healthcare research analyst at Piper Sandler from 2005 to 2011, held leadership roles at 3M Company, and was a healthcare management consultant.

Harry T. Wilkins rejoined us in May 2019 as the Chief Executive Officer of HCN, a position he previously held from December 2013 until his retirement in December 2015. From July 2021 until June 2022, Mr. Wilkins was also the Executive Vice President, Strategy, Growth, and Innovation of APUS. Prior to December 2013, Mr. Wilkins served as our Chief Financial Officer of APEI. Prior to serving as the Chief Financial Officer of APEI, Mr. Wilkins had various executive roles, including serving as the Chief Financial Officer, at Strayer Education, Inc., now Strategic Education, Inc.

Intellectual Property

We and our institutions own, and exercise rights associated with patents, copyrights, trademarks, ~~service~~(registered ~~marks,~~and ~~domain~~common ~~names~~law), ~~agreements,~~ and ~~registrations~~domain names to protect our intellectual property.

Our institutions own or license all course syllabi and course and instructional materials developed by their faculty and ~~employees~~non-faculty staff and, as such, these course materials may be used by our institutions in current and future courses as needed to facilitate instruction and may be modified by our institutions to meet evolving course or curriculum requirements. In general, our institutions do not assert ownership claims to scholarly works of their faculty, such as articles and books, which were not developed as course materials. Such intellectual property of our institutions’ individual faculty members remains the property of each such faculty member and is reserved specifically for use only by the faculty member who owns it unless the faculty member grants permission for use by others.

Our institutions rely on agreements under which they obtain rights to use course content developed by faculty members and other third-party content providers. Our institutions own the copyright for a work by a faculty member where there has been express agreement on such ownership, if the institutions compensated the faculty member for the particular product, or if the institutions funded the research in whole or in part.23

Wefacilitate orinstruction ~~our~~and ~~institutions~~may ~~have~~be ~~secured~~modified orby ~~claim~~our ~~rights~~institutions to ~~trademarks~~meet ~~for~~evolving ~~various~~course ~~names~~or ~~and~~curriculum ~~terms~~requirements. ~~used~~In ingeneral, our ~~and~~institutions ~~their~~do ~~respective~~not ~~businesses,~~assert ~~including~~ownership ~~rights~~claims into ~~“American~~scholarly ~~Public~~works ~~Education,~~of ~~Inc.~~their faculty,” ~~“American~~such ~~Public~~as ~~University System~~articles,” ~~“American~~professional ~~Military University~~presentations,” ~~“American~~and ~~Public University”~~books, ~~“Rasmussen~~which ~~University”,~~were ~~“Graduate~~not ~~School~~developed ~~USA”,~~as ~~and~~course ~~others~~materials. InSuch ~~connection~~intellectual ~~with~~property of our ~~acquisition~~institutions’ ofindividual ~~HCN,~~faculty wemembers ~~received~~remains athe ~~royalty-free,~~property ~~irrevocable,~~of ~~exclusive,~~each ~~transferable,~~such ~~sublicensable~~faculty ~~license~~member toand is reserved specifically for use only by the ~~name~~faculty ~~“Hondros~~member ~~College~~who ofowns ~~Nursing”~~it ~~and~~unless the faculty member grants permission for use by others. Generally, ~~instead~~however, our institutions claim copyright ownership of ~~“Nursing,”~~all ~~any~~course syllabi and other ~~qualifier~~course ~~directly~~and ~~related~~instructional tomaterials ~~nursing,~~developed ~~medicine~~during faculty employment as an employee or contractor of our institutions, or ~~healthcare~~if inour ~~connection~~institutions ~~with~~have compensated the ~~business~~faculty ~~and~~member ~~operations~~for ofthe ~~HCN~~particular product. ~~The~~In ~~trademarks~~addition, ~~and~~our ~~service~~institutions ~~marks~~claim weownership ~~use~~of ~~are~~research ~~central~~grant topublications where our institutions’ ~~brand~~have ~~identities~~funded ~~overall~~the ~~and~~research ~~marketing~~in ~~efforts~~full or in part, ~~including~~as ~~how~~well ~~prospective~~as ~~students~~other ~~identify~~work ~~them.~~products where our institutions have engaged in an agreement with the faculty or non-faculty staff member.

20We or our institutions have secured or claim rights to trademarks for various names and terms used in our and their respective businesses, including rights in “American Public Education, Inc.,” “APEI,” “American Public University System,” “American Military University,” “AMU,” “American Public University,” “APU,” “Rasmussen University,” and others. In connection with our acquisition of HCN, we received a royalty-free, irrevocable, exclusive, transferable, sublicensable license to use the name “Hondros College of Nursing” and, instead of “Nursing,” any other qualifier directly related to nursing, medicine, or healthcare in connection with the business and operations of HCN. The trademarks and service marks we use are central to our institutions’ brand identities overall and associated marketing efforts, including how prospective students identify them.

Our institutions also own rights to internet domain names pertaining to their brand names and other unique descriptors. We and our institutions vigorously defend against infringement of intellectual property rights, including trademarks, ~~service marks~~ and copyrights.

Seasonality and Quarterly Fluctuations

We experience fluctuations in quarterly results and, therefore, the results in any quarter may not represent the results we may achieve in any subsequent quarter or full year. Operating results fluctuate as a result of seasonal or other variations in enrollments. For example, historically, across our institutions, our enrollments are higher in the fall when students traditionally start their education. Our student population also varies as a result of new enrollments, graduations, student attrition, the success of our marketing programs, and other reasons that we cannot always anticipate. We expect quarterly fluctuations to continue.

Available Information About Us

APEI was incorporated in Delaware in 2002 as the successor to a Virginia corporation incorporated in 1991. Our website is www.apei.com. We make available, free of charge through our website, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Information on or available through our website is not incorporated by reference in this Annual Report, and any reference to our website is intended to be an inactive textual reference only.

REGULATORY ENVIRONMENT

We and our institutions are regulated by (i) accrediting agencies, (ii) state regulatory bodies, and (iii) the federal government through ED. APUS, RU, and HCN are approved to participate in tuition assistance, or TA, programs administered by DoD, and veterans education benefits programs administered by the VA and are therefore also subject to oversight by those agencies. Regulations, standards, and policies of these agencies address the vast majority of our operations, including our educational programs, facilities, instructional and administrative staff, administrative procedures, marketing, recruiting, and financial operations and condition. We are also regulated in some cases by other federal agencies including the Consumer Financial Protection Bureau, or CFPB, and Federal Trade Commission, or FTC.

The postsecondary education regulatory environment is complex and continues to evolve. Changes in or new interpretations of law, regulations, standards, and policies could have material consequences for our institutions’ accreditation, authorization to operate in various states, permissible activities, receipt of funds under student financial assistance programs, and cost of doing business. The postsecondary education regulatory environment has also changed and may change in the future as a result of ~~U.S.~~United States federal elections, changes in Presidential administrations and control of Congress, and legislative activity at the state level.

Additional information regarding the regulatory and legislative environment and potential risks associated with it is available below and in the section entitled “Risk Factors” in this Annual Report.

Accreditation

Institutional Accreditation

Accreditation is a voluntary, non-governmental process through which an institution submits to review of its institution or programs based on the standards of the accrediting agency and the stated aims and purposes of the institution or program. Accrediting agencies establish criteria for accreditation, conduct peer-review evaluations, and publicly recognize those institutions or programs that meet the stated criteria and are considered accredited institutions or accredited programs. Accredited institutions and programs are subject to periodic review to assess institutional and program integrity, to encourage continued high performance and improvement, and to confirm that accreditation criteria continue to be satisfied. An institution or program that does not meet the criteria may have its accreditation limited, revoked, or not renewed.

Accreditation at the institutional level by an accrediting agency recognized by ED is necessary to participate in Title IV programs and TA. To be recognized by ED, accrediting agencies must adopt specific standards and procedures. If one of our institutions’ institutional accreditors was to lose its recognition as an accrediting agency and the institution was unable to obtain recognition from another recognized accrediting agency, the institution could lose its eligibility to participate in Title IV programs and TA. The loss of ability of one of our institutions to participate in either Title IV programs or TA could have a material adverse effect on our business and financial condition.

programs and TA. The loss of ability of one of our institutions to participate in either Title IV programs or TA could have a material adverse effect on our business and financial condition.

Additional information about each of our institutions’ accreditation is provided above in “Our Institutions and Operations – Our Institutions – Academics – Accreditation” and as follows:

•APUS is institutionally accredited by HLC with a Standard Pathway designation. All institutions on the Standard Pathway must undergo a mid-cycle comprehensive evaluation, which entails, among other things, HLC conducting a mid-cycle assurance review and site visit. APUS’s mid-cycle comprehensive evaluation had been scheduled for May 2026, but in October 2025, HLC rescheduled the visit to May 2027. The comprehensive evaluation site visit will entail a review of APUS in its post-Combination form. APUS’s next reaffirmation of accreditation is scheduled for 2030-2031.

~~HLC~~•RU ~~conducted~~is ainstitutionally ~~focused~~accredited ~~visit~~by atHLC ~~APUS~~with inan ~~March~~Open ~~2024,~~Pathway ~~after~~designation. ~~raising~~RU’s ~~concerns~~reaffirmation ~~regarding~~of ~~compliance~~accreditation ~~with~~had ~~standards~~been ~~related~~scheduled tofor ~~program~~2025-2026, ~~development~~and ~~oversight~~HLC ~~and~~had ~~program~~scheduled ~~assessment~~the ~~processes~~associated ascomprehensive aevaluation ~~result~~site ofvisit ~~issues~~for ~~with~~May ~~course~~2026, ~~availability~~but in ~~one~~October ~~program. Following the focused visit~~2025, ~~the~~HLC ~~team~~rescheduled ~~found that~~ the ~~concerns~~visit ~~were~~to ~~appropriately~~March ~~addressed,~~2027. ~~and~~As ~~that~~a noresult ~~additional~~of ~~monitoring~~completion ~~was~~of ~~required.~~step ~~Their~~one ~~recommendations~~of ~~were~~the ~~sent~~Combination toin ~~HLC’s~~March ~~Institutional~~2026, ~~Action~~we ~~Council,~~expect orthat ~~IAC,~~the ~~for~~March ~~review~~2027 ~~and~~visit ~~action.~~will Atbe ~~the~~cancelled ~~June~~because ~~2024~~RU ~~meeting,~~will ~~the~~be ~~IAC~~on ~~concurred~~Accredited ~~with~~Change ~~the~~of ~~team’s~~Control ~~findings~~status and ~~affirmed~~typically ~~that~~will ~~APUS~~not ~~addressed~~be ~~all~~required ~~concerns~~to ~~regarding~~undergo ~~compliance~~routine ~~with~~evaluative ~~HLC standards~~processes.

~~APUS~~•HCN ~~has~~is ainstitutionally ~~Standard~~accredited ~~Pathway~~by ~~designation,~~ABHES. ~~having~~In ~~transitioned~~February ~~from~~2021, ~~the~~ABHES ~~Open~~granted ~~Pathway~~HCN incontinued ~~2023~~accreditation ~~because~~through ofFebruary ~~HLC’s~~2027 ~~decision~~for toall ~~conduct~~programs aat ~~focused~~its ~~visit.~~campuses ~~All~~in ~~institutions~~Ohio onand ~~the~~Indiana. ~~Standard~~In ~~Pathway~~July ~~must~~2022, ~~undergo~~ABHES aapproved ~~mid-cycle~~inclusion ~~comprehensive~~of ~~evaluation,~~HCN’s ~~which entails~~Detroit, ~~among~~Michigan ~~other~~campus ~~things,~~into ~~HLC~~its ~~conducting~~grant aof ~~mid-cycle assurance review and site visit~~accreditation. AsUpon acompletion ~~result~~ of the Combination, ~~APUS’s~~HCN ~~assurance review and site visit~~ will ~~now~~no belonger ~~conducted~~maintain ~~in March 2026 which will entail a review of APUS in~~ its ~~post-Combination~~separate ~~form.~~accreditation Asthrough ~~noted below, HLC is scheduled to conduct a site visit in March 2025 in connection with the Combination~~ABHES.

~~•RU~~ABHES isannually ~~institutionally~~reviews ~~accredited~~student byachievement ~~HLC~~indicators, including retention rate, placement rate, and licensing and credentialing examination pass rate. ~~RU’s~~ABHES ~~reaffirmation~~may ofwithdraw accreditation ~~had~~at ~~been~~any ~~scheduled~~time if it determines that an institution fails to demonstrate at least a 70% retention rate for ~~2025-2026~~each program, a 70% placement rate for each program, and a 70% pass rate on mandatory licensing and credentialing examinations or fails to meet the ~~associated~~state-mandated ~~comprehensive~~results ~~evaluation~~for ~~site~~credentialing ~~visit~~or licensure. Alternatively, ABHES may in its discretion provide an opportunity for a program that is ~~scheduled~~not meeting ABHES’ outcomes thresholds to come into compliance within a period of time specified by ABHES, and ABHES may extend the period for ~~May~~achieving ~~2026~~compliance if a program demonstrates improvement over time or for other good cause. ~~RU’s~~In ~~assurance~~the ~~review~~reporting years ended June 30, 2023, June 30, 2024, and ~~site~~June ~~visit~~30, ~~will~~2025, ~~now~~select beHCN ~~conducted~~programs inat ~~March~~certain ~~2026~~HCN ~~which~~campuses ~~will~~failed ~~entail~~to satisfy certain ABHES student achievement measures, and, as a ~~review~~result, ofABHES RUhas inplaced ~~its~~specific ~~post-Combination~~programs ~~form~~at certain campus locations on outcomes reporting status and required action plans. RUHCN has ansubmitted ~~Open~~all ~~Pathway~~the ~~designation~~required outcomes reports and action plans.

~~•HCN~~For isthe ~~institutionally~~reporting ~~accredited~~year byended ~~ABHES~~June 30, 2024, the Cleveland and Dayton, Ohio PN programs and the Akron, Ohio ADN program were below the 70% benchmark for retention. InAs ~~February~~a ~~2021~~result, ABHES ~~granted~~placed ~~HCN~~these ~~continued~~programs ~~accreditation~~on ~~through~~outcomes ~~February~~reporting ~~2027~~status and required HCN to submit reports for ~~all~~each of these programs atdemonstrating ~~all~~their ~~campuses~~retention rate through the first three quarters of the 2024-2025 reporting year by May 2025. These three programs met the 70%

ABHES annually reviews student achievement indicators, including retention rate, placement rate, and licensing and credentialing examination pass rate. Under ABHES policy, ABHES may withdraw accreditation at any time if it determines that an institution fails to demonstrate at least a 70% retention rate for each program, a 70% placement rate for each program, and a 70% pass rate on mandatory licensing and credentialing examinations or fails to meet the state-mandated results for credentialing or licensure. Alternatively, ABHES may in its discretion provide an opportunity for a program that is not meeting ABHES’ outcomes thresholds to come into compliance within a period of time specified by ABHES, and ABHES may extend the period for achieving compliance if a program demonstrates improvement over time or for other good cause. In prior years, select HCN programs at certain HCN campuses have failed to satisfy ABHES’s student achievement measures, and as a result ABHES has placed specific programs at certain campus locations on program-specific warning or outcomes reporting status and required action plans. 25

Asbenchmark afor ~~result~~the ofreporting ~~retention~~period, ~~rates~~and, ~~being~~as ~~below~~a ~~the~~result, ~~70%~~at ~~benchmark~~its ~~for~~July ~~2021-2022~~2025 ~~reporting year~~meeting, ~~which was~~ the ~~second~~ABHES ~~consecutive~~Commission ~~full~~voted ~~reporting~~to ~~year,~~remove ~~ABHES~~retention ~~placed~~reporting ~~the~~requirements. PNHCN ~~programs~~reported atits ~~the~~final ~~Cincinnati,~~retention ~~Cleveland,~~rates ~~Columbus,~~for ~~and~~the ~~Dayton~~reporting ~~campuses~~year onended ~~program-specific~~June ~~warning~~30, ~~status~~2025 in ~~January~~November ~~2023~~2025. ~~Due~~The toAkron ~~the~~and Toledo, PNOhio ADN programs and ~~Akron~~the ~~ADN~~Dayton, ~~program~~Ohio ~~retention~~MA ~~rates~~program ~~falling~~were below the 70% benchmark for ~~2021-2022~~retention. ~~reporting~~As ~~year~~a result, ~~which~~ABHES ~~was~~placed ~~the~~Akron ~~first~~and ~~full reporting year~~Toledo, ~~ABHES~~Ohio ~~imposed~~ADN ~~additional~~programs ~~reporting~~and ~~requirements~~the ~~for~~Dayton, ~~these~~Ohio ~~programs.~~MA Asprogram aon ~~result~~outcomes ofreporting ~~failing~~status tofor ~~meet~~those ~~the threshold benchmark~~programs, ~~ABHES~~and ~~required~~is requiring HCN to submit reports for each of these programs demonstrating their retention rate through the first three quarters of the ~~2022~~2025-~~2023~~2026 reporting year byin May ~~2023~~2026.

The reports submitted in response to this requirement demonstrated that the PN program at the Cincinnati, Cleveland, Columbus, and Dayton campuses and the ADN program at the Akron campus were above the 70% retention benchmark through the first three quarters of the 2022-2023 reporting year. As a result, the Cincinnati, Cleveland, Columbus, and Dayton PN programs were removed from program-specific warning status, and ABHES informed HCN that no additional reporting was required for the ADN program at the Akron campus. However, HCN reported that the retention rate for the PN program at the Toledo campus was below the 70% benchmark through the first three quarters of the 2022-2023 reporting year. Consequently, the Toledo PN program was placed on outcomes reporting status and required to provide an additional report and action plan in October 2023, which HCN submitted.

For the reporting year ended June 30, 2023, the PN program at the Cleveland, Columbus, Dayton, and Toledo campuses, as well as the ADN program at the Akron and Dayton campuses, were below the 70% benchmark for retention. As a result, ABHES continued the Toledo PN program on outcomes reporting status and required HCN to submit reports for each of these programs demonstrating their retention rate through the first three quarters of the 2023-2024 reporting year by May 2024. In May 2024, HCN submitted the required mid-year retention reports for the programs that fell below the 70% benchmark in the 2022-2023 reporting year (Cleveland PN, Columbus PN, Dayton PN and ADN, Toledo PN, and Akron ADN). These reports demonstrated compliance with the 70% benchmark through the first three quarters of the 2023-2024 reporting year. As a result, the ABHES Commission voted to remove retention reporting requirements for all affected HCN programs at its July 2024 meeting.

For the reporting year ended June 30, 2024, the Cleveland and Dayton PN programs, and the Akron ADN program were below the 70% benchmark for retention. As a result, ABHES placed the Cleveland and Dayton PN programs and Akron ADN program on outcomes reporting status and required HCN to submit reports for each of these programs demonstrating their retention rate through the first three quarters of the 2024-2025 reporting year by May 2025.

At its July 2024 meeting, ABHES voted to affirm its July 2022 grant of accreditation of the Detroit, Michigan campus following a team visit to the campus from February 29, 2024, to March 1, 2024.

For more information on the risks associated with these rates, refer to the risk factor in “Risk Factors – Risks Related to the Regulation of Our Industry” with the caption beginning “A failure of HCN to satisfy ABHES accreditation standards...”.

•GSUSA is institutionally accredited by ACCET through December 15, 2027. GSUSA does not participate in the Title IV, TA, or VA education benefits programs.

Institutional accreditation is an important attribute of our institutions. Colleges and universities depend, in part, on accreditation in evaluating transfers of credit and applications to graduate schools. Many institutions will only accept transfer credit from institutions with certain institutional accreditation. Students and sponsors of tuition reimbursement programs look to accreditation for quality assurance, and employers rely on institutions’ accredited status when evaluating a candidate’s credentials. Failure to maintain our institutional accreditations would result in the loss of eligibility to participate in Title IV programs and TA.

The Planned Combination of APUS, RU, and HCN

On January 28, 2025, we announced the ~~Combination,~~planned ascombination ~~discussed in more detail above under “2024 Developments and Future Financial Objectives – The Planned Combination~~ of APUS, RU, and HCN”, or the Combination, which will result in a combined institution named American Public University System comprised of two divisions ~~tentatively~~ named (i) ~~APUS~~APU Global, comprised of AMU and APU, and (ii) ~~Rasmussen~~RU Health+, comprised of RU’s campus-based and online nursing programs, RU’s healthcare programs, HCN’s campus-based nursing and healthcare programs, and RU’s non-healthcare programs~~, with final division names to be determined closer to closing of the Combination~~. ~~We anticipate completing the Combination in the third quarter of 2025 subject to obtaining required approvals and ED taking related actions.~~ The Combination constitutes a Change of Control, Structure or Organization pursuant to HLC policy and, accordingly, we ~~must~~were ~~receive~~required to obtain HLC approval prior to effectuating the Combination. In December 2024, APUS and RU ~~have~~ jointly submitted an application for Change of Control, Structure or Organization to HLC. For HLC purposes, APUS will be the surviving institution, and the application ~~seeks~~sought approval for the Combination and the expansion of APUS’s HLC accreditation to include the RU and HCN programs and locations. HLC ~~will~~conducted ~~conduct~~ a site visit in March 2025 related to the joint application. At its June 2025 meeting, HLC approved the Combination and iscontinuation ~~expected~~of accreditation upon implementation of the related transactions. Subsequently, ED informed us that we would need to ~~complete~~follow ~~its~~a ~~review~~different process to implement the Combination that entails two steps instead of one: (i) merger of the legal entities that own and operate APUS, RU, and HCN, with the APUS entity surviving following the merger, and (ii) combination of the institutions into one HLC-accredited institution. ED does not treat the combination of institutions with the same parent as a change in ownership and control for Title IV purposes. Therefore, the first step requires only that RU and HCN provide notice to ED that the merger occurred, and the second step requires APUS, as the surviving institution, to seek and obtain approval from ED to expand its Title IV certification to cover RU and HCN programs and locations. As a result of this process change, HLC required APUS and RU to submit a new joint application for Change of Control, Structure or Organization to HLC in ~~June~~September 2025 containing substantially the same information that had been submitted previously and reflecting the two-step process. In February 2026, HLC approved the continuation of accreditation of APUS and RU after the legal entity merger with an acknowledgment that the intent is to eventually consolidate the three institutions into one HLC accreditation. ABHES has also informed HCN that it will continue HCN’s ABHES accreditation after the legal entity merger. On March 2, 2026, we completed the merger of the legal entities that own and operate APUS, RU, and HCN with the APUS entity surviving following the merger, and subsequently notified ED that the merger occurred and resulted in RU and HCN being directly owned by the same legal entity that directly owns APUS. We currently expect implementation of step two of the Combination to be complete by the beginning of the third quarter of 2026, subject to obtaining required approvals. HLC will conduct at least one site visit after the Combination as required by HLC’s Change of Control, Structure or Organization Procedure.

ED has conveyed that it does not treat the combination of institutions with the same parent as a change in ownership and control for the purposes of Title IV. As such, we do not expect the proposed transaction to trigger ED’s change in ownership and control requirements. Rather, we expect ED will require APUS, as the surviving institution, to seek and obtain approval to expand its Title IV certification to cover the RU and HCN programs and locations. In order for ED to expand APUS’s Title IV certification, we ~~will~~must ~~be required to~~ submit evidence that APUS’s HLC accreditation has been expanded to include the RU and HCN programs and locations, and that APUS is approved to operate in the states where RU and HCN have campuses. Accordingly, in addition to the HLC approval process described above, APUS will need to obtain required approvals from state agencies, including state boards of nursing, in order to operate in the states where ~~HCN~~RU and RUHCN currently operate. WeSee ~~anticipate completing~~ the ~~Combination~~Risk inFactor ~~the~~captioned ~~third~~“The ~~quarter~~planned combination of ~~2025~~APUS, ~~subject~~RU, toand ~~obtaining~~HCN ~~required~~may ~~approvals~~not ~~and~~be EDcompleted, ~~taking~~or ~~related~~may ~~actions.~~not ~~See~~be ~~the~~completed ~~Risk~~on ~~Factor~~the ~~captioned~~terms ~~“The~~currently ~~planned~~contemplated, ~~combination~~and ofif ~~APUS,~~it RUis, ~~and~~the ~~HCN~~expected benefits may not be ~~completed~~realized, orany of which could have a material adverse impact on our business, financial condition, and results of operations” for more information.

2326

may not be completed on the terms currently contemplated, and if it is, the expected benefits may not be realized, both of which would have a material adverse impact on our business, financial condition, and results of operations” for more information.

Programmatic Accreditation and Professional Recognition

In addition to institutional accreditation, our institutions have obtained programmatic accreditation or professional recognition for certain programs, as described more fully above in “Our Institutions and Operations – Our Institutions – Academics – Accreditation”. Among other standards and requirements, programmatic accreditors may utilize benchmarks for student outcomes in the programs they accredit and may require the institution to address outcomes that fail to satisfy those benchmarks or may take other action based on such matters. If our institutions fail to satisfy the standards of these programmatic accrediting agencies or professional organizations for the relevant programs, they could be subject to restrictions or could lose the programmatic accreditation or professional recognition for those programs, which could result in materially reduced student enrollments, prevent the institution from offering the programs in certain states where programmatic accreditation is required, or prevent our students from seeking and obtaining licensure or employment.

The Accreditation Commission for Education in Nursing, or ACEN, accredits certain RU PN and ADN programs at certain RU locations. RU’s Illinois ADN program was in candidacy status for initial accreditation with ACEN since July 2020, but following a February 2024 site visit, ACEN granted initial accreditation to the Illinois ADN program at its September 2024 Board of Commissioners meeting, which is retroactive to July 2020. ACEN’s next site visit is scheduled for Spring 2029.

RU’s Bloomington, Minnesota ADN program had been subject to adverse action and heightened scrutiny from regulators as a result of continued failure to meet applicable accreditor and regulatory requirements. As more fully discussed in the Risk Factor with the caption beginning “RU’s actual and planned closure of campuses …” in December 2023, RU informed the Minnesota Board of Nursing, or MBN, that it intended to voluntarily close the program, which it did effective June 15, 2024.

In September 2022, ACEN granted RU’s ADN and PN programs in Moorhead, Minnesota and RU’s ADN program in Overland Park, Kansas continued accreditation with conditions, in each case because the program experienced first-time NCLEX pass rates below ACEN’s required threshold. For the two Moorhead, Minnesota programs, ACEN also identified evidence of noncompliance with respect to analysis and use of assessment data in program decision-making. The ADN programs were given two years, and the PN program 18 months, from the date the conditions were imposed, to demonstrate compliance with all criteria related to the standard for which the programs were found to be in noncompliance. Although ACEN does not necessarily have to take action on any particular timetable, if compliance is not achieved by the end of the articulated monitoring period, ACEN may deny continuing accreditation absent good cause. In February 2024, RU’s Moorhead, Minnesota PN program submitted to ACEN a follow-up report and an application for continuing accreditation for good cause. In April 2024, after review of the follow-up report, ACEN removed the conditions for RU’s Moorhead, Minnesota PN program, granting continuing accreditation with the next evaluation in Spring 2030. In July 2024, RU’s Moorhead, Minnesota ADN program and the Overland Park, Kansas ADN program submitted to ACEN their follow-up reports and applications for continuing accreditation for good cause. In September 2024, after review of the follow-up reports, ACEN removed the conditions for RU’s Moorhead, Minnesota ADN program and Overland Park, Kansas ADN program, granting continuing accreditation with the next evaluation in Spring 2030.

State Authorization/Licensure

Our institutions are subject to regulation by the states in which they operate. The level of oversight varies from state to state, and such regulations change frequently. State laws typically establish standards for instruction, faculty qualifications, administrative procedures, marketing, recruiting, financial operations, and other operational matters. Some states prescribe regulations related to an institution’s financial condition, and some states require the posting of surety bonds. State laws and regulations may affect our institutions’ ability to offer educational programs, open locations, and award degrees. If one of our institutions fails to comply with a state’s requirements, it may lose its state licensure or authorization, which would result in the institution’s inability to enroll students in that state and could result in the institution’s inability to receive Title IV program funds and TA funds, at least for students in that state.

Some states assert authority to regulate an institution if its educational programs are offered to residents of those states, regardless of whether the institution maintains a physical presence in the state. The growth of online education has led and may further lead to new laws and regulations and new interpretations of existing laws and regulations. New laws, regulations, or interpretations, including with respect to whether our institutions’ activities constitute a physical presence or otherwise may require authorization or licensure, could increase our cost of doing business and affect our ability to recruit students in particular states, which could negatively affect enrollments and revenue and have a material adverse effect on our business. Changes in our business activities could lead states that do not currently require our institutions to be authorized to require such authorization. The extent of this increase in regulatory obligations, and the associated costs and significance, are not known at this time. Furthermore, in some states it may take a significant amount of time to meet the applicable regulatory requirements with respect to a new program initiative, or we may not be able to do so at all.

24The State Authorization Reciprocity Agreement, or SARA, is a voluntary agreement among member states (all states except California), districts, and territories that establishes national standards for interstate offering of postsecondary distance education and is intended to make it easier for students to take online courses offered by institutions based in another jurisdiction. SARA requires member jurisdictions to approve institutions in their jurisdiction to participate in SARA based upon institutional accreditation and financial stability, and to resolve student complaints. Applications must be renewed annually. SARA does not cover, or limits its coverage related to, certain activities. As a result, an institution may still be required to obtain state authorization from, for example, state education agencies or boards responsible for professional licensure. For information on our institutions’ status under SARA, please refer to “State Authorization/Licensure of Our Institutions” in this Annual Report.

~~particular~~In ~~states~~January 2025, ~~which~~SARA’s ~~could~~coordinating ~~negatively~~entity, ~~affect~~the ~~enrollments~~National ~~and~~Council ~~revenue~~for State Authorization Reciprocity Agreements, or NC-SARA, initiated its policy modification process, soliciting proposals for changes to SARA policy. Such proposals included, among other things, public disclosure of provisional status and ~~have~~modifications ato ~~material~~the ~~adverse~~process ~~effect~~for onevaluating ~~our~~financial ~~business~~responsibility composite scores. ~~Changes~~In inOctober ~~our~~2025, ~~business~~the ~~activities~~NC-SARA ~~could~~board ~~lead~~of ~~states~~directors ~~that~~approved donine ~~not~~proposals, ~~currently~~which ~~require~~included ~~our~~changes ~~institutions~~related to when an institution may be ~~authorized~~placed toon ~~require~~provisional ~~such~~status, ~~authorization.~~public ~~The~~disclosure ~~extent~~requirements offor ~~this~~institutions ~~increase~~placed inon ~~regulatory~~provisional ~~obligations~~status, and ~~the~~a ~~associated~~state’s ~~costs~~ability ~~and~~to ~~significance~~calculate, ~~are~~or ~~not~~require ~~known~~that atan ~~this~~institution ~~time.~~has ~~Furthermore~~calculated, ina ~~some~~composite ~~states~~score itbased ~~may~~on ~~take~~the ainstitution’s ~~significant~~most ~~amount~~recent ofaudited ~~time~~financial tostatements ~~meet~~if ED’s composite score is outdated. See the ~~applicable~~Risk ~~regulatory~~Factor ~~requirements~~captioned “Our institutions’ failure to comply with ~~respect~~the requirements of SARA or regulations of ED or various states related to state authorization could result in actions that would have a ~~new~~material ~~program~~adverse ~~initiative~~effect on our enrollments, orrevenue, weand ~~may~~results ~~not~~of beoperations” ~~able~~for tomore doinformation. soAPUS, atRU and HCN all participate in SARA.

~~The~~Many ~~State Authorization Reciprocity Agreement, or SARA, is a voluntary agreement among member~~ states ~~(all~~also ~~states~~have ~~except~~specific ~~California),~~requirements ~~districts, and territories~~ that ~~establishes~~an ~~national~~individual ~~standards~~must ~~for~~satisfy ~~interstate~~in ~~offering~~order ~~of postsecondary distance education and is intended~~ to ~~make~~be itlicensed ~~easier~~as ~~for~~a ~~students~~professional ~~to take online courses offered by institutions based~~ in ~~another~~a ~~jurisdiction~~specified field. ~~SARA~~Students’ ~~requires~~success ~~member jurisdictions to approve institutions~~ in ~~their~~obtaining ~~jurisdiction~~licensure totypically ~~participate~~depends inon ~~SARA,~~numerous ~~based upon institutional accreditation and financial stability~~factors, ~~and~~including: to(i) ~~resolve~~individual ~~student~~merits ~~complaints.~~of ~~Applications~~the ~~must~~graduate; be(ii) ~~renewed~~whether ~~annually.~~the ~~SARA does not cover, or limits its coverage related to, certain activities. As a result, an~~ institution ~~may~~and ~~still~~the beprogram ~~required~~were toapproved ~~obtain~~by ~~state~~the ~~authorization from, for example,~~ state ~~education~~in ~~agencies~~which orthe ~~boards~~graduate ~~responsible~~seeks ~~for professional~~ licensure. ~~For~~or ~~information on our institutions’ status under SARA, please refer to “State Authorization/Licensure of Our Institutions” in this Annual Report.~~

In January 2024, SARA’s coordinating entity, the National Council for State Authorization Reciprocity Agreements, or NC-SARA, initiated its policy modification process, soliciting proposals for changes to SARA policy. Such proposals included, among other things, potential denial of an institution’s participation in SARA if it violates any requirement related to state authorization, accreditation, or participation in Title IV programs and potential denial of an institution’s participation, or limiting participation, in SARA as a result of adverse actions against an institution related to its academic quality, its financial stability, or student consumer protection issues. In October 2024, the NC-SARA board of directors approved ten proposals, which included changes related to when an institution may be placed on provisional status and when a state must deny or may exercise its discretion to deny an institution’s participation in SARA, which concluded the policy modification process. See the Risk Factor captioned “Our institutions’ failure to comply with the requirements of SARA or regulations of ED or various states related to state authorization could result in actions that would have a material adverse effect on our enrollments, revenue, and results of operations” for more information.27

Many states also have specific requirements that an individual must satisfy in order to be licensed as a professional in a specified field. Students’ success in obtaining licensure typically depends on numerous factors, including: individual merits of the graduate; whether the institution and the program were approved by ~~the state in which the graduate seeks licensure or by~~ a professional association; (iii) whether the program meets all state requirements for professional licensure; and (iv) the accreditation of the institution and the specific program.

Federal Requirements for State Authorization/Licensure

“Home” State Authorization

ED regulations specify how an institution may demonstrate, as required by ED, that it is authorized to offer postsecondary education programs by the state(s) where it is located, including the state where its main campus is located, which we refer to as its “home” state, and that the home state otherwise satisfies ED requirements. If ED determines that an institution does not have the required home state approval, the institution will be ineligible to participate in Title IV programs. If one of our institutions were to lose its ability to participate in Title IV programs in connection with home state authorization requirements, it would also lose its ability to participate in TA and VA, be unable to operate in the state, grant credentials, and lose institutional accreditation.

State Authorization of Online Education

ED regulations require that an institution that offers postsecondary education through distance education to students located in a state in which the institution is not physically located or in which the institution is otherwise subject to the state’s jurisdiction must meet the state’s requirements to be legally offering postsecondary distance education in that state or must be covered by a state authorization reciprocity agreement, like SARA. ED regulations also now specify the required methodology for determining the state in which a student is located for purposes of satisfying state authorization requirements for distance education courses and require an institution to disclose certain information related to whether programs leading to professional licensure meet applicable state requirements, regardless of program modality.

State Authorization and Professional Licensure

25ED regulations require institutions that offer postsecondary education programs leading to employment in an occupation that requires licensure or certification to meet certain additional requirements in order for those programs to maintain eligibility to participate in Title IV programs. In each state in which the institution is located, in which students enrolled in distance education are located, or where a student enrolled after July 1, 2024 attests that they intend to seek employment, the program must: (i) meet all applicable federal or state agency accreditation or pre-accreditation requirements, including as a condition of employment in the occupation for which the program prepares the students; (ii) satisfy the applicable state education requirements for professional licensure or certification so that a student seeking employment may qualify to take any licensure or certification exam needed to practice or find employment in the state; and (iii) comply with all applicable state laws related to closure.

Effective July 1, 2024, new ED regulations require institutions that offer postsecondary education programs leading to employment in an occupation that requires licensure or certification to meet certain additional requirements in order for those programs to maintain eligibility to participate in Title IV programs. In each state in which the institution is located, in which students enrolled in distance education are located, or where a student enrolled after July 1, 2024 attests that they intend to seek employment, the program must: (i) meet all applicable federal or state agency accreditation or pre-accreditation requirements, including as a condition of employment in the occupation for which the program prepares the students; (ii) satisfy the applicable state education requirements for professional licensure or certification so that a student seeking employment may qualify to take any licensure or certification exam needed to practice or find employment in the state; and (iii) comply with all applicable state laws related to closure.

State Authorization/Licensure of Our Institutions

APUS is authorized to enroll students from each of the 50 states and the District of Columbia. APUS is headquartered in Charles Town, West Virginia, and is authorized to offer its programs by the West Virginia Higher Education Policy Commission, or WVHEPC. Under current law, if APUS were to lose its accreditation by HLC, WVHEPC may suspend, withdraw, or revoke APUS’s authorization. Failure to comply with WVHEPC requirements could result in APUS losing its authorization from WVHEPC, its accreditation by HLC, its eligibility to participate in Title IV programs and TA, or its ability to offer certain programs, any of which could force APUS to cease operations. As explained further in “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Financial Responsibility”, APUS ~~participates~~is approved to participate in SARA. APUS previously participated on provisional status due to ~~its~~APEI’s consolidated composite score for fiscal ~~year~~ 2022 and 2023 being in the zone. In December 2025, APUS was removed from provisional status because APEI’s consolidated composite score for fiscal 2024 was no longer in the zone, and WVHEPC accepted that composite score without it being the most recently reflected score by ED. APUS also has obtained authorization to operate in California, which is the only state that is a non-SARA jurisdiction.

RU is headquartered in ~~Bloomington~~suburban Minneapolis, Minnesota and is authorized to offer its programs by the Minnesota Office of Higher Education, or MOHE. RU has a total of 2018 campuses across Florida, Illinois, Kansas, Minnesota, and North Dakota, and ~~Wisconsin, and~~ is also authorized to offer its programs by the relevant education agencies in these states. In December 2024, the North Dakota State Board of Higher Education approved RU to operate under a provisional license effective January 1, 2025, due to APEI’s composite score for fiscal year 2022, ~~which~~being isin the ~~most recent composite score that ED has calculated~~zone. In ~~July~~May ~~2024,~~2025 RU ~~closed~~provided ~~its~~APEI’s ~~Lake~~new ~~Elmo,~~fiscal ~~Minnesota~~year ~~campus~~2024 ~~and~~consolidated ~~moved~~composite ~~all~~score ~~enrolled~~and ~~students~~was atremoved ~~the~~from ~~campus~~provisional tostatus ~~RU’s~~and ~~Eagan,~~became ~~Minnesota~~fully ~~campus,~~authorized ~~which~~to isoperate ~~located~~in ~~less than 10 miles from~~ the ~~Lake Elmo campus~~state. In ~~addition,~~July ~~in May~~ 2024, RU ~~notified~~closed ~~the~~its ~~Wisconsin~~Lake ~~Educational Approval Program that it intends to voluntarily close RU’s two Wisconsin campuses~~Elmo, ~~Green~~Minnesota ~~Bay~~campus and ~~Wausau,~~moved ~~effective~~all ~~December~~enrolled ~~31,~~students ~~2025,~~at ~~and~~the ~~2026,~~campus ~~respectively. These actions are expected~~ to ~~directly impact approximately 90 students, or less than 1% of~~ RU’s ~~current~~Eagan, ~~total enrollment.~~

HCN is headquartered in Westerville, Ohio and is authorized to offer its programs by the Ohio State Board of Career Colleges and Schools. HCN has six campuses in Ohio, one campus in Indiana and one campus in Michigan, and is also authorized to offer its programs by the relevant education agencies in these states. 28

Minnesota campus, which is located less than 10 miles from the Lake Elmo campus. In addition, in May 2024, RU notified the Wisconsin Educational Approval Program, or WEAP, that RU intends to voluntarily close RU’s two Wisconsin campuses, Green Bay and Wausau, effective December 31, 2025, and 2026, respectively. All students enrolled at the two Wisconsin campuses had or have expected graduation dates on or before the applicable campus closing date. RU closed the Green Bay campus, effective December 31, 2025, as planned. As of December 31, 2025, closure of the Wausau, Wisconsin campus is expected to directly impact less than ten students.

HCN is headquartered in Westerville, Ohio and is authorized to offer its programs by the Ohio State Board of Career Colleges and Schools. HCN has six campuses in Ohio, one campus in Indiana and one campus in Michigan and is also authorized to offer its programs by the relevant education agencies in these states.

RU and HCN participate in SARA, and RU has also obtained authorization to operate in California. HCN does not offer online programs in California.

For details about “home” state authorization generally, see the “State Authorization/Licensure – Federal Requirements for State Authorization/Licensure – ‘Home’ State Authorization” above.

In addition, the nursing education programs offered by RU and HCN are approved by the relevant state boards of nursing. RU and HCN participate in SARA, and RU has also obtained authorization to operate in California, which is the only state that is a non-SARA jurisdiction. HCN does not offer online programs in California.

~~Effective~~To asmaintain ofregulatory ~~July~~approval ~~2024,~~from athe ~~new~~state ~~Minnesota~~board ~~statute~~of ~~prohibits~~nursing ~~private~~or ~~educational~~equivalent ~~institutions~~body ~~from~~in ~~using~~the ~~agreements~~states that ~~restrict~~we ~~students~~operate, ~~from~~an ~~disclosing~~educational ~~information~~program inmust ~~connection~~maintain ~~with~~a ~~many~~certain ~~types~~pass ofrate ~~student~~on ~~complaints.~~the Inrelevant ~~October~~licensure ~~2024~~exam, ~~MOHE~~as ~~notified~~defined RUby ~~that~~the itstate. ~~had~~If ~~determined~~a ~~that~~program RUdoes ~~had~~not ~~used~~attain anthis ~~impermissible~~pass ~~nondisclosure~~rate, ~~agreement with one student. For more information on~~ the ~~risks~~program ~~related~~may toface ~~this~~various ~~determination~~consequences, ~~see~~including ~~the~~development ~~Risk~~and ~~Factor~~implementation ~~with~~of ~~the~~a ~~caption~~plan ~~beginning~~of ~~“If~~corrective weaction, orissuance ~~our~~of ~~institutions~~a ~~fail~~corrective toorder, ~~comply~~or ~~with~~revocation ~~the~~of ~~extensive~~approval ~~regulatory~~pursuant ~~requirements~~to ~~for~~an ~~the~~adjudication ~~operation of postsecondary education institutions~~proceeding.~~..”~~

ToA ~~maintain~~number ~~regulatory~~of ~~approval~~programs ~~from~~at ~~the~~certain ~~state~~RU ~~board~~campuses ofand ~~nursing or equivalent body~~ in ~~the~~certain states, ~~that~~including weits ~~operate~~Moorhead, anMinnesota, ~~educational~~and ~~program~~Illinois ~~must~~ADN ~~maintain~~programs, aas ~~certain~~well ~~pass~~as ~~rate~~HCN’s onOhio ~~the~~ADN ~~relevant licensure exam~~program, ashave ~~defined~~not bymet ~~the~~ state.-established Iffirst-time aNCLEX ~~program~~benchmarks ~~does~~for ~~not~~consecutive ~~attain~~years. ~~this~~We ~~pass~~believe ~~rate,~~that ~~the~~low ~~program~~pass rates may ~~face~~be ~~various~~the ~~consequences,~~result ~~including development and implementation~~ of a ~~plan~~number of ~~corrective~~factors, ~~action~~including, ~~issuance~~without ~~of a corrective order~~limitation, orthe ~~revocation~~academic preparedness of ~~approval~~our ~~pursuant to an adjudication proceeding. For example~~students, incurriculum ~~Indiana~~gaps, achanges ~~program~~in ~~that~~the ismode ~~under~~of ~~initial~~course ~~accreditation~~delivery ~~may~~including ~~not be granted full accreditation if~~ the ~~program’s~~use ~~pass~~of ~~rate~~virtual iscourses, ~~lower~~testing ~~than~~failures ~~one~~and ~~standard~~inconsistencies, ~~deviation~~imbalances ~~below~~in ~~the~~enrollment ~~average~~and ~~national pass rate. In addition~~resources, ifand ~~the~~changes ~~program’s~~in ~~pass~~admission ~~rate~~standards. isFor ~~lower~~more ~~than~~information, ~~one~~please ~~standard~~refer ~~deviation~~to ~~below~~ the ~~average~~Risk ~~national~~Factor ~~pass~~that ~~rate~~begins ~~for~~with ~~three consecutive years,~~ the ~~program~~caption ~~may~~“Failure ~~be subject~~ to ~~additional~~improve ~~oversight~~certain orof aour ~~change~~programs’ inNCLEX ~~accreditation~~pass ~~status~~rates. ..”.

26The State of Illinois enacted legislation effective January 2024 that changed the Illinois NCLEX pass rate requirements from a one-year measurement based on first attempts only to include a three-year average that includes all test attempts, and temporarily removed all nursing programs, including for RU’s Illinois ADN program, from probationary status until September 2026. RU’s Illinois ADN program is currently approved. The Illinois Department of Financial and Professional Regulation, or IDFPR, has publicly reported that RU’s Illinois ADN program has not met the required NCLEX pass rate for the prior six years. There can be no assurance that IDFPR will not seek to impose different or additional requirements prior to September 2026 as a result of failures to satisfy the required NCLEX pass rate, and we are unable to predict what actions IDFPR may take regarding RU’s Illinois ADN program after September 2026. Actions could include reinstatement of probationary status or withdrawal of approval.

AThe ~~number~~Florida oflegislature ~~programs~~passed atlegislation ~~certain RU campuses and~~ in ~~certain~~May ~~states,~~2025 ~~including~~that ~~its~~would ~~Moorhead,~~have ~~Minnesota,~~subjected ~~Fort~~RU ~~Myers,~~nursing ~~Tampa~~programs ~~and~~to ~~Ocala,~~significant ~~Florida,~~additional ~~and~~regulatory ~~Illinois~~scrutiny ~~and~~by ~~Kansas~~the ~~ADN~~Florida ~~programs~~Board ~~and~~of ~~its Moorhead~~Nursing, ~~Minnesota~~or ~~PN program~~FBN, asand ~~well~~the asFlorida ~~HCN’s~~Department ~~Ohio~~of ~~ADN~~Health. ~~program,~~The ~~have~~legislation ~~not~~was ~~met~~vetoed ~~state-established~~by ~~first-time~~the ~~NCLEX~~governor ~~benchmarks~~in ~~for~~July ~~consecutive~~2025, ~~years.~~but Wewas ~~believe~~expected ~~that~~to ~~low~~lead ~~pass~~to ~~rates~~increased ~~may~~challenges bein ~~the~~hiring ~~result~~and ofretaining aqualified ~~number~~nursing ofprogram ~~factors,~~directors ~~including,~~and ~~without~~increased ~~limitation,~~expenses ~~the~~related ~~academic~~to ~~preparedness~~compliance ofwith ~~our~~new ~~students,~~requirements. ~~curriculum~~The ~~gaps,~~legislation ~~changes~~would inhave ~~the~~allowed ~~mode~~FBN ofto ~~course~~impose ~~delivery~~disciplinary ~~including~~remedies ~~the~~on ~~use~~an ofapproved ~~virtual~~program ~~courses,~~against ~~testing~~which ~~failures~~an ~~and~~adverse ~~inconsistencies,~~action ~~imbalances~~has inbeen ~~enrollment~~taken ~~and~~by ~~resources,~~another ~~and~~regulatory ~~changes~~jurisdiction in ~~admission~~the ~~standards~~United States. ~~For~~Similar ~~more~~legislation ~~information,~~passed ~~please refer to~~ the ~~Risk~~Florida ~~Factor~~House ~~that~~of ~~begins~~Representatives ~~with~~in ~~the~~January ~~caption~~2026, ~~“Failure~~and tois ~~improve~~currently ~~certain~~making ofits ~~our~~way ~~programs’~~through ~~NCLEX~~Florida ~~pass~~Senate ~~rates~~committees.~~..”.~~

~~RU’s~~In ~~Moorhead,~~February ~~Minnesota PN program is currently approved by MBN~~2023, ~~but first-time NCLEX pass rates have been below~~ the ~~standard~~FBN ~~for three consecutive years. In August 2024, MBN~~ placed RU’s ~~Moorhead~~Fort Myers, ~~Minnesota~~Florida PNADN program on ~~conditional~~probation ~~approval~~due ~~status~~to ~~and~~two ~~issued a corrective action order. MBN conducted a survey visit in February 2025, regarding the third~~ consecutive ~~year~~years of ~~below-standard~~its NCLEX pass rates. ~~The~~not ~~findings~~meeting of the ~~visit~~state ~~will~~standard. beIn ~~presented~~February ~~to MBN’s Board in mid-2025~~2024, ~~and~~FBN wenotified ~~believe~~RU that the ~~findings~~program ~~are~~would ~~likely~~be allowed to ~~result~~continue inon aprobation ~~corrective action order~~ for ~~the~~one ~~ADN~~additional ~~program~~year. ~~The~~RU ~~program’s~~achieved the required NCLEX pass rate ~~must~~in ~~meet the state standard by the end of June 2025~~2024, ~~measured~~and ~~using~~FBN ~~cumulative~~removed ~~pass~~probation ~~rates~~status ~~from~~at ~~the~~its ~~preceding~~February ~~four quarters (i.e.~~5, ~~July~~2025 ~~2024~~board ~~to June 2025)~~meeting.

AAt ~~stipulation~~its ~~and~~May ~~consent~~2024 ~~order~~meeting, ~~with~~the ~~MBN~~Florida ~~required~~Commission ~~RU’s~~for ~~Bloomington,~~Independent ~~Minnesota ADN program to~~Education, ~~among~~or ~~other things~~FCIE, ~~reach~~reviewed ~~applicable~~RU ~~NCLEX~~for ~~pass~~a ~~rate~~substantive ~~standards~~change bydue ~~the~~to ~~end~~financial ofstability ~~2023~~concerns and, ~~maintain~~at athe ~~specified~~time, ~~student~~the toFort ~~faculty~~Myers, ~~ratio in 2023~~Tampa, ~~with a potential penalty up to~~ and ~~including withdrawal of program approval. The Bloomington~~Ocala, ~~Minnesota~~Florida ADN ~~program~~programs ~~did~~being ~~not~~placed ~~reach~~on ~~the~~probation ~~applicable NCLEX pass rates~~ by ~~the end of 2023~~FBN. AsFCIE asubsequently ~~result,~~placed ~~on December 29, 2023,~~ RU ~~informed~~on ~~MBN~~a ~~that~~provisional itlicense ~~intended~~until toNovember ~~voluntarily close the Bloomington~~30, ~~Minnesota ADN program on June 15,~~ 2024. ~~MBN~~To ~~approved~~fulfill ~~the~~a ~~voluntary closure of the Bloomington, Minnesota ADN program at its February 1, 2024, meeting.~~

In February 2022, RU’s Illinois ADN program was placed on probationary status by the Illinois Department of Financial and Professional Regulation, or IDFPR. RU was required to temporarily reduce admitted students in the program by 25% and was given two years to demonstrate evidence of implementing strategies to correct deficiencies and satisfy the required NCLEX pass rate. 29

~~The~~condition ~~State~~ of ~~Illinois~~licensure, ~~enacted~~RU ~~legislation~~submitted inan ~~August~~interim ~~2023,~~report ~~which~~on ~~took~~its ~~effect~~financial oncondition ~~January~~and 1,NCLEX ~~2024,~~pass ~~that~~rates ~~changed~~for the ~~Illinois~~Fort ~~NCLEX~~Myers, ~~pass~~Ocala ~~rate~~and ~~requirements~~Tampa, ~~from~~Florida aADN ~~one-year~~programs ~~measurement~~to ~~based~~FCIE onin ~~first~~July ~~attempts~~2024. ~~only~~RU’s toannual arenewal ~~three-year~~was ~~average~~reviewed ~~that~~by ~~includes~~FCIE ~~all~~in ~~test~~November ~~attempts~~2024, and ~~temporarily~~RU ~~removed~~was ~~all~~granted ~~nursing~~a ~~programs,~~provisional ~~including~~license for 2025. In May 2025, considering the ADN programs’ removal from probation and RU’s ~~Illinois~~positive ~~ADN~~working ~~program~~capital, FCIE moved RU from ~~probationary~~a ~~status~~provisional ~~until~~license ~~September~~back ~~2026~~to a full License by Means of Accreditation. In ~~October~~July ~~2024~~2025, FCIE, placed RU on a provisional license due to RU’s ~~Illinois~~application ~~ADN~~for ~~program~~Substantive ~~was~~Change, ~~included~~Change in ~~IDFPR’s~~Ownership ~~published~~or ~~list~~Control ofrequired ~~approved~~for ~~nursing~~the ~~programs~~Combination. ~~with~~In noNovember ~~reference~~2025, FCIE moved RU back to ~~probation;~~a ~~however,~~full License by Means of Accreditation following a review of its ~~low~~annual ~~pass~~renewal ~~rate~~application ~~for~~in connection with the two-step ~~consecutive~~process ~~years~~required ~~was~~by ~~acknowledged~~ED to implement the Combination.

~~Kansas~~HCN’s ~~regulations~~ADN ~~were~~program ~~amended,~~has ~~effective~~been ~~January~~on ~~2022,~~provisional toapproval ~~increase~~status ~~the~~in ~~threshold~~Ohio ~~first-time~~since ~~pass~~March ~~rate~~2017 due to ~~80%~~not ~~and~~meeting ~~change~~the ~~corrective~~first-time ~~actions~~pass ~~for~~rate ~~noncompliance~~standard. InThe ~~April~~Ohio ~~2022, RU’s Kansas ADN program was issued a notice of concern by the Kansas~~ Board of Nursing, or ~~KBN~~OBN, ~~requiring~~will RUconsider torestoring ~~submit to the KBN~~ a ~~plan~~program ~~of action~~ to ~~improve~~full ~~its~~approval ~~NCLEX~~status ~~pass~~when ~~rates.~~the ~~The Kansas ADN~~ program ~~had~~meets ~~until April 2024 to increase its NCLEX pass rate to~~ the ~~regulatory standard. RU’s Kansas ADN program’s~~ first-time pass rate ~~exceeded~~standard ~~the threshold pass rate~~ for ~~2023~~at inleast ~~advance~~two ofconsecutive ~~the April 2024 deadline~~years.

In February 2023, the Florida Board of Nursing, or FBN, placed RU’s Fort Myers, Florida ADN program on probation due to two consecutive years of its NCLEX pass rates not meeting the state standard. In February 2024, FBN notified RU that the program will be allowed to continue on probation for one additional year. If the program fails to achieve the required NCLEX pass rate at the end of this additional one-year period, but the program continues to show adequate progress toward the required pass rate, FBN may allow the program to continue on probation for one additional year. If the program fails to show adequate progress toward the required pass rate, FBN may choose to disapprove the program. RU is required to disclose this status to active and prospective students.

In March 2024, FBN placed RU’s ADN programs at its Tampa, and Ocala, Florida, campuses, along with the Ocala campus satellite program at North Orlando, Florida, on probationary status due to two consecutive years of NCLEX pass rates not meeting the state standard. In January 2025, RU’s ADN programs at its Fort Myers, Tampa, and Ocala, Florida campuses received notification from FBN that the programs met NCLEX pass rate requirements, and they were removed from probationary status at FBN’s February 2025 Board meeting.

At its May 2024 meeting, the Florida Commission for Independent Education, or FCIE, reviewed RU for a substantive change due to financial stability concerns and, at the time, the Fort Myers, Tampa and Ocala, Florida ADN programs being placed on probation by FBN. FCIE subsequently placed RU on a provisional license until November 30, 2024. To fulfill a condition of licensure, RU submitted an interim report on its financial condition and NCLEX pass rates for the Fort Myers,

Ocala and Tampa, Florida ADN programs to FCIE in July 2024. RU’s annual renewal was reviewed by FCIE in November 2024, and RU was granted a provisional license for 2025.

HCN’s ADN program has been on provisional approval status in Ohio since March 2017 due to not meeting the first-time pass rate standard for five consecutive years. The Ohio Board of Nursing, or OBN, will consider restoring a program to full approval status if the program meets the first-time pass rate standard for at least two consecutive years. In January 2023, OBN placed HCN’s PN program on provisional approval for a period of 18 months due to two self-reported instances of noncompliance with faculty credential and program records requirements. As a result, HCN was required to submit to OBN progress reports evidencing that it meets and maintains nursing program requirements. In July 2024, OBN restored the PN program to full approval status for a five-year period after HCN hosted a site visit from OBN.

Failure to comply with state authorization or licensure requirements has impacted and could in the future restrict our institutions’ ability to recruit or enroll students or result in other sanctions, including fines and penalties. New laws, regulations, interpretations, or changed circumstances related to our institutions’ educational programs could increase our cost of doing business and affect our ability to recruit students and offer programs in particular states, which could, in turn, adversely affect our institutions’ enrollments and revenue and have a material effect on our business. Additional information regarding the current impacts and potential risks associated with our NCLEX pass rates is provided in the “Risk Factors” section of this Annual Report.

Student Financing Sources and Related Regulations/Requirements

Our students finance their education through a combination of Title IV programs, TA, education benefits administered by the VA, private loans, corporate reimbursement programs, individual resources, and institutional grants, and in the case of HCN, extended payment plan options. Participation in federal student aid programs, including those administered by the DoD and VA, and the extended payment plan options at HCN, adds to the regulation of our operations.

Department of Education

The Higher Education Act of 1965, as amended, or the HEA, and related ED regulations subject us to significant scrutiny in the form of numerous standards we must satisfy in order to participate in and administer Title IV programs. The federal government provides support for postsecondary education through the Title IV programs in the form of grants and loans to eligible students who can use those funds to enroll in an eligible educational program at any institution that has been certified by ED. An institution will be certified to participate in the Title IV programs only if, among other things, it enters into a written program participation agreement, or PPA, with ED, which conditions participation in Title IV programs upon compliance with ED regulations and any additional conditions specified in the PPA.

ED regulations ~~effective July 1, 2024,~~ modify and expand requirements related to financial responsibility, administrative capability, and certification procedures. Under the modified regulations, institutions are required to meet additional financial responsibility criteria and must report certain “financial responsibility” events to ED. Such events include certain mandatory and discretionary triggers that capture financial circumstances that may not be reflected in an institution’s financial statements, including instances where an institution faces a potential loss of Title IV funding. If ED determines that an institution has 90/10 Rule violations, high borrower default rates, or certain pending legal and administrative actions, it will require the institution to post “financial protection”, such as a letter of credit. ED may also require the institution to post financial protection if it determines that certain discretionary triggers may have an adverse effect on the financial condition of the institution, such as pending accrediting agency or government agency actions, high annual dropout rates, or pending borrower defense claims. If ED requires financial protection as a result of more than one mandatory or discretionary trigger, ED will require separate financial protection for each individual trigger. In addition to financial protection, ED may require institutions that fail to meet these financial responsibility criteria to participate in Title IV programs under a provisional certification. ED may also impose additional requirements on the institution’s participation in Title IV programs, such as restrictions on enrollment, addition of new programs, or acquisitions.

In August 2024, ED announced that it would publish certain information related to PPAs, some of which ED already makes publicly available online or upon request. Specifically, ED will now make publicly available on its website the Title IV participation statuses of the institutions currently participating in one or more Title IV programs, an example of a typical full certification PPA, copies of all provisional PPAs executed on or after January 1, 2024 and June 26, 2024, which will be updated on a rolling basis to include provisional PPAs issued after June 26, 2024, and a list of adverse administrative actions initiated between October 1, 2021, and July 31, 2024 against institutions participating in Title IV programs, which will be updated on a quarterly basis.

Higher Education Act

The HEA must be periodically reauthorized by Congress, and each Title IV program must be funded through appropriations acts on an annual basis. The most recent comprehensive reauthorization occurred in 2008 when Congress reauthorized most HEA programs through the 2014 federal fiscal year. The reauthorization has been temporarily extended in the years that have followed. Congress previously considered comprehensive legislation to reauthorize the HEA, including proposals from Republicans and Democrats, referred to as the Student Aid Improvement Act and the College Affordability Act, respectively, and Congress could consider such legislation again in the future.

the years that have followed. Congress previously considered comprehensive legislation to reauthorize the HEA, including proposals from Republicans and Democrats, referred to as the Student Aid Improvement Act and the College Affordability Act, respectively, and Congress could consider such legislation again in the future.

We cannot predict whether, in what form, or when, HEA reauthorization legislation will be enacted. Modifications to the HEA could occur as part of reauthorization, which could require us to modify our business practices and increase administrative costs, thereby negatively impacting our results of operations.

Types of Title IV Financial Aid Programs.

Title IV program aid is primarily awarded to students on the basis of financial need, generally defined as the difference between the cost of attending an institution and the amount a student can reasonably contribute. Our students receive grants and loans to fund their education under several Title IV programs, of which the two largest are federal Direct Loans, or Direct Loans, and Pell Grants. Some of our students may also be eligible for other Title IV grant programs, such as the Federal Supplemental Education Opportunity Grant. The Title IV programs are subject to Congressional action in terms of appropriations and other legislation that may affect funding levels, student eligibility, and other requirements. For example, the Pell Grant program could be subject to cuts or changes in the future, and cuts in ED’s administrative budget could lead to delays in student eligibility determinations and delays in origination and processing of federal student loans. On July 4, 2025, the One Big Beautiful Bill Act, or the OBBBA, was signed into law. Among other things, the OBBBA amends portions of the HEA and makes changes to the Title IV programs. Additional information regarding such changes is available below under “Compliance with Regulatory Standards and the Effect of Regulatory Violations – Other Recent Legislative and Regulatory Activity – The One Big Beautiful Bill Act”.

Regulation of Title IV Financial Aid Programs

To be eligible and certified to participate in Title IV programs, an institution must be accredited by an accrediting body recognized by ED, must be authorized to operate by the appropriate regulatory authority in each state where the institution maintains a physical presence, and must comply with specific standards and procedures set forth in the HEA and the regulations issued thereunder by ED.

ED periodically revises its regulations and changes its interpretations of existing laws and regulations. Accrediting agencies and state education agencies also have responsibilities for overseeing institutional compliance with certain Title IV program requirements. For these reasons, we cannot predict with certainty how Title IV program requirements will be applied in all circumstances. Key provisions relating to institutional participation in Title IV and the processing of Title IV aid that could adversely affect us include the following:

Eligibility and Certification Procedures. An institution must apply periodically to ED for continued certification to participate in Title IV programs. Recertification generally is required every six years, but may be required earlier, including when an institution undergoes a change in ownership resulting in a change of control. An institution may come under review when it expands its activities in certain ways, such as opening an additional location, adding a new program, or, in certain cases, when it modifies academic credentials that it offers.

ED regulations effective July 1, 2024, implement supplementary performance measures that ED will consider when determining whether to certify or condition an institution’s participation in Title IV programs. Among other requirements, ED may consider amounts spent on instruction and instructional activities, academic support, and support services, compared to the amounts spent on recruiting activities, advertising, and other pre-enrollment expenditures. In addition, if a program is designed to meet educational requirements for a specific professional license or certification that is required for employment in an occupation, and the institution is required by an accrediting agency or state to report passage rates for the licensure exam for the program, ED may consider such passage rates.

ED may place an institution on provisional certification status if ED finds that the institution does not fully satisfy all Title IV requirements and in certain other circumstances, such as when an institution undergoes a change in ownership resulting in a change of control. During a period of provisional certification, the institution must comply with any additional conditions imposed by ED. In addition, ED may more closely review a provisionally certified institution if it applies for approval to open a new location, add an educational program, acquire another school, or make any other significant change. If ED determines that a provisionally certified institution is unable to meet its responsibilities, it may seek to revoke the institution’s certification to participate in Title IV programs with fewer due process protections than if it were fully certified.

a provisionally certified institution is unable to meet its responsibilities, it may seek to revoke the institution’s certification to participate in Title IV programs with fewer due process protections than if it were fully certified.

In June 2020, APUS timely applied for recertification to participate in Title IV programs. ED subsequently notified APUS that it had completed its review of APUS’s application and had granted APUS provisional certification until June 30, 2023, because APUS was subject to an open program review at the time of renewal. That program review was closed in January 2021 with no findings, penalties, or further action required. APUS applied for recertification in March 2023. In July 2024, ED notified APUS that it had approved APUS’s continued participation in the Title IV programs under a Provisional Program Participation Agreement, or PPPA, that is effective July 15, 2024, and expires June 30, 2026. ED granted approval on a provisional basis because APUS was subject to an open program review (described below) at the time of recertification. The PPPA imposes new reporting requirements on APUS related to accrediting agency actions, governmental actions, and class actions. Additionally, APEI co-signed the PPPA pursuant to new regulations effective July 1, 2024, which require an entity with a direct or indirect ownership interest and the power to exercise control over the institution to co-sign the PPPA and assume joint and several liability for the participating institution’s Title IV liabilities.

In July 2021, in connection with RU’s March 2019 change in ownership that preceded our acquisition of RU, ED imposed certain temporary growth restrictions on RU, including limitations on new programs and locations and a cap on enrollments of students who participate in Title IV programs. Additionally, ED required RU to submit periodic financial and enrollment reports and a financial responsibility letter of credit. RU was initially required to fund this letter of credit using a restricted deposit account that required a deposit of 105%, or $24.2 million, to secure the RU letter of credit. In connection with the acquisition of RU, or the Rasmussen Acquisition, RU timely submitted a change in ownership and control application to ED seeking approval to participate in the Title IV programs under our ownership and, effective October 2021, ED and RU entered into a Temporary Provisional Program Participation Agreement, or TPPPA, that allowed RU to continue disbursing Title IV funds while ED reviewed the change in ownership application. The TPPPA continued the restrictions that ED imposed as a result of the March 2019 change in ownership. In August 2023, ED notified RU that it had approved RU’s continued participation in the Title IV programs under APEI ownership under a PPPA. The PPPA continues to impose certain growth restrictions on RU that were included in the TPPPA, including limitations on new programs and locations and the enrollment of students that participate in Title IV programs. ED continues the prior requirement that RU submit periodic financial and Title IV enrollment reports. The PPPA also imposes new reporting requirements related to accrediting agency actions, government actions, class actions, and student complaints. The PPPA specifies that after ED reviews and accepts financial statements and compliance audits for one complete fiscal year of RU’s Title IV participation under APEI’s ownership, RU may seek approval for new programs that replace current programs. Because one complete fiscal year of RU’s Title IV participation under APEI’s ownership has passed and ED has accepted the financial statements and compliance audits for that year, we believe that we may now seek approval for new programs that replace current programs. The PPPA also specifies that after ED reviews and accepts financial statements and compliance audits that cover the second complete fiscal year of RU’s Title IV participation under our ownership, RU must seek pre-approval for new locations, new programs that are not replacing current programs, and other changes. For the second and third fiscal years, RU is also subject to enrollment growth limitations, after which RU can request that ED release RU from further enrollment restrictions. The PPPA no longer requires RU to post the financial responsibility letter of credit that ED had imposed based on the 2019 change in ownership and control of RU, although this letter of credit has not yet been released. We believe we have met all obligations for the release of the letter of credit.

In June 2021, HCN timely applied for recertification to participate in Title IV programs. ED subsequently notified HCN that it had been granted provisional certification for all Title IV programs until September 30, 2023. ED granted approval on a provisional basis because HCN was subject to an open program review at the time of recertification. As described in “Compliance with Regulatory Standards and Effect of Regulatory Violations – Compliance Reviews,” in July 2022, HCN received a final program review determination from ED, and in September 2022, ED notified HCN that it had closed the program review, and no further action was required though the provisional designation remained. In June 2023, HCN again timely applied for recertification. ED subsequently notified HCN that it had recertified HCN’s participation in all Title IV programs effective August 15, 2023, and expiring June 30, 2026.

Co-Signature Requirements. A participating institution must sign a PPA with ED as a condition to participation in Title IV programs. Regulations effective July 1, 2024, codify a current ED policy requiring signatures from corporations or other legal entities that have, or could have, a direct or indirect effect on the institution’s financial responsibility. Under the new regulations, entities with a direct or indirect ownership interest and the power to exercise control over the institution must co-sign the PPA. Co-signers agree that they are jointly and severally liable for the participating institution’s Title IV liabilities.

submission of accurate reports to ED, referring to ED’s Office of Inspector General, or ED OIG, credible information that a student or employees with Title IV responsibilities may have engaged in fraud or illegal conduct in connection with Title IV program administration, and various other procedural matters. As further explained above under “Student Financing Sources and Related Regulations/Requirements – Department of Education,” due to ED regulations effective July 1, 2024, ED may find that an institution has failed the administrative capability requirements if the institution does not provide adequate financial aid counseling or career services, has been subject to a negative action by a state or federal agency, court, or accreditor, fails to verify high school diplomas, or does not timely place students in geographically accessible clinical or externship opportunities. If an institution fails to satisfy any of the administrative capability requirements, ED may require the repayment of Title IV program funds, transfer the institution from the “advance” method of payment of Title IV program funds to heightened cash monitoring status, or to the “reimbursement” method of payment, place the institution on provisional certification status, or commence a proceeding to impose a fine or to limit, suspend, or terminate the participation of the institution in Title IV programs.

Financial Responsibility. The HEA and ED regulations establish extensive standards of financial responsibility that institutions must satisfy in order to participate in Title IV programs. These standards generally require that an institution provide the services described in its official publications and statements, properly administer Title IV programs in which it participates, and meet all of its financial obligations, including making required refunds and any repayments to ED.

ED evaluates institutions on an annual basis for compliance with specified financial responsibility standards, including a complex formula based on line items from the institution’s audited financial statements. The formula focuses on three financial ratios: (i) equity ratio (which measures the institution’s capital resources, financial viability, and ability to borrow); (ii) primary reserve ratio (which measures the institution’s viability and liquidity); and (iii) net income ratio (which measures the institution’s profitability or ability to operate within its means). Generally, an institution’s financial ratios must yield a composite score of at least 1.5 for the institution to be deemed financially responsible. A composite score between 1.0 and 1.4 is considered by ED to be in the “zone.” An institution in the “zone” may still participate in the Title IV programs as a financially responsible institution through the “zone alternative” or the “financial protection alternative” as set forth in ED regulations. Under the zone alternative, an institution: must request and receive funds under the heightened cash monitoring or reimbursement payment methods (resulting in a delayed method of cash funding for Title IV aid); may be required to provide additional information to ED upon request (e.g., early submission of financial statement and compliance audit, information about current operations and future plans); must require its auditor to express an opinion regarding compliance with zone alternative requirements; and must provide timely information to ED regarding certain oversight and financial events. Under the financial protection alternative, the institution must provide financial protection of at least 50% of the Title IV funding that it received during its most recently completed fiscal year.

ED may also apply the financial responsibility standards to other entities under common ownership with an eligible institution. At the request of ED, for purposes of evaluating the financial responsibility of our institutions, including the composite score calculation, we supply consolidated financial statements to ED. Because ED does not review each of our institution’s financial statements separately, a determination by ED that our consolidated financial statements do not satisfy the “financial responsibility” requirements could cause all of our institutions to lose access to Title IV program funding or result in other penalties or conditions on continued participation. See risk factor captioned “Our subsidiary institutions’ failure to meet financial responsibility..” for more information.

In March 2024, ED notified us that in calculating our composite score for the fiscal year-ended December 31, 2022, it excluded our deferred tax assets from its calculation of our assets. As a result, ED calculated that we had a 2022 consolidated composite score of 1.1 and our institutions were therefore in the “zone.” We disagree with ED’s calculation and conclusion and submitted a timely response to ED also in March 2024. In April 2024, ED issued a response to our rebuttal and disagreed with our position, reiterating that our institutions must establish financial responsibility on an alternative basis. We timely informed ED in April 2024 that although we continue to disagree with its composite score methodology with respect to deferred tax assets, we select the “zone alternative” as the alternative basis on which we establish financial responsibility. Under the zone alternative, we are required to: (i) make Title IV disbursements to eligible students and parents under the heightened cash monitoring payment method, or HCM1, pursuant to which we would be required to first make disbursements to eligible students and parents and pay any credit balances before we request or receive funds from ED for the amount of those disbursements; (ii) notify ED of certain events, such as an adverse action taken by any of our institution’s accreditors or state authorizing agencies; (iii) provide regular reports to ED relating to our institution’s current operations and future plans; and (iv) require our auditors to express an opinion on our compliance with the requirements under the zone alternative. In addition, our institutions will be required to seek ED’s approval prior to adding educational programs or a new location at which the institution offers or will offer 50% or more of an educational program.

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WeAdditionally, ~~refer~~ED required RU to ~~these~~submit ~~regulations~~periodic asfinancial ~~the~~and ~~2019~~enrollment ~~Borrower~~reports ~~Defense~~and ~~Regulations~~a financial responsibility letter of credit. ~~The~~RU ~~2019~~was ~~Borrower~~initially ~~Defense~~required ~~Regulations~~to ~~identify~~fund ~~certain~~this ~~conditions~~letter orof ~~other~~credit ~~triggering~~using ~~events~~a restricted deposit account that ~~have~~required a deposit of 105%, or ~~may~~$24.2 ~~have~~million, anto ~~adverse~~secure ~~material~~the ~~effect~~RU onletter of credit. In connection with the ~~institution’s~~acquisition ~~financial~~of ~~condition~~RU, or the Rasmussen Acquisition, RU timely submitted a change in ~~response~~ownership toand ~~which~~control application to ED ~~would~~seeking orapproval ~~could~~to ~~require~~participate ~~that~~in the ~~institution~~Title ~~submit~~IV ~~some~~programs ~~form~~under ofour ~~financial~~ownership ~~protection~~and, ~~such~~effective asOctober 2021, ED and RU entered into a ~~letter~~Temporary ofProvisional ~~credit~~Program Participation Agreement, or TPPPA, that allowed RU to continue disbursing Title IV funds while ED reviewed the change in ownership application. ~~Triggering~~The ~~events~~TPPPA ~~are~~continued ~~characterized~~the restrictions that ED imposed as ~~either~~a ~~mandatory~~result orof ~~discretionary~~the March 2019 change in ownership. In August 2023, ED ~~will~~notified ~~consider~~RU anthat ~~institution~~it ~~unable~~had toapproved ~~meet~~RU’s ~~its~~continued ~~financial~~participation orin ~~administrative~~the ~~obligations~~Title ifIV anprograms ~~institution~~under ~~experiences~~APEI aownership ~~mandatory~~under ~~triggering~~a ~~event~~PPPA. ED ~~may~~continues ~~consider~~the anprior ~~institution~~requirement ~~not~~that toRU besubmit ~~financially~~periodic ~~responsible~~financial ifand anTitle ~~institution~~IV ~~experiences~~enrollment areports. ~~discretionary~~The ~~triggering~~PPPA ~~event.~~also ~~For~~imposes ~~each~~new ~~triggering~~reporting ~~event,~~requirements related to ~~demonstrate~~accrediting ~~that~~agency ~~the~~actions, ~~institution~~government ~~remains~~actions, ~~financially~~class ~~responsible~~actions, ~~the~~and ~~institution~~student ~~may~~complaints. ~~submit~~The ~~evidence~~PPPA specifies that ~~the~~after ~~triggering~~ED ~~event~~reviews ~~has~~and ~~been~~accepts ~~resolved,~~financial ~~that~~statements ~~the~~and ~~institution~~compliance ~~has~~audits ~~insurance~~for ~~that~~one ~~will~~complete ~~cover~~fiscal ~~part~~year orof ~~all~~RU’s ofTitle ~~the~~IV ~~debt~~participation orunder ~~liabilities~~APEI’s ownership, orRU ~~that~~may ~~the~~seek ~~triggering~~approval ~~event~~for ~~has~~new ~~not~~programs orthat ~~will~~replace ~~not~~current ~~have~~programs. aThe ~~material~~PPPA ~~adverse~~also ~~effect~~specifies onthat ~~the~~after ~~institution.~~ED Ifreviews EDand ~~determines~~accepts financial statements and compliance audits that ~~one~~cover the second complete fiscal year of ~~our~~RU’s ~~institutions~~Title isIV ~~not~~participation ~~financially~~under ~~responsible~~our ~~because~~ownership, ofRU ~~one~~may orseek ~~more~~approval ~~triggering~~for ~~events~~new locations, ~~the~~new ~~institution~~programs ~~would~~that beare ~~required~~not toreplacing ~~provide~~current anprograms, ~~irrevocable~~and ~~letter~~other changes. Because two complete fiscal years of ~~credit~~RU’s ~~equal~~Title toIV atparticipation ~~least~~under ~~10%~~APEI’s ofownership ~~the~~have ~~amount~~passed ofand ~~federal~~ED ~~student~~has accepted the financial ~~aid~~statements ~~funds~~and ~~received~~compliance byaudits ~~the~~for ~~institution~~those years, RU may now seek approval for ~~the~~new ~~past~~locations, ~~year.~~new Inprograms ~~October~~whether ~~2023~~or not they are replacing current programs, EDand ~~published~~other ~~modifications~~changes. toRU ~~its~~remains ~~financial~~subject ~~responsibility~~to ~~standards~~enrollment ~~effective~~growth ~~July~~limitations 1,under ~~2024~~the PPPA. ~~These~~RU ~~revised~~can ~~standards~~request ~~include,~~that ~~among~~ED ~~other~~release ~~requirements,~~RU anfrom ~~expanded~~further ~~list~~enrollment restrictions after three full fiscal years of ~~conditions~~RU’s orTitle ~~other~~IV ~~triggering~~participation ~~events~~under ~~for~~APEI’s ~~which~~ownership. EDThe ~~could~~August ~~require~~2023 ~~financial~~PPPA ~~protection,~~no ~~such~~longer asrequires aRU to post the financial responsibility letter of credit that ED had imposed based on the 2019 change in ownership and control of RU. In ~~addition~~May 2025, if ED ~~requires~~released ~~financial~~the ~~protection~~letter asof acredit ~~result~~and ofreleased ~~more~~RU ~~than~~from ~~one~~temporary ~~mandatory~~growth orrestrictions ~~discretionary~~imposed ~~trigger,~~in itconnection ~~will~~with ~~require~~RU’s ~~separate~~2019 ~~financial~~change ~~protection~~in ownership. RU must apply for ~~each~~recertification ~~individual~~of ~~trigger~~its Title IV participation by March 31, 2026.

In June 2023, HCN timely applied for recertification to participate in Title IV programs. ED subsequently notified HCN that it had recertified HCN’s participation in all Title IV programs effective August 15, 2023, and which expires on September 30, 2026. If ED approves the Combination, the scope of APUS’s certification to participate in Title IV programs will be expanded to include RU and HCN and RU and HCN will no longer have separate Title IV certifications. See “Business – Regulatory Environment – Accreditation – Institutional Accreditation” above for more information.

Administrative Capability. ED regulations specify extensive criteria that an institution must satisfy to establish that it has the requisite administrative capability to participate in Title IV programs. These criteria relate to, among other things, institutional staffing, operational standards such as procedures for disbursing and safeguarding Title IV program funds, timely submission of accurate reports to ED, referring to ED’s Office of Inspector General, or ED OIG, credible information that a student or employees with Title IV responsibilities may have engaged in fraud or illegal conduct in connection with Title IV program administration, and various other procedural matters. ED may find that an institution has failed the administrative capability requirements if the institution does not provide adequate financial aid counseling or career services, has been subject to a negative action by a state or federal agency, court, or accreditor, fails to verify high school diplomas, or does not timely place students in geographically accessible clinical or externship opportunities. If an institution fails to satisfy any of the administrative capability requirements, ED may require the repayment of Title IV program funds, transfer the institution from the “advance” method of payment of Title IV program funds to heightened cash monitoring status, or to the “reimbursement” method of payment, place the institution on provisional certification status, or commence a proceeding to impose a fine or to limit, suspend, or terminate the participation of the institution in Title IV programs.

provide the services described in its official publications and statements, properly administer Title IV programs in which it participates, and meet all of its financial obligations, including making required refunds and any repayments to ED.

ED evaluates institutions on an annual basis for compliance with specified financial responsibility standards, including a complex formula based on line items from the institution’s audited financial statements. The formula focuses on three financial ratios: (i) equity ratio (which measures the institution’s capital resources, financial viability, and ability to borrow); (ii) primary reserve ratio (which measures the institution’s viability and liquidity); and (iii) net income ratio (which measures the institution’s profitability or ability to operate within its means). Generally, an institution’s financial ratios must yield a composite score of at least 1.5 for the institution to be deemed financially responsible. A composite score between 1.0 and 1.4 is considered by ED to be in the “zone.” An institution in the “zone” may still participate in the Title IV programs as a financially responsible institution through the “zone alternative” or the “financial protection alternative” as set forth in ED regulations. Under the zone alternative, an institution: (i) must request and receive funds under the heightened cash monitoring or reimbursement payment methods (resulting in a delayed method of cash funding for Title IV aid); (ii) may be required to provide additional information to ED upon request (e.g., early submission of financial statement and compliance audit, information about current operations and future plans); (iii) must require its auditor to express an opinion regarding compliance with zone alternative requirements; and (iv) must provide timely information to ED regarding certain oversight and financial events. Under the financial protection alternative, the institution must provide financial protection of at least 50% of the Title IV funding that it received during its most recently completed fiscal year.

In April 2025, ED notified us that according to its calculations, we had a fiscal year end 2023 consolidated composite score of 1.3 and our institutions were therefore in the “zone,” and we selected the “zone alternative” as the alternative basis on which we establish financial responsibility. Thereafter, APUS, RU and HCN operated under the zone alternative to establish financial responsibility, which imposed on us certain restrictions and obligations, including the heightened cash monitoring payment method, or HCM1. On March 10, 2026, ED notified us that, as of such date, APUS, RU, and HCN were no longer required to comply with the zone alternative requirements due to a composite score for fiscal 2024 of 2.6.

Institutions with composite scores below 1.5 do not qualify for approval from SARA unless, in the case of scores above 1.0, the home state exercises its discretion to consider additional financial information. Eligibility for SARA is determined separately for each of our institutions by the SARA portal agency in the institution’s home state. If the respective SARA portal agency for APUS, RU, or HCN were not to renew the institution’s approval due to a low composite score, we would need to obtain approval or exemptions in states in which the affected institution offers distance education programs or discontinue the affected institution’s offerings to students in such states. In addition, some states have adopted financial standards that are similar to ED’s composite score, which means an affected institution may be unable to obtain licensure in that state if it were to lose SARA participation. And, because composite scores are viewed as a measure of financial responsibility, other regulators or accreditors could consider a composite score that is in “zone” negatively, which could have an impact on their interactions with us and what they permit us to do. APUS participated in SARA in 2025 on provisional status due to its composite score for fiscal 2022 and 2023 being in the zone. In December 2025, APUS was removed from provisional status because its composite score for fiscal 2024 was no longer in the zone, and WVHEPC accepted that composite score in advance of it being approved by ED.

In September 2019, ED published modifications to its financial responsibility standards in regulations that took effect July 1, 2020, or the 2019 Borrower Defense Regulations. The 2019 Borrower Defense Regulations, among other matters, identify certain conditions or other triggering events that have or may have an adverse material effect on the institution’s financial condition, in response to which ED would or could require that the institution submit some form of financial protection, such as a letter of credit, to ED. Triggering events are characterized as either mandatory or discretionary. ED will consider an institution unable to meet its financial or administrative obligations if an institution experiences a mandatory triggering event. ED may consider an institution not to be financially responsible if an institution experiences a discretionary triggering event. For each triggering event, to demonstrate that the institution remains financially responsible, the institution may submit evidence that the triggering event has been resolved, that the institution has insurance that will cover part or all of the debt or liabilities, or that the triggering event has not or will not have a material adverse effect on the institution. If ED determines that one of our institutions is not financially responsible because of one or more triggering events, the institution

would be required to provide an irrevocable letter of credit equal to at least 10% of the amount of federal student financial aid funds received by the institution for the past year for each triggering event.

The “90/10 Rule.” Under the so-called “90/10 Rule”, a for-profit institution is prohibited from deriving more than 90% of its revenue (as computed by ED) on a cash accounting basis (except for certain institutional loans) from Title IV programs for any fiscal year. If an institution fails to satisfy the 90/10 Rule for any fiscal year, the institution is placed on provisional status for two fiscal years. An institution that fails to satisfy the rule for two consecutive fiscal years becomes ineligible to participate in Title IV programs for at least two fiscal years and is required to demonstrate compliance with Title IV eligibility and certification requirements for at least two additional fiscal years prior to resuming Title IV program participation. Such institution would also lose the ability to participate in TA because DoD requires institutions to participate in the Title IV programs in order to participate in TA. Ineligibility of any one or more of our institutions to participate in Title IV programs and TA would have a material adverse effect on our enrollments, revenue, results of operations, and cash flows.

The American Rescue Plan Act, or ARPA, ~~which was enacted in March 2021,~~ modified the HEA’s 90/10 Rule to require that a for-profit institution derive not less than 10% of its revenue from sources other than “federal education assistance funds”. ED ~~published final~~ regulations ~~in October 2022~~ that address ARPA’s modifications to the 90/10 Rule ~~and~~ provide that ~~for fiscal years beginning on or after January 1, 2023,~~ federal educational assistance funds used to calculate the “90%” side of the ratio include Title IV funds and any other for fiscal years beginning on or after January 1, 2023, educational assistance funds provided by a federal agency directly to an institution or a student, including the federal portion of any grant funds provided by or administered by a non-federal agency, except for non-Title IV federal funds provided directly to a student to cover expenses other than tuition, fees, and other institutional charges. The 90/10 Rule no longer permits institutions to count federal aid for ~~veterans~~active-duty ~~and~~ service members and veterans as part of the “10%” side of the ratio. As a result, ~~effective January 1, 2023,~~ TA and VA benefits are included in the “90%” side of the ratio. See the Risk Factor captioned “If one or more of our institutions does not comply with the 90/10 Rule for two consecutive years, it or they will lose eligibility to participate in federal student financial aid programs” for more information.

The final regulations also include other requirements, including: institutions must request and disburse Title IV funds before the end of the fiscal year (or, for institutions operating under the reimbursement method or the heightened cash monitoring method, make disbursements by the end of the fiscal year and report the funds in the “90%” side of the ratio for that fiscal year); institutions are restricted in when and how they can count institutional loans and alternative financing arrangements as non-federal revenue; institutions may, under certain circumstances, include non-federal revenue from non-Title IV programs in their 90/10 calculation; and institutions must notify ED and students in a timely manner if they fail the 90/10 Rule.

32On July 7, 2025, ED issued an interpretative rule that clarified ED’s classification of revenue received by for-profit schools under the 90/10 Rule. The interpretive rule specifies that for-profit schools will be allowed to count non-federal funds generated from programs offered entirely through distance education, if such programs satisfy certain criteria, as non-federal revenue in their 90/10 calculations, and may revise 90/10 Rule calculations for prior fiscal years to include revenue from distance education programs in the “10%” side of the ratio.

Using the applicable 90/10 formula, the following table contains the percentage of cash-basis revenue earned from Title IV program funds:

	2022	2023	2024
	2023	2024	2025
APUS	3189%	89%	89%
RU	7477%	7778%	7877%
HCN	8084%	8485%	85%

Incentive Payment Rule. An institution participating in Title IV programs may not provide any commission, bonus or other incentive payment to any person or entity engaged in any student recruitment, admissions, or financial aid awarding activity based directly or indirectly on success in securing enrollments or federal student financial aid. ED has previously announced that it will calculate institutional liability for noncompliance with the incentive payment rule by calculating the cost to ED of ~~the~~all Title IV funds improperly received by the institution, including the cost to ED of all of the Title IV funds received by the institution over a particular period of time if those funds were obtained through implementation of a policy or practice in which students were recruited in violation of the incentive payment rule. ED may also fine an institution, or take administrative action to limit, suspend, revoke, deny, or terminate an institution’s eligibility to participate in the Title IV programs, if the institution violates the prohibition.

We have designed our employee compensation and third-party contractual arrangements to comply with the incentive payment rule currently in effect. However, because there are ambiguities as to how the rule is interpreted and enforced by ED and because we could make errors in implementation, we can make no assurances that ED would not find deficiencies in our past, current, or future employee compensation plans and relevant third-party contractual arrangements. In addition, in recent years, other postsecondary education institutions have been named as defendants in whistleblower lawsuits, known as “qui tam” cases, brought pursuant to the Federal False Claims Act, alleging that an institution’s compensation practices did not comply with the incentive payment rule. Any such litigation could be costly and could divert management’s time and attention away from the business, regardless of whether a claim has merit. The incentive payment rule also influences how our institutions are able to compensate and motivate their employees.

and because we could make errors in implementation, we can make no assurances that ED would not find deficiencies in our past, current, or future employee compensation plans and relevant third-party contractual arrangements. In addition, in recent years, other postsecondary education institutions have been named as defendants in whistleblower lawsuits, known as “qui tam” cases, brought pursuant to the Federal False Claims Act, alleging that an institution’s compensation practices did not comply with the incentive payment rule. Any such litigation could be costly and could divert management’s time and attention away from the business, regardless of whether a claim has merit. The incentive payment rule also influences how our institutions are able to compensate and motivate their employees.

Cohort Default Rate. To remain eligible to participate in Title IV programs, an educational institution’s student loan cohort default rates must remain below certain levels. Pursuant to HEA requirements, if the cohort default rate for any year exceeds 40% in any single year, or exceeds 30% for three consecutive years, an institution loses eligibility to participate in Title IV programs. If an institution’s cohort default rate is equal to or greater than 30% in any year, it must establish a default prevention task force and develop a default prevention plan with measurable objectives for improving the cohort default rate.

In September ~~2024~~2025, ED released final official cohort default rates for institutions for federal fiscal year ~~2021~~2022, with ED reporting a zero percent cohort default rate for APUS, RU, and HCN. ~~These~~As explained further in “Student Loan Defaults” below, these rates were favorably impacted by regulatory relief provided in connection with the COVID-19 pandemic pursuant to which borrowers with Title IV program student loans were not required to make payments on their federal loans, ~~which~~and no interest accrued on these loans during this period. Interest accrual on forborne federal student loans resumed on September 1, as2023, ~~explained~~and ~~further~~payments inbecame ~~“Student~~due ~~Loan~~beginning ~~Defaults~~October 1, 2023. In connection with these developments, ED implemented a 12-month “on-ramp” ~~below~~to repayment, running from October 1, 2023, to September 30, 2024, during which borrowers were not placed into default for missed payments. The end of COVID-19 pandemic-related student loan forbearance and the 12-month “on-ramp” period may lead to higher default rates in the future.

The final official ED cohort default rates for APUS, RU, and HCN for the federal fiscal years ~~2019~~2020, ~~2020~~2021 and ~~2021~~2022 are as follows:

	2019	2020	2021
	2020	2021	2022
APUS	~~2.4~~0%	0.0%	0.0%
RU	~~1.6~~0%	0.0%	0.0%
HCN	~~1.1~~0%	0.0%	0.0%

Student Loan Defaults. Government policies to minimize the adverse economic impact of the COVID-19 pandemic have artificially lowered our institutions’ cohort default rates, which nevertheless may be higher than otherwise expected as a result of the pandemic. Congress and ED implemented a temporary freeze on student loan payments and interest accruals, which means borrowers were less likely to default on their loans and our institutions’ cohort default rates are lower not because borrowers are making timely repayments but because the government was allowing them not to make payments. In June 2023, the Fiscal Responsibility Act was enacted, ending the freeze on payments and interest accruals. Accordingly, interest accrual on federal student loans resumed on September 1, 2023, and payments became due beginning October 1, 2023. As a result, ED implemented a 12-month “on-ramp” to repayment, running from October 1, 2023, to September 30, 2024, during which borrowers were not considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies for missed payments, which may lead to an increase in defaults and therefore an increase in our institutions’ cohort default rates in the future. See the Risk Factor captioned “Our institutions may lose eligibility to participate in Title IV programs if their student loan default rates are too high, and our future growth could be impaired as a result” for more information.

33Gainful Employment Regulations. Effective July 1, 2024, gainful employment, or GE, regulations, established an accountability framework to determine the Title IV eligibility of GE programs based in part on satisfaction of specified performance levels of two measures defined by GE regulations: the debt-to-earnings rates (which include two rates, the discretionary debt-to-earnings rate and the annual debt-to-earnings rate) and the earnings premium measure. Institutions were required to report by July 1, 2024, initial information relating to these GE measures that covered program and student data from the 2022-2023 and 2023-2024 award years. ED extended this initial reporting deadline to September 30, 2025, and RU, APUS, and HCN reported their initial program and student data by such deadline. RU, APUS, and HCN timely reported their program and student data for award year 2024-2025.

~~for~~On ~~missed~~July ~~payments~~4, ~~which~~2025, ~~may~~the ~~lead~~OBBBA towas ansigned ~~increase~~into inlaw. ~~defaults~~The ~~and~~OBBBA ~~therefore~~establishes an ~~increase~~accountability inframework, ~~our~~effective ~~institutions’~~July ~~cohort~~1, ~~default~~2026, ~~rates~~that ininstitutions ~~the~~must ~~future.~~satisfy ~~See~~at the ~~Risk~~program ~~Factor~~level ~~captioned~~in ~~“Our~~order ~~institutions~~for ~~may~~students ~~lose~~in ~~eligibility~~the program to ~~participate~~continue into ~~Title~~receive IVDirect ~~programs~~Loans ifrequiring ~~their~~that ~~student~~an ~~loan~~undergraduate ~~default~~or ~~rates~~graduate ~~are~~or ~~too~~professional ~~high~~program be ineligible for Direct Loans if, ~~and~~in ~~our~~two ~~future~~out ~~growth~~of ~~could~~three beconsecutive ~~impaired~~years, asthe median earnings of a ~~result”~~cohort ~~for~~of ~~more~~program ~~information.~~completers are less than the median earnings of working adults

Gainful Employment Regulations. Pursuant to new gainful employment, or GE, regulations that took effect July 1, 2024, ED will determine the Title IV eligibility of GE programs based in part on satisfaction of specified performance levels of two measures defined by GE regulations: the debt-to-earnings rates (which include two rates, the discretionary debt-to-earnings rate and the annual debt-to-earnings rate) and the earnings premium measure. 35

EDaged ~~previously~~25-34 ~~released~~with only a ~~data~~high ~~set,~~school ~~referred~~diploma tofor asundergraduate ~~the~~program ~~Program Performance Data~~completers, or ~~the~~a ~~PPD,~~bachelor’s ~~that~~degree ~~includes calculations of the two metrics~~ for ~~certain~~graduate ~~programs.~~or ~~The~~professional ~~methodology~~program EDcompleters, ~~used~~respectively, toeither ~~produce~~in the ~~PPD~~state ~~differs~~where ~~from~~ the ~~methodology~~institution ~~that~~is ~~will~~located ~~be used under the final GE regulations~~or, ~~primarily~~if ~~due~~fewer tothan ~~data~~50% ~~limitations. However, out~~ of ~~the~~students ~~30 RU programs, 47 APUS programs, and three HCN programs (including one no longer offered~~ at ~~HCN)~~the ~~that~~institution EDreside ~~assessed~~ in the ~~PPD~~institution’s state, ~~six current RU programs and three APUS programs failed one or both of~~ the ~~new~~national ~~measures~~average. ~~The~~If ~~six~~a RUprogram ~~programs~~fails ~~failing in~~ the ~~PPD~~earnings ~~represent~~test ~~5.0% of total student enrollment~~ for ~~the~~one ~~three months ended December 31~~year, ~~2024.~~institutions ~~The~~must ~~three~~provide ~~APUS~~students ~~programs~~with ~~failing~~a inwarning that the ~~PPD~~program ~~represent~~is ~~2.2%~~at risk of ~~total~~losing ~~net~~Direct ~~course~~Loan ~~registrations for the three months ended December 31, 2024~~eligibility.

~~Programs~~On ~~that~~December ~~fail~~8, to2025, ~~achieve~~ED convened the ~~specified~~Accountability ~~performance~~in ~~levels~~Higher ofEducation ~~the~~and GEAccess ~~measures~~through inDemand-driven ~~two~~Workforce ofPell ~~any~~Committee, ~~three~~or ~~successive~~AHEAD, ~~years~~and ~~for~~initiated ~~which~~ the ~~debt-to-earnings~~negotiated ~~rates~~rulemaking orprocess for the ~~earnings~~OBBBA ~~premium~~accountability ~~measure~~framework. ~~are~~On ~~calculated~~January ~~will~~9, ~~lose~~2026, ~~access~~AHEAD toreached ~~Title~~consensus IVon ~~funding.~~proposed ~~Institutions~~modifications ~~will~~to ~~generally~~GE beregulations ~~required~~that towould ~~report~~eliminate ~~certain~~debt-to-earnings ~~information~~rates, ~~used~~change tostudent ~~calculate~~warning ~~these~~requirements, ~~measures~~limit tothe EDconsequences byfor ~~July~~failing 31the ofearnings ~~each~~premium ~~year~~measure, ~~provided~~and ~~that~~add an appeal process for ~~2024,~~programs EDthat ~~has~~lose ~~extended~~Title ~~the~~IV ~~deadline~~eligibility ~~numerous~~under ~~times~~this framework. ~~Most~~The ~~recently,~~consensus inlanguage ~~February~~also ~~2025,~~maintains EDthe ~~announced~~current regulatory requirement that ~~all~~ED ~~reporting~~host ~~will~~a bewebsite ~~due~~that ~~September~~provides 30program-level data, ~~2025~~including, ~~and~~but ~~that~~not itlimited ~~does~~to, ~~not~~median ~~anticipate~~loan ~~any~~debt ~~further~~and ~~extensions~~median earnings. InFurther, ~~addition~~under the consensus language, EDan ~~stated~~institution ~~that~~would itlose ~~does~~Pell ~~not~~grant ~~plan~~eligibility tofor ~~produce~~a ~~any~~program GEif ~~data~~at ~~prior~~least tohalf of the ~~September~~institution’s ~~30,~~Title ~~2025,~~IV ~~deadline~~recipients ~~and~~or ~~confirmed~~half ~~that~~of itan ~~will~~institution’s ~~not~~Title ~~take~~IV ~~enforcement~~funds orcome ~~other~~from ~~punitive~~failing ~~actions~~programs. ~~against~~On ~~institutions~~January ~~that~~30, ~~have~~2026, ~~not~~ED ~~yet~~published ~~completed~~proposed ~~their~~regulations ~~required~~to ~~reporting~~implement the AHEAD consensus language. ~~See~~The proposed regulations were subject to the ~~Risk~~notice ~~Factor~~and ~~captioned~~comment ~~“ED’s~~rulemaking ~~new~~process ~~gainful~~which ~~employment~~ended ~~requirements~~on ~~could~~March ~~materially~~2, ~~and~~2026. ~~adversely~~As ~~affect~~such, ~~our~~the ~~business”~~final ~~for~~regulations ~~more~~may ~~information~~differ from those initially proposed.

In connection with the negotiated rulemaking, in December 2025, ED issued updated institutional program performance data, or PPD, that includes calculations of the earnings premium measure under the OBBBA accountability framework for certain programs. These data are for informational purposes only and do not reflect the final data that will be used to determine whether a program will pass the earnings premium measure, as ED used a different cohort of students than will be used to calculate the actual earning premium measures and many programs’ earnings data were suppressed due to data privacy limitations. However, out of the 67 APUS programs, 43 RU programs, and two HCN programs that ED assessed in the updated PPD, one APUS program failed the OBBBA earnings premium measure, representing less than 1% of total net course registrations for the three months ended December 31, 2025, compared to five APUS programs and six RU programs failing the GE debt-to-earnings test, representing 2.60% of total APUS net course registrations and 4.91% of total RU student enrollment, respectively, for the three months ended December 31, 2025.

The current GE regulations will remain in effect until ED publishes a final rule implementing the proposed OBBBA regulatory changes and that final rule goes into effect. Under current GE regulations, beginning July 1, 2026, institutions must issue student warnings to current and prospective students if ED notifies the institution that the GE program could become ineligible based on its final debt to earnings rates or earnings premium measure for the next award year for which the measures are calculated. Prospective students would need to review and acknowledge receipt of these warnings on ED’s program information website before we can disburse any Title IV student aid funds to the student. This requirement would be changed by the anticipated proposed rules relating to the OBBBA.

Third-Party Servicers. ED regulations permit an institution to enter into a written contract with a third-party servicer for the administration of any aspect of the institution’s participation in Title IV programs. Our institutions utilize third-party servicers for some services and in the future may consider using third-party servicers for other functions that are currently managed directly by our institutions. Third-party servicers must, among other obligations, comply with Title IV requirements and be jointly and severally liable with the institution to ED for any violation by the servicer of any Title IV provision. An institution must report to ED new contracts with or any significant modifications to contracts with third-party servicers and other matters related to third-party servicers. If any third-party servicer engaged by one of our institutions does not comply with applicable statutes and regulations, our institution may be liable for its actions, and our institution could lose its eligibility to participate in Title IV programs.

Title IV Return of Funds. When a student withdraws, an institution must return unearned Title IV program funds to ED in a timely manner. An institution must first determine the amount of funds that a student “earned” before withdrawal. If the student withdraws during the first 60% of any period of enrollment or payment period, the amount of Title IV program funds that the student earned is equal to a pro rata portion of the funds for which the student would otherwise be eligible. If the student withdraws after the 60% threshold, then the student has earned 100% of the Title IV program funds. The institution must return to the appropriate Title IV programs, in a specified order, the lesser of (i) the unearned Title IV program funds or (ii) the institutional charges incurred by the student for the period multiplied by the percentage of unearned Title IV program funds. An institution must return the funds no later than 45 days after the date of the institution’s determination that a student withdrew.

If 5% or more of such returns were not timely made, the institution may be required to submit a letter of credit in favor of ED equal to 25% of the amount of unearned Title IV funds the institution was required to return for its most recently completed fiscal year. If ED determines that one of our institutions has repeatedly failed to comply with ED regulations, it may take adverse action against the institution on the basis of the repeated finding or may find that the institution has failed to demonstrate administrative capability, as described above. As described in Compliance with Regulatory Standards and Effect of Regulatory Violations – Compliance Reviews, in January 2022, HCN received a program review report from ED that included a finding related to return of Title IV funds calculations that were not properly calculated. In connection with that finding, HCN was required to conduct a full file review and have the review tested by an independent auditor. In July 2022, ED issued a final program review determination with respect to all findings, resulting in total liabilities of approximately $12,000.

Substantial Misrepresentation. Under the HEA and its implementing regulations, ED may take action against an institution in the event of substantial misrepresentation by the institution concerning the nature of its educational programs, its

financial charges, or the employability of its graduates. As part of the 2022 Borrower Defense Regulations, ED modified the substantial misrepresentation rule to explicitly include certain “omissions of fact” as a basis for a misrepresentation claim or borrower defense to repayment, or BDTR, claim. If ED determines that an institution has engaged in substantial misrepresentation regarding the nature of its education program, its financial charges, or the employability of its graduates, ED may: (i) if the institution is provisionally certified, as some of our institutions currently are, revoke an institution’s program participation agreement or impose limitations on its participation in Title IV programs; (ii) deny participation applications made on behalf of the institution; or (iii) initiate a proceeding against the institution to fine the institution or to limit, suspend, or terminate the institution’s participation in Title IV programs.

The Clery Act. Our institutions must comply with certain campus safety and security reporting requirements as well as other requirements in the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, or the Clery Act. The Clery Act requires an institution, among other things, to report to ED and disclose in an annual security report, for the three most recent calendar years, statistics concerning the number of certain crimes that occurred on or within the institution’s “Clery geography,” which comprises an institution’s campus and non-campus buildings and property, public property on or adjacent to and accessible from the campus, and in some cases areas within the patrol jurisdiction of the campus police or security department, and to publish certain policies and procedures related to campus safety. A failure to comply with the Clery Act could result in our institutions being fined or having their eligibility to participate in Title IV programs limited, suspended, or terminated, could lead to litigation, or could harm our institutions’ reputation, each of which could, in turn, adversely affect our institutions’ enrollments and revenue and have a material effect on our business.

Borrower Defenses. Under the HEA, ED is authorized to specify in regulations which acts or omissions of an institution of higher education a borrower may assert as a BDTR of a loan under the Direct Loan Program, or a Direct Loan. ED may initiate a proceeding to collect from an institution the amount of relief resulting from a borrower defense claim. Prior to 2016, ED’s regulations permitted a borrower to assert a BDTR of a Direct Loan if the institution’s acts or omissions give rise to a cause of action against the institution under state law. In November 2016, ED published the 2016 Borrower Defense Regulations, which address, among other matters, which acts or omissions of an institution of higher education a student borrower or group of borrowers may assert as a defense to repayment of a Direct Loan. For Direct Loans first disbursed on or after July 1, 2017, the 2016 Borrower Defense Regulations created a new federal standard for BDTR of Direct Loans, new limitation periods for such claims, and new processes for resolution of such claims. The 2016 Borrower Defense Regulations were in effect from July 1, 2017, until July 1, 2020, when new BDTR regulations became effective. In September 2019, ED published the 2019 Borrower Defense Regulations, which, among other things, modify the standard for BDTR of Direct Loans made on or after July 1, 2020, the limitation periods for such claims, and the processes for resolution of such claims. The 2016 Borrower Defense Regulations continue to apply to all Direct Loans made on or after July 1, 2017, and before July 1, 2020, with certain exceptions pursuant to the 2019 Borrower Defense Regulations. The 2019 Borrower Defense Regulations apply to all Direct Loans made on or after July 1, 2020, and before July 1, 2023, when new BDTR regulations became effective.

In March 2021, ED announced a revised approach for determining relief for borrowers who successfully assert borrower relief claims. Under this new approach, a borrower will receive full loan relief when evidence shows that the institution engaged in certain misconduct. This policy rescinded the prior administration’s formula that generally granted only partial loan relief for borrower defense claims. Under the 2016 Borrower Defense Regulations and the 2019 Borrower Defense Regulations, ED may initiate a separate proceeding to collect from an institution the amount of relief granted based on a BDTR claim.

On November 1, 2022, ED published final regulations with an effective date of July 1, 2023, to address BDTR, loan discharge, pre-dispute arbitration and class-action waivers, among other issues, or the 2022 Borrower Defense Regulations. The 2022 Borrower Defense Regulations will create a single standard and streamlined process for relief that will: (i) apply to all future and pending BDTR claims as of July 1, 2023 instead of standards varying based on the date of the borrower’s first loan disbursement; (ii) allow students to assert borrower defenses related to Direct Consolidation Loans; (iii) define what kinds of misconduct could lead to borrower defense discharges (substantial misrepresentation, substantial omission of fact, breach of contract, aggressive and deceptive recruitment, and certain judgments or final ED actions); (iv) establish a reconsideration process for borrowers whose claims are not approved for a full discharge; (v) create a process for forming groups of borrowers and adjudicating claims based on the common facts of those group claims; and (vi) provide a clear timeline for adjudication of group and individual claims. The 2022 Borrower Defense Regulations indicate that ED will hold colleges accountable for the cost of discharges, including by establishing a recoupment process separate from the approval of BDTR claims and making a recoupment determination based on the standards in place at the time the loan was first disbursed. The effective date of the 2022 Borrower Defense Regulations is currently enjoined nationwide by court order, which means ED currently cannot apply the 2022 Borrower Defense Regulations to any institution.

As a result of the 2022 Borrower Defense Regulations injunction, ED announced that while it will not adjudicate any borrower defense applications under the 2022 Borrower Defense Regulations unless and until the effective date is reinstated, it will continue to adjudicate borrower defense applications under the 2016 Borrower Regulations and 2019 Borrower Defense Regulations if required pursuant to a court ordered settlement. In 2022, ED joined a class settlement agreement that would result in a blanket grant of automatic, presumptive relief for all BDTR applications filed by students at certain institutions through June 22, 2022, but our institutions were not included in the blanket grant of relief. The class settlement agreement provided certain expedited review of borrower defense claims related to institutions excluded from the automatic relief list, as well as for borrowers who applied during the period after execution of the settlement and before final approval. Borrowers had to have submitted an application by November 15, 2022, in order to receive expedited review, and ED confirmed it would adjudicate all such applications under the 2016 Borrower Defense Regulations.

In December 2023, RU received from ED 338 BDTR claims, all of which had submission dates between June 23, 2022, and November 15, 2022, for students attending RU between 2000 and 2022, seeking in the aggregate a discharge of approximately $6.1 million in loans. In December 2023, HCN received from ED 77 BDTR claims, all of which had submission dates between June 23, 2022, and November 15, 2022, for students attending HCN between 2007 and 2022, seeking in the aggregate a discharge of approximately $1.4 million in loans. In September 2024, APUS received from ED 408 BDTR claims, all of which had submission dates between June 23, 2022, and November 15, 2022, for students attending APUS between 2006 and 2021, seeking in the aggregate a discharge of approximately $6.6 million in loans. Each of RU, HCN, and APUS disputes the validity of these claims and has filed responses to them with ED. We are unable to predict whether ED will grant BDTR relief for the claims, or if so, whether it will seek recoupment from RU, HCN and/or APUS. Refer to the Risk Factor captioned “ED rules related to BDTR claims may create significant liability that could have an adverse effect on our business” for additional information.

Closed School Loan Discharge. The 2019 Borrower Defense Regulations modified ED’s requirements with respect to the circumstances under which a borrower is eligible for a loan discharge if an institution or location closes. For example, the 2016 Borrower Defense Regulations previously provided for an automatic loan discharge under certain circumstances, but the 2019 Borrower Defense Regulations eliminated the automatic loan discharge for schools closing on or after July 1, 2020. Based on the automatic loan discharge rules, ED found RU responsible for $168,630 in closed school loan discharges as a result of campus consolidations in North Dakota in 2015 and in Wisconsin in 2016; the liability was reduced on appeal to $77,569. RU may also face closed school discharge liabilities as a result of the 2021 consolidation of two Florida campuses, the 2022 consolidation of two Minnesota campuses, and the planned closure of two Wisconsin campuses. The 2022 Borrower Defense Regulations included closed school loan discharge provisions that would provide for automatic discharges to any borrower who was enrolled within 180 days prior to a school’s closure and who did not complete their education at the school or through an approved teach-out agreement at another school within one year after the closure of their original school. The regulations would shorten the previous period for automatic discharge so borrowers do not default on their loans after a closure of their school. The closed school loan discharge provisions of the 2022 Borrower Defense Regulations are currently enjoined nationwide by court order, which means ED currently cannot apply the closed school loan discharge provisions of the 2022 Borrower Defense Regulations to any institution.

Dispute Resolution. The 2016 Borrower Defense Regulations, which apply to all Direct Loans made on or after July 1, 2017, and before July 1, 2020, prohibit requiring students to initially engage in an institutions’ internal complaint processes, prohibit pre-dispute arbitration agreements, and class action lawsuit waivers, and require notification to ED of arbitration filings and awards, for claims that may form the basis for a BDTR. The 2019 Borrower Defense Regulations, which apply to all Direct Loans made on or after July 1, 2020, and before July 1, 2023, generally remove these prohibitions but require institutions whose students must enter into pre-dispute arbitration agreements or class action waivers to disclose publicly those requirements, and prohibit requiring a student to participate in arbitration or any internal dispute resolution process prior to filing a BDTR application with ED. The 2022 Borrower Defense Regulations, which apply to all Direct Loans made on or after July 1, 2023, and to all BDTR claims pending as of that date, prohibit institutions from requiring borrowers to sign mandatory pre-dispute arbitration agreements or class action waivers for claims related to the making of a Federal Direct Loan or the provision of educational services for which the loan was obtained. However, the effective date of the 2022 Borrower Defense Regulations is currently enjoined nationwide by court order, which means ED currently cannot apply the 2022 Borrower Defense Regulations to any institution.

Other Department of Education Regulation

Privacy of Student Personal Information and Records. The Family Educational Rights and Privacy Act of 1974, or FERPA, and ED’s regulations implementing FERPA require education institutions to protect the privacy of students’ education records by, among other things, limiting disclosure of a student’s personally identifiable information without prior written consent. If an institution fails to comply with FERPA, ED may require corrective actions or terminate eligibility to participate in

~~Title~~take IVadverse ~~programs.~~action Inagainst ~~addition, education institutions engaged in financial activities such as~~ the granting of student loans are obligated to safeguard student information pursuant to the Gramm-Leach-Bliley Act, or GLBA, and implementing regulations, which among other things, requires reasonable security practices to protect personally identifiable financial information of students, parents, or other individuals in a customer relationship with the institution. ~~Failure~~on ~~to comply with~~ the ~~applicable~~basis ~~GLBA requirements may result in FTC enforcement, which could include the imposition~~ of ~~conditions, penalties, monitoring, and oversight. Institutions are also subject to~~ the ~~FTC’s~~repeated ~~general~~finding ~~deceptive and unfair practices jurisdiction of Section 5 of the FTC Act for processing student information. FTC enforcement focuses primarily on: (i) collecting, using, sharing,~~ or ~~retaining~~may ~~personal~~find ~~information inconsistent with representations, commitments, and promises in privacy policies and other public statements; (ii) privacy policies~~ that ~~do not adequately inform consumers about actual practices; and (iii) failing to reasonably protect~~ the ~~security,~~institution ~~privacy,~~has ~~and~~failed ~~confidentiality of personal information. Institutions must also comply with the FTC Red Flags Rule, a requirement designed~~ to ~~identify~~demonstrate ~~and~~administrative mitigate identity theft for certain student accounts. States can also bring similar enforcement actions under so called “mini-FTC Acts” as well as other applicable privacy and security laws. For examplecapability, ~~the California Consumer Privacy Act, or the CCPA,~~ as ~~amended~~described by the California Privacy Rights Act, or CPRA, and implementing regulations impose disclosure and notice obligations on institutions and provides a broad array of consumer rights relating to California residents and their personal information, including among others, the right to access personal information, the right to opt out of sales of personal information, the right to correct or delete personal information, and the right to limit certain disclosures of personal informationabove. The CCPA has the potential for significant civil penalties for failing to comply as well as a private right of action and statutory damages for data breaches that are the result of unreasonable security. Other comprehensive state privacy laws that our institutions may be subject to with varying requirements also came into effect in 2023. Our collection of personal information relating to individuals in the European Union, or EU, may implicate the EU’s comprehensive General Data Protection Regulation, or GDPR. Non-compliance with the GDPR could result in a fine for certain activities of up to 20 million Euros or 4% of an organization’s global annual revenue, whichever is higher, per violation.

~~Accessibility~~Substantial ~~for Students with Disabilities~~Misrepresentation. ~~Section~~Under ~~504 of~~ the ~~Rehabilitation~~HEA ~~Act~~and ofits ~~1973,~~implementing ~~or Section 504~~regulations, ~~prohibits discrimination against a person with a disability by any organization that receives federal financial assistance, which includes us.~~ ED’s ~~Office~~may ~~for~~take ~~Civil~~action ~~Rights,~~against oran ~~OCR,~~institution ~~which~~in ~~enforces Section 504, together with~~ the ~~Department~~event of ~~Justice,~~substantial ~~has~~misrepresentation ~~asserted~~by ~~that~~the ~~requiring~~institution concerning the ~~use~~nature of ~~technology~~its ineducational aprograms, ~~classroom~~its ~~environment~~financial ~~when such technology is inaccessible to individuals with disabilities violates Section 504~~charges, ~~unless those individuals are provided accommodations~~ or ~~modifications that permit them to receive all~~ the ~~educational~~employability ~~benefits~~of ~~provided~~its ~~by the technology in an equally effective and integrated manner~~graduates. InAs ~~recent~~part ~~years,~~of ~~OCR~~the ~~has~~2022 ~~taken~~Borrower ~~enforcement~~Defense ~~action against several institutions of higher education~~Regulations, ~~including~~as ~~primarily~~defined ~~online institutions~~below, ~~after~~ED ~~determining~~modified ~~that~~the ~~their~~substantial ~~websites~~misrepresentation ~~and~~rule ~~online~~to ~~learning~~explicitly ~~management~~include ~~platforms~~certain ~~were~~“omissions ~~not~~of ~~accessible~~fact” toas ~~persons with~~ a ~~disability.~~basis Infor ~~2022, OCR initiated~~ a ~~compliance~~misrepresentation ~~review~~claim ofor ~~APUS’s~~borrower ~~learning~~defense ~~management~~to ~~system~~repayment, ~~and~~or ~~courses. In August 2024~~BDTR, ~~OCR~~claim. ~~identified~~If weED ~~were~~determines ~~out~~that ofan ~~compliance~~institution ~~with~~has ~~certain~~engaged ~~accessibility~~in ~~requirements~~substantial ~~for~~misrepresentation ~~people~~regarding ~~with~~the ~~disabilities~~nature ~~for~~of ~~ten~~its ~~courses.~~education ~~Currently~~program, ~~APUS~~its isfinancial ~~cooperating~~charges, ~~with~~or ~~OCR~~the onemployability aof ~~resolution~~its ~~to bring APUS into compliance. At this time~~graduates, weED ~~cannot~~may: ~~predict~~(i) ~~when~~if the ~~compliance~~institution ~~review~~is ~~will~~provisionally ~~be completed~~certified, ~~additional~~as ~~costs~~some ~~associated~~of ~~with~~our ~~compliance,~~institutions ~~whether~~currently ~~there will be any further findings~~are, orrevoke ~~whether~~an ~~OCR~~institution’s ~~will~~program ~~place~~participation ~~any~~agreement ~~liability~~ or ~~other~~impose limitations on ~~APUS~~its asparticipation ain ~~result~~Title ofIV ~~the~~programs; ~~compliance~~(ii) ~~review.~~deny Anparticipation ~~institution~~applications ~~that~~made ~~does~~on ~~not~~behalf ~~come~~of ~~into~~the ~~compliance~~institution; ~~with~~or ~~Section~~(iii) ~~504~~initiate ~~could~~a ~~lose~~proceeding ~~access~~against ~~to federal funding, including~~ the ~~ability~~institution to ~~participate~~fine in the ~~Title~~institution IVor ~~programs~~to ~~and~~limit, ~~TA.~~suspend, ~~See~~or ~~the~~terminate ~~Risk Factor captioned “Enforcement of laws related to~~ the ~~accessibility~~institution’s ofparticipation ~~technology continues to evolve, which could result~~ in ~~increased~~Title ~~information~~IV ~~technology development costs and compliance risks” for more information~~programs.

~~Title~~The IXClery Act. ~~Title~~Our IXinstitutions ofmust ~~the~~comply ~~Education~~with ~~Amendments~~certain ofcampus ~~1972,~~safety orand ~~Title~~security ~~IX,~~reporting ~~prohibits~~requirements ~~discrimination~~as onwell ~~the~~as ~~basis~~other ofrequirements ~~sex~~ in ~~education~~the ~~programs~~Jeanne ~~that~~Clery ~~receive~~Disclosure ~~funding~~of ~~from~~Campus ~~the~~Security ~~federal~~Policy ~~government.~~and EDCampus ~~regulations~~Crime ~~effective~~Statistics ~~August 2020~~Act, or the ~~2020~~Clery ~~Rule,~~Act. ~~define~~The ~~what~~Clery ~~constitutes~~Act ~~sexual~~requires ~~harassment~~an ~~for~~institution, ~~purposes~~among ofother ~~Title IX in the administrative enforcement context~~things, ~~describe what actions trigger an institution’s obligation~~ to ~~respond~~report to ~~incidents~~ED ~~of alleged sexual harassment,~~ and ~~specify~~disclose ~~how~~in an ~~institution~~annual ~~must~~security ~~respond to allegations of sexual harassment. In April 2024~~report, EDfor ~~released~~the ~~new~~three ~~regulations~~most ~~that~~recent ~~significantly~~calendar ~~revise how schools~~years, ~~including~~statistics ~~higher~~concerning ~~education~~the ~~institutions,~~number ~~must address cases involving sex-based discrimination, including cases~~ of ~~sexual~~certain ~~harassment,~~crimes ~~sex-based~~that ~~harassment,~~occurred ~~and assault occurring~~ on or ~~after~~within the ~~August~~institution’s 1,“Clery ~~2024~~geography,” ~~effective~~which ~~date.~~comprises ~~The~~an ~~new~~institution’s ~~regulations~~campus ~~also~~and ~~explicitly~~non-campus ~~include~~buildings ~~protections against discrimination based on sexual orientation, gender identity,~~ and ~~sex characteristics. In addition~~property, ~~the~~public ~~new~~property ~~regulations~~on ~~update protections against discrimination because of pregnancy, related conditions,~~ or ~~terminations~~adjacent ofto ~~pregnancy.~~and ~~Multiple~~accessible ~~states~~from ~~challenged~~ the ~~new regulations~~campus, and ~~federal district courts granted preliminary injunctions~~ in 26some ~~states:~~cases ~~Alabama,~~areas ~~Alaska,~~within ~~Arkansas,~~the ~~Florida,~~patrol ~~Georgia,~~jurisdiction ~~Idaho,~~of ~~Indiana,~~the ~~Iowa,~~campus ~~Kansas,~~police ~~Kentucky,~~or ~~Louisiana,~~security ~~Mississippi~~department, ~~Missouri,~~and ~~Montana,~~to ~~Nebraska,~~publish ~~North~~certain ~~Dakota,~~policies ~~Ohio,~~and ~~Oklahoma,~~procedures ~~South~~related ~~Carolina,~~to ~~South~~campus ~~Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming~~safety. InA ~~some~~failure ~~instances,~~to ~~courts~~comply ~~expanded~~with the ~~injunction~~Clery toAct ~~named~~could ~~schools,~~result ~~regardless~~in ofour ~~where~~institutions ~~the~~being ~~schools~~fined ~~are~~or ~~located;~~having ~~APUS~~their ~~was~~eligibility ~~named~~to ~~among~~participate ~~nearly 700 such schools~~ in aTitle ~~July~~IV ~~2024~~programs ~~list.~~limited, ~~Kansas~~suspended, v.or ~~U.S. Dep’t of Educ.~~terminated, ~~No.~~could ~~5:24-cv-4041~~lead ~~(D.~~to ~~Kan. 2024). Except where enjoined~~litigation, ~~the~~or ~~new~~could ~~regulations~~harm ~~otherwise~~our ~~became~~institutions’ ~~effective on August 1~~reputation, ~~2024.~~each Inof ~~January~~which ~~2025~~could, ain ~~federal district court granted summary judgment against ED~~turn, ~~concluding~~adversely ~~that~~affect ~~the~~our ~~new~~institutions’ ~~regulations~~enrollments ~~were~~and ~~unlawful~~revenue and ~~permanently~~have ~~vacating the rule nationwide. Tennessee v. Cardona, No. 2:24-cv-072 (E.D. Ky. 2025). In February 2025, OCR issued~~ a ~~Dear~~material ~~Colleague~~effect ~~Letter~~on ~~confirming~~our ~~both that it will enforce Title IX under the 2020~~ business.

Borrower Defenses. Under the HEA, ED is authorized to specify in regulations which acts or omissions of an institution of higher education a borrower may assert as a BDTR of a loan under the Direct Loan Program, or a Direct Loan. ED may initiate a proceeding to collect from an institution the amount of relief resulting from a borrower defense claim. Prior to 2016, ED’s regulations permitted a borrower to assert a BDTR of a Direct Loan if the institution’s acts or omissions give rise to a cause of action against the institution under state law. In November 2016, ED published modifications to regulations that set forth, among other matters, the acts or omissions of an institution of higher education a student borrower or group of borrowers may assert as a defense to repayment of a Direct Loan, or the 2016 Borrower Defense Regulations. The 2016 Borrower Defense Regulations were in effect from July 1, 2017, until July 1, 2020. For Direct Loans first disbursed on or after July 1, 2017, the 2016 Borrower Defense Regulations created a new federal standard for BDTR of Direct Loans, new limitation periods for such claims, and new processes for resolution of such claims. In September 2019, ED published the 2019 Borrower Defense Regulations, which, among other things, modify the standard for BDTR of Direct Loans made on or after July 1, 2020, the limitation periods for such claims, and the processes for resolution of such claims. The 2016 Borrower Defense Regulations continue to apply to all Direct Loans made on or after July 1, 2017, and before July 1, 2020, with certain exceptions pursuant to the 2019 Borrower Defense Regulations. The 2019 Borrower Defense Regulations apply to all Direct Loans made on or after July 1, 2020, and before July 1, 2023.

In March 2021, ED announced a revised approach for determining relief for borrowers who successfully assert borrower relief claims. Under this approach, a borrower will receive full loan relief when evidence shows that the institution engaged in certain misconduct. This policy rescinded the prior administration’s formula that generally granted only partial loan relief for borrower defense claims. Under the 2016 Borrower Defense Regulations and the 2019 Borrower Defense Regulations, ED may initiate a separate proceeding to collect from an institution the amount of relief granted based on a BDTR claim.

On November 1, 2022, ED published final regulations with an effective date of July 1, 2023, to address BDTR, loan discharge, pre-dispute arbitration and class-action waivers, among other matters, or the 2022 Borrower Defense Regulations. The 2022 Borrower Defense Regulations created a single standard and streamlined process for relief that will: (i) apply to all future and pending BDTR claims as of July 1, 2023 instead of standards varying based on the date of the borrower’s first loan disbursement; (ii) allow students to assert borrower defenses related to Direct Consolidation Loans; (iii) define what kinds of misconduct could lead to borrower defense discharges (e.g., substantial misrepresentation, substantial omission of fact, breach of contract, aggressive and deceptive recruitment, and certain judgments or final ED actions); (iv) establish a reconsideration process for borrowers whose claims are not approved for a full discharge; (v) create a process for forming groups of borrowers and adjudicating claims based on the common facts of those group claims; and (vi) provide a clear timeline for adjudication of group and individual claims. The 2022 Borrower Defense Regulations indicate that ED will hold institutions accountable for the cost of discharges, including by establishing a recoupment process separate from the approval of BDTR claims and making a recoupment determination based on the standards in place at the time the loan was first disbursed. The OBBBA delays

~~Rule~~implementation ~~and~~of ~~that~~the ~~institutions~~2022 ~~with~~Borrower ~~open~~Defense ~~investigations~~Regulations ~~initiated~~until ~~under~~July ~~the~~1, ~~new~~2035. ~~regulations~~Accordingly, ~~should~~BDTR ~~reevaluate~~regulations ~~such~~that ~~investigations~~were ~~for~~in ~~consistency~~effect ~~with~~on ~~the~~July 1, 2020, ~~Rule~~have been reinstated.

~~Distance~~In ~~Education.~~December ~~Regulations~~2023, ~~that~~RU ~~were~~received ~~effective~~from ~~July~~ED ~~2021~~338 ~~provide~~BDTR ~~institutions~~claims, ~~additional~~all ~~flexibility~~of inwhich ~~offering~~had ~~distance~~submission ~~education~~dates between June 23, 2022, and ~~competency-based~~November ~~education~~15, ~~programs.~~2022, ~~Definitions~~for students attending RU between 2000 and 2022, seeking in the ~~rule~~aggregate ~~clarify~~a ~~the~~discharge ~~instructional~~of ~~requirements~~approximately ~~that~~$6.1 ~~distance~~million ~~education~~in ~~programs~~loans. ~~must~~In ~~abide~~December in2023, ~~order~~HCN toreceived ~~remain~~from ~~eligible~~ED 77 BDTR claims, all of which had submission dates between June 23, 2022, and November 15, 2022, for ~~Title~~students IVattending ~~disbursements.~~HCN ~~Failure~~between to2007 ~~comply~~and ~~with~~2022, ~~these~~seeking ~~standards~~in ~~could~~the ~~lead~~aggregate toa ~~adverse~~discharge ~~actions~~of byapproximately ED$1.4 million in loans. In ~~addition~~September 2024, APUS received from ED 408 BDTR claims, all of which had submission dates between June 23, 2022, and November 15, 2022, for students attending APUS between 2006 and 2021, seeking in ~~January~~the aggregate a discharge of approximately $6.6 million in loans. In 2025, RU received from ED ~~published~~54 ~~new~~additional ~~regulations~~BDTR ~~related~~claims, toall ~~distance~~of ~~education~~which had submission dates between August 5, 2025 and ~~Return~~November to14, ~~Title~~2025, IVfor students attending RU between 1989 and 2019, orseeking ~~R2T4~~in the aggregate a discharge of approximately $1.1 million in loans. As of March 11, ~~rules~~2026, APUS received from ED 98 BDTR claims, all of which ~~govern~~had ansubmission ~~institution’s~~dates ~~obligations~~between November to17, ~~return~~2022, ~~Title~~and IVOctober ~~funds~~10, to2023, EDfor ~~when~~students attending APUS between 2009 and 2020, seeking in the aggregate a ~~student~~discharge ~~withdraws~~of approximately $1.8 ~~These~~million ~~changes~~in ~~related~~loans. toAs ~~distance~~of ~~education~~March 11, ~~when~~2026, ~~effective~~RU received from ED 83 additional BDTR claims, ~~will~~all ~~require~~of ~~institutions~~which tohad ~~report~~submission ~~student~~dates ~~enrollment~~between November 2022 and October 2023, for students attending RU between 2007 and 2026, seeking in ~~distance~~the ~~education~~aggregate a discharge of approximately $1.6 million in ~~accordance~~loans. ~~with~~As ~~procedures~~of ~~established~~March by11, 2026, HCN received from ED 11 BDTR claims, all of which had submission dates between January 7, 2023, and ~~changes~~September ~~related~~8, to2023, ~~R2T4~~for ~~rules~~students ~~address~~attending ~~circumstances~~HCN ~~constituting~~between a2008 ~~withdrawal~~and 2020, ~~codify~~seeking ~~longstanding~~in ~~policies~~the aggregate a discharge of approximately $0.2 million in loans. Each of APUS, ~~and~~RU, ~~modify~~HCN ~~certain~~disputes ~~types~~the validity of ~~R2T4~~these ~~calculations~~claims and has filed responses to them with ED. ~~The~~We ~~new~~are ~~regulations~~unable ~~become~~to ~~effective~~predict ~~July~~whether 1ED will grant BDTR relief for the claims, ~~2026~~or if so, whether it will seek recoupment from APUS, RU, and/or HCN. Refer to the Risk Factor captioned “ED rules related to BDTR claims may create significant liability that could have an adverse effect on our business and results of operations” for additional information.

Closed School Loan Discharge. The 2019 Borrower Defense Regulations modified ED’s requirements with respect to the circumstances under which a borrower is eligible for a loan discharge if an institution or location closes. For example, the 2016 Borrower Defense Regulations previously provided for an automatic loan discharge under certain circumstances, but the 2019 Borrower Defense Regulations eliminated the automatic loan discharge for schools closing on or after July 1, 2020. Based on automatic loan discharge rules, RU was negatively affected in 2020 by two previous campus mergers, one in North Dakota in 2015, and one in Wisconsin in 2016. The result were liabilities of $168,630, which was reduced to $77,569 after reconsideration appeals were submitted by RU to ED. RU may also face closed school discharge liabilities as a result of the 2021 consolidation of two Florida campuses, the 2022 consolidation of two Minnesota campuses, the closure of one Wisconsin campus in 2025, and the planned closure of another Wisconsin campus in 2026. The 2022 Borrower Defense Regulations include closed school loan discharge provisions that will provide for automatic discharges to any borrower who was enrolled within 180 days prior to a school’s closure and who did not complete their education at the school or through an approved teach-out agreement at another school within one year after the closure of their original school. The regulations will shorten the previous period for automatic discharge, so borrowers do not default on their loans after a closure of their school. The OBBBA delays implementation of the closed school loan discharge provisions of the 2022 Borrower Defense Regulations until July 1, 2035. Accordingly, the closed school loan discharge provisions that were in effect on July 1, 2020, have been reinstated.

Dispute Resolution. The 2016 Borrower Defense Regulations, which apply to all Direct Loans made on or after July 1, 2017, and before July 1, 2020, prohibit requiring students to initially engage in an institutions’ internal complaint processes, prohibit pre-dispute arbitration agreements, and class action lawsuit waivers, and require notification to ED of arbitration filings and awards, for claims that may form the basis for a BDTR. The 2019 Borrower Defense Regulations, which apply to all Direct Loans made on or after July 1, 2020, and before July 1, 2023, generally remove these prohibitions but require institutions whose students must enter into pre-dispute arbitration agreements or class action waivers to disclose publicly those requirements, and prohibit requiring a student to participate in arbitration or any internal dispute resolution process prior to filing a BDTR application with ED. The 2022 Borrower Defense Regulations, prohibit institutions from requiring borrowers to sign mandatory pre-dispute arbitration agreements or class action waivers for claims related to the making of a Direct Loan or the provision of educational services for which the loan was obtained. The OBBBA delays implementation of the 2022 Borrower Defense Regulations until July 1, 2035. Accordingly, dispute resolution provisions under the BDTR regulations that were in effect on July 1, 2020, have been reinstated.

Other Department of Education and Privacy Regulation

Title IV programs. In addition, education institutions engaged in financial activities such as the granting of student loans are obligated to safeguard student information pursuant to the Gramm-Leach-Bliley Act, or GLBA, and implementing regulations, which among other things, requires reasonable security practices to protect personally identifiable financial information of students, parents, or other individuals in a customer relationship with the institution. Failure to comply with the applicable GLBA requirements may result in FTC enforcement, which could include the imposition of conditions, penalties, monitoring, and oversight. Institutions are also subject to the FTC’s general deceptive and unfair practices jurisdiction of Section 5 of the FTC Act for processing student information. FTC privacy and security enforcement focuses primarily on: (i) collecting, using, sharing, or retaining personal information inconsistent with representations, commitments, and promises in privacy policies and other public statements; (ii) privacy policies that do not adequately inform consumers about actual practices; and (iii) failing to reasonably protect the security, privacy, and confidentiality of personal information. Institutions must also comply with the FTC Red Flags Rule, a requirement designed to identify and mitigate identity theft, including for certain student accounts. States can also bring similar enforcement actions under so called “mini-FTC Acts” as well as other applicable privacy and security laws. For example, the California Consumer Privacy Act, or the CCPA, and implementing regulations impose disclosure and notice obligations on institutions and provide a broad array of consumer rights relating to California residents and their personal information, including among others, the right to access personal information, the right to opt out of sales of personal information, the right to correct or delete personal information, and the right to limit certain disclosures of personal information. The CCPA has the potential for significant civil penalties for failing to comply as well as a private right of action and statutory damages for data breaches that are the result of unreasonable security. Other comprehensive state privacy laws that our institutions may be subject to with varying requirements have come into effect in recent years and these requirements continue to evolve. Our collection of personal information relating to individuals in the European Union, or EU, or the United Kingdom, or UK, may implicate the EU’s or the UK’s General Data Protection Regulation, or GDPR. Non-compliance with the EU GDPR or UK GDPR could result in a fine for certain activities of up to €20 million or £17.5 million, respectively, or 4% of an organization’s global annual revenue, whichever is higher, per violation.

Accessibility for Students with Disabilities. Section 504 of the Rehabilitation Act of 1973, or Section 504, prohibits discrimination against a person with a disability by any organization that receives federal financial assistance, which includes us. ED’s Office for Civil Rights, or OCR, which enforces Section 504, together with the Department of Justice, have asserted that requiring the use of technology in a classroom environment when such technology is inaccessible to individuals with disabilities violates Section 504, unless those individuals are provided accommodations or modifications that permit them to receive all the educational benefits provided by the technology in an equally effective and integrated manner. In recent years, OCR has taken enforcement action against several institutions of higher education, including primarily online institutions, after determining that their websites and online learning management platforms were not accessible to persons with a disability. In 2022, OCR initiated a compliance review of APUS’s learning management system and courses. In August 2024, OCR identified APUS was out of compliance with certain accessibility requirements for people with disabilities for ten courses. Currently, APUS is cooperating with OCR on a resolution to bring APUS into compliance. At this time, we cannot predict when the compliance review will be completed, additional costs associated with compliance, whether there will be any further findings, or whether OCR will place any liability or other limitations on APUS as a result of the compliance review. An institution that does not come into compliance with Section 504 could lose access to federal funding, including the ability to participate in the Title IV programs and TA. See the Risk Factor captioned “Enforcement of laws related to the accessibility of technology continues to evolve, which could result in increased information technology development costs and compliance risks” for more information.

Title IX. Title IX of the Education Amendments of 1972, or Title IX, prohibits discrimination on the basis of sex in education programs that receive funding from the federal government. ED regulations effective August 2020, or the 2020 Rule, define what constitutes sexual harassment for purposes of Title IX in the administrative enforcement context, describe what actions trigger an institution’s obligation to respond to incidents of alleged sexual harassment, and specify how an institution must respond to allegations of sexual harassment. In April 2024, ED released new regulations that significantly revise how schools, including higher education institutions, must address cases involving sex-based discrimination, including cases of sexual harassment, sex-based harassment, and assault occurring on or after the August 1, 2024, effective date. The new regulations also explicitly include protections against discrimination based on sexual orientation, gender identity, and sex characteristics. In addition, the new regulations update protections against discrimination because of pregnancy, related conditions, or terminations of pregnancy. Multiple states challenged the new regulations, and federal district courts granted preliminary injunctions in 26 states: Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming. In some instances, courts expanded the injunction to named schools, regardless of where the schools are located; APUS was named among nearly 700 such schools in a July 2024 list. Kansas v. United States Dep’t of Educ., No. 5:24-cv-4041 (D. Kan. 2024). Except where enjoined, the new regulations otherwise became effective on August 1, 2024. In January 2025, a federal district court granted summary judgment against ED, concluding that the new regulations were unlawful and permanently vacating the rule nationwide. Tennessee v. Cardona, No.

2:24-cv-072 (E.D. Ky. 2025). In February 2025, OCR issued a Dear Colleague Letter confirming both that it will enforce Title IX under the 2020 Rule and that institutions with open investigations initiated under the new regulations should reevaluate such investigations for consistency with the 2020 Rule.

Distance Education. ED regulations provide institutions additional flexibility in offering distance education and competency-based education programs. Definitions in these regulations specify the instructional requirements that distance education programs must abide in order to remain eligible for Title IV disbursements. Failure to comply with these standards could lead to adverse actions by ED. In addition, in January 2025, ED published new regulations that define a “distance education course” and require institutions to report student enrollment in distance education in accordance with procedures that will be established by ED. The new regulations become effective July 1, 2026.

Department of Defense

Regulation of Tuition

Service members of the U.S. Armed Forces are eligible to receive ~~tuition~~TA ~~assistance~~ from their branch of service through the DoD’s TA program. Service members may use TA to pursue postsecondary degrees at institutions that are accredited by accrediting agencies recognized by ED. APUS ~~participates in TA~~, ~~and for students in APUS undergraduate~~RU, and ~~beginning January 2020, for students in APUS master’s programs. RU and~~ HCN ~~also~~ participate in TA programs. ~~RU’s active~~Active-duty military students in most undergraduate programs and master’s level graduate programs at APUS and RU receive per credit hour tuition pricing at a tuition rate that is commensurate with available TA funding to allow tuition charges to be 100% covered by TA.

InSince March 2013, DoD has restricted the ability of service members who have not previously taken a postsecondary education course and who are in certain duty locations outside the continental United States, or overseas locations, to receive TA for courses offered by institutions of higher education that are not parties to contracts with the DoD to provide DoD voluntary education programs at those locations. Because we do not have contracts with the DoD to provide instruction at overseas locations, service members who begin their first postsecondary education program after arrival at an applicable overseas location may not use TA to pay for their education in our programs until after they have already successfully completed a course with an institution that has entered into a contract to provide voluntary education programs at that overseas location. Service members who were already enrolled in one of our programs before arriving at an overseas location may continue to receive TA for the in-progress program, but they will be encouraged to enroll in courses provided by institutions that provide programs at the applicable overseas location.

DoD requires educational institutions to meet certain criteria, including generally having at least 20 students on base, and to request access in writing that outlines among other things the specific purpose of the visit, in order to access installations solely to provide counseling, and generally prohibits education institutions from holding regular or recurring office hours on installations solely to provide counseling. This limits APUS’s ability to support existing students and serve new students. If APUS is not able to improve its access to military installations and its existing students on those installations, or find alternative methods to serve those students, its military enrollments may decline.

Each institution participating in TA is required to sign a Memorandum of Understanding, or MOU, outlining certain commitments and agreements between the institution and DoD prior to being permitted to participate in TA. Pursuant to the DoD MOUs, among other requirements, institutions must: (i) explain certain tools to service members, such as ED’s “College Navigator” website and the “Paying for College” website of the CFPB; (ii) comply with requirements related to readmission policies for service members; (iiiii) abide by limitations on the use of funds derived from TA; (iv) provide certain academic and student support services; (~~iii~~v) disclose information about transfer of credit; (vi) in certain circumstances, return TA funds to DoD (such as when a student ceases to attend or an institution cancels a course); (ivvii) offer to service members loan counseling before private student loans are offered or recommended; and (v)ix comply with ED’s Title IV “program integrity” rules, including rules related to incentive payments and misrepresentation. The DoD ~~MOUs~~MOU also ~~provide~~provides that an institution may only participate in TA if it is accredited by an accrediting agency recognized by ED, approved for VA funding, and a participant in Title IV programs. In February 2025, the DoD Voluntary Education Institutional Compliance Program, or ICP, notified APUS that it will conduct a review of APUS’s compliance with the DoD MOU. ICP completed its review in May 2025 and issued a report with no findings of noncompliance. Additional information regarding the potential risks associated with the DoD MOUs is provided in the “Risk Factors” section of this Annual Report.

Several federal government agencies have established an online student complaint system for service members, veterans, and their families to report negative experiences at education institutions and training programs administering the Post-9/11 GI Bill, TA, and other military-related education benefit programs. An institution having recurring substantive complaints, or demonstrating an unwillingness to resolve complaints, may face a range of penalties, including revocation of its MOU and removal from participation in TA.

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complaints, or demonstrating an unwillingness to resolve complaints, may face a range of penalties, including revocation of its MOU and removal from participation in TA.

Department of Defense Funding

A series of automatic federal budget cuts, known as sequestration, have impacted certain federal student aid programs since fiscal year 2013 and have been extended through fiscal year 2030. As a result of uncertainty about the availability of funding, several military branches initially suspended and later announced changes to their TA programs. For example, the Army now requires service members to complete one year of service after graduation from Advanced Individual Training in order to be eligible for TA, and the Army and the Coast Guard have both reduced the total per service member annual benefits The OBBBA appropriated $100 million for TA in federal fiscal year 2025, beginning on October 1, 2025, that is available until September 30, 2029 if not earlier exhausted. The $100 million was a one-time allocation across the military branches based on their active-duty population numbers. We understand that a significant portion of this allocation may have been obligated or spent.

Congressional inaction on budgetary matters has led to lapses in federal funding, resulting in government shutdowns, including the government shutdown that began on October 1, 2025, and ended on November 12, 2025, or the 2025 Shutdown, and subsequent policy changes that have affected TA programs at DoD. A future government shutdown, particularly one that includes DoD, or suspension or resulting modification of TA programs, including in connection with the failure to increase or a delay in increasing the federal debt ceiling, could have a material adverse effect on APUS’s enrollments and on our cash flows, results of operations, and financial condition. For additional details, see the Risk Factor captioned “Enrollments and course registrations have been, and may in the future be, adversely affected by a variety of factors not directly related to education programs, including changes in military activity, budgets and government shutdowns” and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – U.S. Federal Government Shutdown” section.

Funding shortfalls have also affected DoD TA programs. For example, as a result of the expected exhaustion of annual TA benefits available to sailors, in May 2019, the Navy ceased approving TA funds for eligible sailors until the start of the government’s fiscal year 2020 on October 1, 2019. Currently, Navy service members must have a minimum of three years of service before becoming eligible to use TA and cannot beuse TA in their last year of service. Additionally, ~~and~~ for TA and the Navy College Program for Afloat College Education, funding is capped at 18 semester hours per fiscal year combined, and career funding is capped at 120 semester hours combined. In addition, eligible sailors can only use TA to fund two courses each quarter of the fiscal year, and reservists on one-year orders are ineligible for TA.

~~In 2024, Congress approved an approximately 5.9% increase in the funds appropriated for DoD federal off-duty and volunteer education aid programs across all military branches.~~ On December 11, 2024, the U.S. Department of the Army announced increases to the annual cap on the dollar amount of tuition assistance benefits and to the hours cap for each semester. ItOther isservice ~~unclear whether the increased funding will encourage other military~~ branches tohave ~~expand~~since ~~service~~followed ~~member~~suit ~~eligibility~~and ~~for~~increased ~~TA programs, or~~ the ~~amount of the service member~~ annual ~~benefit.~~cap ~~We expect each military branch and the DoD to continually evaluate their approach to education funding, and the resulting changes could have an impact~~ on the ~~funds~~amount ~~available~~of totuition ~~service~~assistance ~~members to pursue their education at our institutions~~benefits.

We expect each military branch and the DoD to continually evaluate their approach to education funding, and the resulting changes could have an impact on the funds available to service members to pursue their education at our institutions.

Department of Veterans Affairs

The VA administers education benefits provided by federal law, including the Montgomery GI Bill, or GI Bill, and the Post-9/11 GI Bill. APUS, RU, and HCN are approved to provide education to veterans and members of the selective reserve and their dependents by the state approving agencies where RU and HCN campuses are located for RU and HCN, and in West Virginia for APUS. In order for an institution to participate in VA education benefits, it must be a participant in the Title IV programs.

For the ~~2024-~~2025-2026 academic year, an eligible veteran who attends a non-public U.S. institution may receive veterans education benefits to pay for tuition and fees based on the net cost to the veteran up to $2829,~~937~~920.~~09.~~ Veterans pursuing a program of education on a more than half-time basis at an on-campus location are eligible for a monthly housing allowance equal to the basic allowance for housing available to service members in that location who are at a military pay grade E-5 and have dependents. Veterans pursuing a program of education solely through distance education on a more than half-time basis are eligible to receive a monthly housing allowance equal to 50% of the national average, or $1,~~177~~169.5000 per month.

To the extent that TA does not cover the full cost of tuition for service members, eligible service members may also use their benefits under the GI Bill or the Post-9/11 GI Bill through the “Top-Up” program. The “Top-Up” program allows U.S. Military active-duty service members to use their GI Bill or Post-9/11 GI Bill benefits to pay the difference between the total cost of a college course and the amount of TA that is paid by the military for the course but is limited to 36 months of payments.

The Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of 2020, or the Isakson Roe Act, enacted in January 2021, modified policies related to GI Bill and other VA-administered education funds, in part to align VA requirements with DoD and ED requirements related to student financial aid. Section 1018 of the Isakson Roe Act mandates that schools that receive veterans education benefits: (i) provide VA students with information on total cost of an education program, an estimate of debt the student will have upon graduation, graduation rates, requirements to obtain any 41

39The Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of 2020, or the Isakson Roe Act, modified policies related to GI Bill and other VA-administered education funds, in part to align VA requirements with DoD and ED requirements related to student financial aid. Section 1018 of the Isakson Roe Act mandates that schools that receive veterans education benefits: (i) provide VA students with information on total cost of an education program, an estimate of debt the student will have upon graduation, graduation rates, requirements to obtain any license, certification, or approval for which the course of education is designed to provide preparation, and certain other information; (ii) inform VA students of the availability and potential eligibility of federal financial aid before packaging or arranging private student loans or alternative financing programs; (iii) avoid fraudulent and unduly aggressive recruiting or automatic renewal techniques; (iv) avoid misrepresentations or payment of incentive compensation on the basis of securing enrollments; (v) provide VA students with information regarding graduation requirements; (vii) obtain required approvals from the institutions’ accrediting agency for new courses or programs; (viii) maintain a policy to accommodate service members and reservists to be readmitted if they are temporarily unable to attend due to service requirements; and (ix) appoint a point of contact to provide academic and financial aid advising.

~~license,~~The ~~certification,~~Responsible orEducation ~~approval~~Mitigating ~~for~~Options ~~which~~and ~~the~~Technical ~~course~~Extensions ~~of education is designed to provide preparation~~Act, ~~and~~among ~~certain~~ other ~~information;~~things, ~~(ii)~~clarified ~~inform~~that ~~VA students of~~ the ~~availability~~Isakson ~~and~~Roe ~~potential~~Act ~~eligibility~~Section of1018 ~~federal~~prohibition ~~financial~~on aid before packaging or arranging private student loans or alternative financing programs; (iii) avoid fraudulent and unduly aggressive recruiting or automatic renewal techniques; (iv) avoid misrepresentations or payment of incentive compensation ondoes ~~the~~not ~~basis~~apply ofto ~~securing~~foreign ~~enrollments; (v) provide VA~~ students ~~with~~residing ~~information~~outside ~~regarding graduation requirements; (vii) obtain required approvals from~~ the ~~institutions’~~United ~~accrediting~~States ~~agency~~who ~~for new courses or programs; (viii) maintain a policy to accommodate service members and reservists to be readmitted if they~~ are ~~temporarily~~ineligible ~~unable~~for tofederal ~~attend~~student ~~due to service requirements; and (ix) appoint a point of contact to provide academic and~~ financial aid ~~advising~~.

The ~~Responsible~~Training ~~Education~~in ~~Mitigating~~High-Demand ~~Options~~Roles ~~and~~to ~~Technical~~Improve ~~Extensions~~Veteran Employment Act, ~~enacted~~or inthe ~~December~~THRIVE ~~2021~~Act, ~~provides~~amended ~~COVID-19~~provisions related ~~extensions~~ to ~~certain~~ veterans’ education ~~benefits~~programs ~~and~~found ~~clarifies~~in ~~that~~ARPA and the Isakson Roe Act. ~~Section~~The ~~1018~~THRIVE ~~prohibition~~Act requires the VA to work with the Department of Labor to determine the list of high-demand occupations for rapid retraining assistance, excludes programs pursued solely through distance learning on ~~incentive~~a ~~compensation~~half-time ~~does~~basis ~~not~~or ~~apply~~less from the housing stipend available to ~~foreign~~those ~~students~~in ~~residing~~the ~~outside~~retraining program, and requires the UGovernment Accountability Office to report on the outcomes and effectiveness of retraining programs.S. ~~who~~The ~~are~~legislation ~~ineligible~~also ~~for~~requires ~~federal~~the ~~student~~VA ~~financial~~to ~~aid~~take disciplinary action if a person with whom an institution has an agreement to provide educational or recruiting services violates the VA’s incentive compensation prohibitions.

~~Institutions~~The ~~were~~Ensuring ~~generally~~the ~~required~~Best toSchools befor inVeterans ~~compliance~~Act ~~with~~of ~~the~~2022 ~~Isakson~~modified ~~Roe~~how ~~Act~~the byVA ~~August~~implements ~~2021. However,~~ the ~~Isakson~~rule ~~Roe~~generally ~~Act~~forbidding ~~allowed~~use ~~institutions~~of toVA ~~seek~~benefits ~~from~~for ~~the~~students VAenrolling in a ~~one-academic-year~~program ~~waiver~~in ofwhich ~~Section~~more ~~1018.~~than ~~Subsequently,~~85% ~~the~~of ~~REMOTE~~students ~~Act~~enrolled ~~delayed~~in the ~~effective~~program ~~date~~have any portion of ~~the~~their ~~Isakson~~tuition, ~~Roe~~fees, ~~Act’s~~or ~~Section~~other ~~1018~~charges ~~requirements~~paid to ~~August~~or 1,for ~~2022~~them by the institution or by the VA, ~~and~~or ~~institutions~~the ~~were~~85/15 ~~permitted~~Requirement. toAmong ~~seek~~other athings, ~~one-academic-year~~the ~~waiver~~law ofclarifies that ~~deadline~~reporting ~~beginning~~associated ~~June~~with the 85/15, ~~2022.~~Requirement RUgenerally ~~did~~does not ~~seek~~apply ato ~~waiver~~institutions ofat ~~the~~which ~~August~~35% 1,or ~~2021,~~fewer ~~compliance~~students ~~deadline~~receive GI bill benefits, ~~and~~computed itseparately ~~satisfied~~for ~~Section~~the ~~1018~~main ~~requirements~~campus byand ~~that~~any ~~deadline.~~branch Inor ~~September~~extension ~~2021,~~of ~~APUS~~the ~~and~~institution. ~~HCN~~The ~~received~~law ~~waivers~~also exempts programs for ~~the~~which ~~requirements~~fewer ofthan ~~Section~~10 ~~1018~~students ~~for~~have ~~the~~any ~~period~~portion ~~August~~of 1their tuition, ~~2021~~fees, ~~through~~or ~~July~~other ~~31,~~charges ~~2022.~~paid ~~APUS~~to ~~and~~or ~~HCN~~for ~~did~~them ~~not~~by ~~seek~~the ~~additional~~institution ~~waiver~~or ~~extensions,~~by ~~and~~the ~~they~~VA. ~~satisfied~~An ~~Section~~institution ~~1018~~that meets the requirements byfor ~~July~~an ~~31,~~exemption ~~2022~~must submit verifying information to the VA on a biennial basis.

The Training in High-Demand Roles to Improve Veteran Employment Act, or the THRIVE Act, enacted in June 2021, amended provisions related to veterans education programs found in ARPA and the Isakson Roe Act. The legislation requires the VA to work with the Department of Labor to determine the list of high-demand occupations for rapid retraining assistance, excludes programs pursued solely through distance learning on a half-time basis or less from the housing stipend available to those in the retraining program, and requires the Government Accountability Office to report on the outcomes and effectiveness of retraining programs. The legislation also requires the VA to take disciplinary action if a person with whom an institution has an agreement to provide educational or recruiting services violates the VA’s incentive compensation prohibitions.

On August 26, 2022, former President Biden signed into law the Ensuring the Best Schools for Veterans Act of 2022, which modifies how the VA implements the rule generally forbidding use of VA benefits for students enrolling in a program in which more than 85% of students enrolled in the program have any portion of their tuition, fees, or other charges paid to or for them by the institution or by the VA, or the 85/15 Requirement. Among other things, the law clarifies that reporting associated with the 85/15 Requirement generally does not apply to institutions at which 35% or fewer students receive GI bill benefits, computed separately for the main campus and any branch or extension of the institution. The law also exempts programs for which fewer than 10 students have any portion of their tuition, fees, or other charges paid to or for them by the institution or by the VA. An institution that meets the requirements for an exemption must submit verifying information to the VA on a biennial basis.

Additional Sources of Student Payments

In addition to the Title IV, DoD, and VA programs described above, eligible students may participate in other financial aid programs or receive support from other governmental and private sources. Some of our students finance their own education or receive full or partial employer tuition reimbursement. Our institutions enter into agreements with various employers through which our institutions agree to a variety of terms, including terms related to the provision of tuition grants to eligible employees. Our institutions may offer interest free payment plans of less than 12 months to students to assist them with the financing of educational expenses. In certain circumstances, our students may access alternative loan programs from a number of private lenders, which are intended to cover the difference between what the student receives from all financial aid sources and the student’s total cost of attendance. As a condition to an institution’s participation in the Title IV programs, the institution must adopt a code of conduct pertaining to student loans, including alternative loans.

HCN offers its students extended payment plan options. The extended payment plan is designed to assist students with educational costs including tuition and fees. The extended payment plan is subject to various federal and state laws and regulations, such as the Truth in Lending Act as implemented in Regulation Z, the Equal Credit Opportunity Act as implemented in Regulation B and the Unfair, Deceptive or Abusive Acts or Practices provisions of Title X of the Dodd-Frank Act.

In addition, HCN offers an institutional affordability grant to students demonstrating financial need to cover the difference between the total cost of tuition and fees less the amount of all eligible financial aid resources. The grant is designed to limit a student’s monthly payment to $200 through an award of up to $200 per month, or $600 per term after consideration of financial aid, employer tuition reimbursement, and other financial resources.

Consumer Protection

Consumer Financial Protection Bureau

The CFPB has pursued enforcement actions against certain for-profit institutions of higher education and has released several reports that directly address issues related to institutions of higher education. In ~~November~~January ~~2024~~2026, the CFPB Education Loan Ombudsman released its annual report, which analyzed ~~a sample set of 1~~4,~~301~~500 private student loan complaints ~~(out of 4,107 received complaints)~~ and 218,~~977~~400 federal student loan complaints ~~(out of 14,170~~ received ~~complaints) received~~ during the ~~2023-~~2024-2025 award year. The CFPB indicated that ~~with respect to~~ the ~~private~~majority ~~student loan complaints, almost one in three~~ of ~~the sample set were submitted by borrowers seeking loan cancellation; and with respect to the federal student loan~~ complaints, ~~many complaints~~ involved problems consumers had dealing with their loan servicer. We do not know what enforcement actions the CFPB may pursue, or what steps Congress or federal agencies may take, in response to these reports and whether such actions, if any, will have an adverse effect on our business or results of operations.

Federal Trade Commission

In October 2021, in what it termed a broad-based initiative to deter for-profit college fraud, the FTC issued informational notices to 70 for-profit higher education institutions, including APUS and RU, informing them of certain marketing practices the FTC had previously determined to be deceptive or unfair and therefore unlawful under the FTC Act. The FTC indicated that an institution’s receipt of the notice was not an indication that the institution has engaged in deceptive or unfair conduct. The informational notices were sent in furtherance of an FTC Act provision permitting penalties against those engaging in unfair or deceptive acts or practices with actual knowledge of their unfair or deceptive nature. The informational notices informed the institutions that engaging in such practices could subject a company to civil penalties under that provision. By providing the informational notices, the FTC is able to document that the institutions have knowledge that the FTC has found these marketing practices to be unfair or deceptive. The FTC also announced that it would be enhancing its enforcement cooperation with other agencies with oversight of educational institutions, including ED’s Office of Federal Student Aid and the VA. We do not know what enforcement actions the FTC may pursue in light of its informational notices and whether such actions, if any, will have an adverse effect on our business or results of operations.

Other Issues Related to Consumer Protection and Complaints

Many states have become more active in regulating for-profit education from a consumer protection perspective, specifically related to enforcement of consumer protection laws and implementation of new regulations by state attorneys general. Actions by state attorneys general and other governmental agencies, whether or not involving us or our institutions, could damage our reputation and the reputation of our institutions and limit the ability to recruit and enroll students, which could reduce student demand for our institutions’ programs and adversely impact our revenue and cash flow from operations.

Our institutions are recipients of complaints filed with state regulatory authorities, the Better Business Bureau, and posted in online forums. Our institutions attempt to resolve such complaints in a cooperative manner. However, even if such complaints are resolved or are otherwise unfounded, they may still harm the reputation of our institutions.

In October 2021, ED announced that it had restored an Office of Enforcement within ED’s Office of Federal Student Aid to strengthen oversight of and enforcement actions against postsecondary institutions that participate in federal student loan, grant, and work-study programs. In September 2024, the Office of Enforcement issued a Federal Student Aid Enforcement Bulletin describing conduct that creates a risk of engaging in substantial misrepresentations, which may prompt administrative action by ED against an institution.

Compliance with Regulatory Standards and the Effect of Regulatory Violations

Compliance Reviews

Our institutions ~~are~~and certain of our third-party service providers may be subject to compliance reviews, ~~and~~inspections, audits, and investigations, by various external agencies, including ED, ED OIG, state licensing agencies, DoD, VA, and accrediting agencies. For example, in February 2026, ED OIG notified RU that it would conduct an inspection related to RU’s process related to addressing students with unusual enrollment history flags for the 2024-2025 award year. The HEA and ED regulations also require institutions to submit annually a compliance audit conducted by an independent certified public accountant in accordance with Government Auditing Standards and applicable ED OIG audit standards. In addition, to enable ED to make a determination of financial responsibility, institutions must annually submit audited financial statements prepared in accordance with ED regulations.

In September 2016, ED began a program review of APUS’s administration of the Title IV programs during the 2014-2015 and 2015-2016 award years. ED closed the program review in January 2021, with no findings, penalties, or requirements for further action.

In July 2017, ED began a program review of RU’s administration of Title IV program during the 2015-2016 and 2016-2017 award years. In September 2022, RU received a program review report from ED that asserted 14 findings of noncompliance with Title IV rules, including rules related to Title IV administration, policies, and consumer information and reporting requirements, and the federal work study, Pell Grant, and Federal Supplemental Educational Opportunity Grant programs. The program review required RU to do a review in connection with the federal work study finding, prepare policies and procedures, return small amounts of funds to two students, provide training, and take other actions in connection with the findings, and to provide a response, which RU timely provided. In July 2023, ED officially closed the program review by issuing a final program review determination and indicating that 12 of the findings were considered resolved with no liabilities. The remaining two findings related to Title IV administration had established liabilities of less than $100. ED determined that the total liability was minimal as it was under the $1,000 threshold so no recoupment was required; however, RU was responsible for, and has taken all steps necessary, to ensure that adequate corrective procedures had been implemented.

In July 2022, HCN received from ED the final program review determination from a review that had been pending since June 2017, and in September 2022 ED notified HCN that it had closed the program review, and no further action was required. The review included findings of a failure to prorate fees, return of Title IV funds calculations that were not properly computed, untimely and inaccurate reporting to the National Student Loan Data System, incomplete verification, and cost of attendance formulation deficiencies. HCN was required to do a full file review in connection with the return of Title IV funds finding, to have the review tested by an independent auditor, and to prepare policies and procedures and take other actions in connection with the findings. The total liability for this finding was approximately $12,000.

In July 2023, ED began a program review of APUS’s administration of Title IV programs during the 2021-2022 and 2022-2023 award years, which includes, among other things, a review of compliance with the 90/10 Rule. APUS has not yet received a program review report from ED. Accordingly, at this time, we cannot predict the outcome of the APUS program review, when it will be completed, whether there will be any adverse findings in the resulting program review report, what findings there may be related to 90/10 Rule compliance, if any, or whether ED will place any liability or other limitations on APUS as a result of the review.

In order to participate in TA, institutions must agree to participate in DoD’s Voluntary Education Institutional Compliance Program, or ICP. An institution that, through the ICP, is found noncompliant with DoD requirements and demonstrates an unwillingness to resolve a finding may be subject to a range of penalties from a written warning to termination of the institution’s participation in TA. APUS and RSRU have previously been subject to ICP reviews. For example, in February ~~2020~~2025, ~~DoD~~ICP ~~informed~~notified APUS that it ~~was~~will ~~one~~conduct ofa ~~250 institutions selected for ICP~~ review inof ~~2020. Upon request, in May 2020,~~ APUS’s ~~submitted~~compliance ~~a self-assessment in connection~~ with the ~~ICP. In November 2020,~~ DoD ~~issued a report finding that APUS did not clearly articulate certain policies or clearly make certain disclosures~~MOU. AsICP ~~required,~~completed ~~APUS submitted~~ its ~~corrective~~review ~~action plan and related evidentiary support and~~ in ~~April~~May ~~2021,~~2025 ~~APUS was informed that the review had been completed,~~ and noissued ~~further actions are required. In February 2025, ICP notified APUS that it will conduct~~ a ~~review~~report ~~of APUS compliance~~ with ~~the~~no ~~DoD~~findings ~~MOU~~of noncompliance.

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Potential Effect of Regulatory Violations

If our institutions fail to comply with the regulatory standards governing Title IV programs, ED could impose one or more sanctions, including transferring our institutions to the reimbursement or cash monitoring system of payment, seeking to require repayment of certain Title IV program funds, requiring the posting of an irrevocable letter of credit in favor of ED as a condition for continued Title IV certification, taking emergency action against our institutions, referring the matter for criminal prosecution, or initiating proceedings to impose a fine or to limit, condition, suspend, or terminate participation in Title IV programs. If our institution’s approval to participate in Title IV programs is terminated, it will also lose its ability to participate in TA pursuant to its DoD MOU, as well as in education benefits administered by the VA.

If such sanctions or proceedings were imposed against our institutions and resulted in a substantial curtailment, or termination, of participation in Title IV programs, this would materially and adversely affect our enrollments, revenue, results of operations, and financial condition.

If one of our institutions were to lose its eligibility to participate in Title IV programs, or if the amount of available Title IV program funds were reduced, we could seek to arrange or provide alternative sources of revenue or financial aid for students. Although we believe that one or more private organizations would be willing to provide financial assistance to students attending our institutions, there is no assurance that this would be the case, and the interest rate and other terms of such financial aid might not be as favorable as those for Title IV program funds. We may be required to guarantee all or part of such alternative assistance or might incur other additional costs in connection with securing alternative sources of financial aid. Accordingly, the loss of our eligibility to participate in Title IV programs, or a reduction in the amount of available federal student financial aid, would be expected to have a material adverse effect on our financial condition and results of operations even if we could arrange or provide alternative sources of revenue or student financial aid.

In addition to the actions that may be brought against us as a result of our institutions’ participation in Title IV programs, we also may be subject, from time to time, to complaints and lawsuits relating to regulatory compliance brought not only by our regulatory agencies, but also by other government agencies and third parties, such as present or former students or employees and other members of the public.

Regulatory Actions and Restrictions on Operations

Many actions that we may wish to take in connection with our operations are subject to regulation from a variety of agencies. For example, ED’s regulations, state regulatory requirements, and accrediting agency standards may, in certain instances, limit our ability to acquire or sell institutions, and to establish additional locations and programs. ~~For example~~Similarly, asmany described in “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Eligibility and Certification Procedures”, RU is currently subject to certain temporary growth restrictions on the institution, including imposing limitations on new programs and locations and imposing a cap on the number of students that participate in Title IV programs that can be enrolled. Many states require approval before institutions can add new programs, campuses, or teaching locations. Generally, these agencies require institutions to notify them, and sometimes require institutions to obtain their approval, in advance of opening a new location or implementing new programs. ~~APUS~~As isdescribed ~~regulated~~in by“Student ~~its~~Financing ~~institutional~~Sources ~~accreditor~~and ~~HLC~~Related asRegulations/Requirements ~~well~~– asDepartment aof ~~state~~Education ~~agency~~– inRegulation ~~West~~of ~~Virginia.~~Title RUIV isFinancial ~~regulated~~Aid byPrograms ~~its~~– ~~institutional~~Eligibility ~~accreditor~~and ~~HLC~~Certification asProcedures”, ~~well~~RU aswas ~~the~~subject ~~state~~to ~~agencies~~certain inlimitations ~~Florida,~~on ~~Illinois,~~new ~~Kansas,~~programs ~~Minnesota,~~and ~~North~~locations ~~Dakota,~~ and ~~Wisconsin. HCN~~ is ~~regulated~~currently bysubject ~~its~~to ~~institutional~~a ~~accreditor~~cap ~~ABHES~~on asthe ~~well~~number asof ~~the~~students ~~state~~that ~~agencies~~participate in ~~Ohio,~~Title ~~Indiana,~~IV ~~and~~programs ~~Michigan.~~that ~~GSUSA~~can isbe ~~regulated by its institutional accreditor ACCET as well as a district agency in the District of Columbia~~enrolled.

Change in Ownership Resulting in a Change of Control

ED’s regulations, state regulatory requirements, and accreditation standards may limit our ability to acquire, merge, or sell institutions, and may impose restrictions on activities following a transaction. For example, ED must approve any change in ownership resulting in a change of control of APEI, our institutions or any institution we may acquire. These restrictions may impede our ability to grow by acquisition, or to dispose of assets. Moreover, as a publicly traded company, the potential adverse regulatory effects of a change of control could influence future decisions by us and our stockholders regarding the sale, purchase, transfer, issuance, or redemption of our common stock. In addition, the regulatory burdens and risks associated with a change of control could discourage bids for our shares of common stock and could have an adverse effect on the market price of our shares.

For example, the Rasmussen Acquisition was required to be reported to, and in some cases approved by, various education regulatory bodies. RU also pursued post-closing notices and consents related to the change in ownership. State agencies, accreditors, boards of nursing, and other relevant regulators also required further action with respect to the Rasmussen Acquisition. Additionally, some regulators required approval after the change in ownership in order to continue proper licensure, accreditation, approval, or authorization.

agencies, accreditors, boards of nursing, and other relevant regulators also required further action with respect to the Rasmussen Acquisition. For example, HLC required an additional site visit within six months of the closing date of the Rasmussen Acquisition, and the visit occurred in February 2022. Additionally, some regulators required approval after the change in ownership in order to continue proper licensure, accreditation, approval, or authorization.

In addition, on January 1, 2022, APEI acquired substantially all of the assets of GSUSA for approximately $1.0 million, subject to working capital adjustments. GSUSA is licensed by the D.C. Higher Education Licensure Commission, or DCHELC, and accredited by ACCET. DCHELC and ACCET approved the transaction.

U.S. Department of Education

The HEA provides that after an institution undergoes a change in ownership and control ED may temporarily provisionally certify the institution based on a materially complete application received within 10 business days after the change occurred. ED may continue such temporary provisional certification on a month-to-month basis until it has rendered a final decision on the institution’s application, provided the institution has timely supplied all required information and documentation. If ED approves the application, it issues a provisional certification, which extends for a period expiring not later than the end of the third complete award year following the date of provisional certification.

When a change in ownership and control occurs, ED applies certain financial tests to determine the financial responsibility of the institution under the new ownership. The institution generally is required to submit a same-day audited balance sheet reflecting the financial condition of the institution immediately following the change in ownership and control, and the same-day balance sheet must satisfy certain requirements. In addition, when a change in ownership and control occurs and there is a new owner, the institution must submit to ED the new owner’s audited financial statements for its two most recently completed fiscal years. If those audits do not satisfy ED requirements, ED may impose conditions on continued Title IV participation, such as a letter of credit, certain growth restrictions including with respect to adding locations and programs, and additional monitoring requirements. ED’s financial responsibility standards are described more fully above in “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Financial Responsibility”.

In October 2022, ED announced final regulations relating to change in ownership and change in control rules and procedures, effective July 1, 2023. The ownership interest threshold for publicly traded corporations remains at 25%, as described above. For entities that are not closely held or publicly traded corporations, including limited liability companies, limited liability partnerships, limited partnerships, and similar types of legal entities, the final regulations increase the ownership interest threshold from 25% to 50% for a change in ownership that results in a change in control automatically triggering ED’s approval process, and also provide that ED’s approval process may apply when a change in control occurs despite not meeting the 50% threshold. The final regulations also require institutions to notify ED and students of a planned change in ownership that results in a change in control at least 90 days in advance. In addition, the final regulations impose reporting obligations on institutions for changes in ownership that do not result in a change in control, lowering the threshold for reporting such changes from 25% to 5% ownership interest for all entity types. The final regulations also: (i) require additional financial protection (i.e., letters of credit) when a new owner is lacking financial statements or as ED determines necessary; and (ii) eliminate the existing requirement that ED continue an institution’s participation with the same terms and conditions in their Title IV agreement as prior to the transaction. In addition, the final regulations define “main campus” and modify the definitions of “additional location” and “branch campus” to clarify that a location must be within the same “ownership structure” of the institution.

Department of Education

An institution that undergoes a change in ownership resulting in a change of control loses its eligibility to participate in Title IV programs and must apply to ED in order to reestablish such eligibility. ED regulations define what constitutes a change in ownership and control of various types of legal entities. For example, ED regulations provide that a change of control of a publicly traded company occurs in one of two ways: (i) there is an event that would obligate the corporation to file a Current Report on Form 8-K with the Securities and Exchange Commission disclosing a change of control; or (ii) the corporation has a stockholder that owns at least 25% of the total outstanding voting stock of the corporation and is the largest stockholder of the corporation, and that stockholder ceases to own at least 25% of such stock, or ceases to be the largest stockholder. As a result, a significant purchase or disposition of our voting stock, including an acquisition resulting in a stockholder owning at least 25% of our outstanding stock, could be determined by ED to be a change in ownership and control. For entities that are not closely held or publicly traded corporations, including limited liability companies, limited liability partnerships, limited partnerships, and similar types of legal entities, the ownership interest threshold is 50% for a change in ownership that results in a change in control automatically triggering ED’s approval process. ED’s approval process may apply when a change in control occurs despite not meeting the 50% threshold. Institutions must notify ED and students of a planned change in ownership that results in a change in control at least 90 days in advance. In addition, institutions are subject to certain reporting obligations for changes in ownership that do not result in a change in control, including 5% ownership interests for all entity types. ED’s regulations also require additional financial protection (i.e., letters of credit) when a new owner is lacking financial statements or as ED determines necessary.

When a change in ownership and control occurs, ED applies certain financial tests to determine the financial responsibility of the institution under the new ownership. The institution generally is required to submit a same-day audited balance sheet reflecting the financial condition of the institution immediately following the change in ownership and control, and the same-day balance sheet must satisfy certain requirements. In addition, when a change in ownership and control occurs and there is a new owner, the institution must submit to ED the new owner’s audited financial statements for its two most recently completed fiscal years. If those audits do not satisfy ED requirements, ED may impose conditions on continued Title IV participation, such as a letter of credit, certain growth restrictions, including with respect to adding locations and programs, and additional monitoring requirements. ED’s financial responsibility standards are described more fully above in “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Financial Responsibility”.

State Regulatory Agencies

Many states require institutions of higher education to report or obtain approval of certain changes in ownership or other aspects of institutional status. The types of and triggers for such reporting or approval vary, but many states include the sale of a controlling interest of common stock in the definition of a change of control requiring approval. A change of control may require us to obtain approval of the change in ownership and control in order to maintain our state approval. In certain circumstances, state approving agencies responsible for oversight of veterans education benefits also may require an institution to obtain approval for a change in ownership and control.

Accreditors

Many accrediting agencies, including HLC, require institutions of higher education to report or obtain approval for certain changes in legal status, ownership, form of control, or other aspects of institutional status, but the types of and triggers for such reporting or approval vary. Many accrediting agencies also require on-site evaluations to confirm the appropriateness of any approval. Some accrediting agencies’ oversight may also extend to defined changes that occur in an institution’s parent or controlling entity, and not necessarily the institution itself. Such oversight could trigger additional reviews of the institution and possible change in accreditation status.

Should we attempt to enter into transactions with institutions accredited by other accreditors, we would be required to follow the requirements of such accreditors. Our management may not have experience with the accreditors of the target ~~institution, which would increase the risks related to such a transaction and management of the institution subsequent to the transaction.~~

institution, which would increase the risks related to such a transaction and management of the institution subsequent to the transaction.

Restrictions on Adding Locations and Educational Programs

ED may, as a condition of participation in Title IV programs, require prior approval of new locations, programs, or otherwise restrict the number of programs an institution may add. ED’s regulations require institutions to report and, in certain cases (such as when an institution is provisionally certified such as APUS and RU), to seek approval for a new additional campus location at which at least 50% of a program will be offered if the institution wants to disburse Title IV program funds to students enrolled at that location. Institutions are responsible for knowing whether they need approval, and institutions that add locations and programs and disburse Title IV program funds in connection with those locations and programs without having obtained any necessary approval may be subject to administrative repayments and other sanctions.

The HEA requires for-profit institutions to be in full operation for two years before qualifying to participate in Title IV programs. However, ED regulations in many circumstances permit an institution that is already qualified to participate in Title IV programs to establish additional campus locations that are exempt from the two-year rule. The new campus location must satisfy all other applicable requirements for institutional eligibility, including approval by the relevant state authorizing agency and the institution’s accrediting agency.

Provisionally certified institutions of higher education, such as APUS and RU, ~~and institutions on HCM1 like APUS, RU and HCN,~~ must seek prior approval from ED to offer new academic programs eligible for Title IV program funds and to open new locations at which Title IV program funds will be disbursed. A fully certified degree-granting institution generally is not obligated to obtain ED’s prior approval for a new location, an additional program leading to a degree at the same level previously approved by ED, or a new program that both prepares students for gainful employment in the same or related recognized occupation as an education program that has previously been designated as an eligible program at that institution and meets certain minimum-length requirements. However, ED could nevertheless require a fully certified institution to obtain prior approval for new programs and locations for purposes of Title IV program participation.

Other Regulations

GSUSA’s contracts are governed by the Federal Acquisition Regulation, or FAR, a regulatory framework. The FAR affects how GSUSA interacts and does business with its federal government clients, including by providing government agencies with rights not typically found in commercial contracts. Our government contracts may provide for termination by the government at any time, without cause. In addition, we may be subject to audits and investigations relating to these contracts, and any violations could result in civil and criminal penalties and administrative sanctions, including termination of contract, refund or suspension of payments, forfeiture of profits, payment of fines, and suspension or debarment from future government business. GSUSA’s GSA Schedule contract was renewed on March 4, 2024, and expires on March 1, 2044. Failure to maintain a GSA Schedule contract would materially adversely impact GSUSA’s business. Information about risks associated with GSUSA’s contracts being governed by the FAR is provided in the “Risk Factors” section of this Annual Report.

Other Recent Legislative and Regulatory Activity

Many of our students rely on federally funded programs, including Title IV programs, TA and education benefits administered by the VA that may be affected by changes in the federal budget. Due to the substantial amount of federal funds disbursed to schools through Title IV programs, TA, and education benefits administered by the VA, the large number of students and institutions participating in these programs, and significant political interest in the cost of education, Congress continues to show interest in regulation and oversight of institutions of higher education, especially those that are for-profit.

In addition, ED withdrew or terminated pending rulemakings pertinent to postsecondary education shortly before the change in the Presidential administration. ItPresident isTrump ~~unclear~~and ~~what~~members ~~ED’s~~of ~~rulemaking~~his ~~priorities~~administration ~~will~~have bealso ~~under~~stated that the ~~new~~ administration intends to dismantle ED, orlimiting ifits ~~the~~functions ~~administration~~to ~~will~~only ~~curtail~~those ~~ED’s~~that ~~operations,~~are ~~budget~~statutorily ~~and~~required ~~rulemaking~~or ~~authority~~transferring oversight of certain functions to other agencies. For more information, see the Risk Factor captioned “The postsecondary education regulatory environment has changed and may change in the future as a result of ~~U.S.~~United States federal elections”.

The One Big Beautiful Bill Act

On July 4, 2025, the OBBBA was signed into law. Among other things, the OBBBA amends portions of the Higher Education Act of 1965, as amended, makes changes to the Title IV programs, and restores certain ED regulations related to borrower defense to repayment and closed school discharge.

The OBBBA will overhaul the structure of certain student loan programs. Effective July 1, 2026, it will eliminate Federal Direct PLUS loans for graduate and professional students, with limited grandfathering. The law also: (i) fixes annual and aggregate loan limits for graduate students, with different caps depending on whether they are or have been professional students; (ii) creates a lifetime maximum aggregate amount for Title IV loans (other than a loan made to the student as a parent on behalf of a dependent); (iii) authorizes institutions to limit the amount of loans a student may borrow in an academic year provided such limit is applied consistently to all students enrolled in a program; and (iv) requires the amount of loan funds available under a student’s annual loan eligibility to be reduced proportionately to the degree to which that student is not enrolled on a full-time basis. On September 29, 2025, ED established the Reimagining and Improving Student Education Committee, or RISE Committee, and initiated the negotiated rulemaking process for the OBBBA student loan provisions. On November 6, 2025, the RISE Committee reached consensus with ED on proposed changes regarding a new income-driven

repayment plan, the Repayment Assistance Plan, including the treatment of income for borrowers filing taxes jointly and the minimum monthly loan payment amount, and the definition of “professional student”, among other things.

The OBBBA also establishes an accountability framework, effective July 1, 2026, that institutions must satisfy at the program level in order for students in the program to continue to receive Direct Loans. On December 8, 2025, ED convened AHEAD and initiated the negotiated rulemaking process for the OBBBA accountability framework. On January 9, 2026, AHEAD reached consensus on proposed modifications to GE regulations. Additional information regarding the proposed modifications is available above under “Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Gainful Employment Regulations”. On January 30, 2026, ED published a notice of proposed rulemaking that incorporated the consensus language, and accepted public comments to the notice of proposed rulemaking until March 2, 2026.

The OBBBA creates Workforce Pell Grants, effective July 1, 2026, for students enrolled in eligible workforce programs that satisfy certain requirements and limits eligibility for Pell Grants in certain ways.

The OBBBA also changes existing U.S. tax laws, including extending or making permanent certain provisions of the Tax Cuts and Jobs Act, repealing certain clean energy initiatives, in addition to other changes. The OBBBA did not have a material impact on our annual effective tax rate in 2025.

The OBBBA also appropriated the OBBBA TA Funds, consisting of $100 million in funding for TA that is separate and apart from ordinary course appropriations and are available for use through September 30, 2029. We understand that a significant portion of this allocation may have been obligated or spent.

Finally, the OBBBA delays implementation of the Biden Administration’s BDTR regulations and closed school loan discharge regulations until July 1, 2035. Accordingly, BDTR and closed school loan discharge provisions of the 2019 Borrower Defense Regulations, as defined above, have been reinstated. For details the 2019 Borrower Defense Regulations generally, see “Student Financing Sources and Related Regulations/Requirements – Regulation of Title IV Financial Aid Programs – Borrower Defenses” and “– Closed School Loan Discharge” above.

ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk. Before making an investment, you should carefully consider the following risks, as well as the other information contained in this Annual Report, including our “Financial Statements and Supplementary Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Any of the risk factors described below could significantly and adversely affect our business, financial condition, results of operations, cash flows, and prospects. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe are not material may also adversely affect our business, financial condition, results of operations, cash flows, and prospects. As a result of the risks and uncertainties described below, as well as such additional risks and uncertainties, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Related to Attracting and Retaining Students

Our success and financial performance depend on the effectiveness of our ability to attract students who persist in our institutions’ programs.

Building awareness and reputation among potential students of our institutions and the programs they offer is critical to our institutions’ ability to attract new students. In order to maintain and increase our revenue, profits, and cash flows, our institutions must continue to enroll new, qualified students in a cost-effective manner, and these students must remain active and be successful in our institutions’ programs. In addition, because our institutions experience declines in their student populations as a result of graduation, transfers to other academic institutions, withdrawals, military deployments, and other reasons, in order to grow, we need to first attract sufficient students to replace those who have left. In addition to broader challenges with attracting qualified students, any negative effects resulting from the occurrence of risks set forth in this “Risk Factors” section, from action or inaction by us, regulators or accrediting agencies, or events beyond our control could prevent us from successfully advertising and marketing our institutions’ programs and from successfully enrolling and retaining qualified students in those programs. If we are unable to continue to develop awareness and a positive reputation of our institutions and the programs we offer, and to recruit and enroll students that persist in our programs over time, our enrollments will suffer and there could be a material adverse effect on our financial condition and results of operations.

If we are unable to effectively market our programs or expand into new markets, our results of operations would be negatively affected.

Our marketing strategy for APUS has traditionally focused on building long-term, mutually beneficial relationships with businesses, other organizations, and individuals in military, veterans, extended military~~-affiliated~~ families, and other public service and service-minded communities, with a focus on educating those who serve. We must continue to develop and expand marketing channels that attract college-ready students ~~unaffiliated~~who ~~with~~use ~~the~~non-federal ~~military~~funds ~~who~~as ~~may~~a ~~perform~~payment ~~well~~source ~~at APUS~~ and ~~focus~~may onperform ~~efforts~~well toat ~~attract students outside of the military~~APUS, including in order to maintain compliance with the 90/10 Rule. However, we have experienced challenges attracting such students, and there is no assurance that we will be able to do so on a cost-effective basis or to prevent adeclines ~~further~~in ~~decline~~these intypes ~~non-military~~of enrollments at APUS.

Furthermore, because APUS’s tuition is generally lower than that of most of its competitors, it has fewer dollars to spend per student on marketing and advertising than its competitors. Our pricing structure and margin profile may limit the availability of financial resources to be used for marketing and enrollment in general. Nevertheless, we have tried to, and may in the future try to, implement new marketing tactics and channels, including those with which we have no experience, and there is no guarantee that our marketing and branding efforts will achieve the desired results. If we are unable to develop and optimize marketing and advertising programs that are effective in developing awareness of our institutions and the programs we offer and their value propositions, and we are unable to enroll and retain qualified students in ~~military~~the ~~and~~markets ~~non-military~~we ~~markets~~serve, our enrollments would suffer, and there could be a material adverse effect on our financial condition and results of operations.

In April 2024, APU announced its intention to expand its reach to become a global digital university that integrates emerging technologies and enhanced teaching and learning opportunities for faculty and students, adopted a new visual identity, a new tagline: Digital Learning for Real LifeTM, an expanded global focus, and a suite of digital student services. In connection with this transition ~~and rebranding initiative~~, APU aims to provide students with highly collaborative learning experiences, AI-powered classroom support, and personalized digital services. This transition and rebranding initiative may be difficult to complete, divert management attention, and require us to expend resources and incur expenses. Additionally, despite APU’s efforts, this transition and rebranding initiative may not yield increased enrollments, and, even if it does, any increased enrollments may not offset expenses we incur and could potentially impact the mix of students attracted to APU, which could have a negative effect on our compliance with the 90/10 Rule. If APU fails to successfully ~~rebrand~~transition into a global digital university or incurs substantial ~~expenses in an unsuccessful attempt to do so, we may fail to attract new enrollments to the extent necessary~~

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expenses in an unsuccessful attempt to do so, we may fail to attract new enrollments to the extent necessary to realize a sufficient return on our efforts. Accordingly, our business, results of operations, and financial condition could be impacted.

As described more fully under “Business – Regulatory Environment – Accreditation – Institutional Accreditation – The Planned Combination of APUS, RU, and HCN”, and in the Risk Factor that begins with the caption “The planned combination of APUS, RU, and HCN,” ~~on January 28~~, ~~2025, we announced~~ the planned Combination, ~~which~~ may impact our ability to maintain and increase student enrollments.

The success of RU and HCN depends, in part, on our ability to maintain and increase student enrollments in those institutions’ programs. As part of our strategy to continue to build a national nursing platform, we intend to open new campuses and other operating locations; however, as a result of ~~disciplinary~~back-to-back ~~actions~~changes of control, composite score concerns and limitations imposed by the U.S. Department of Education, RU is currently and may continue to be limited in its ability to grow enrollment and expand ~~into~~in new geographical markets. Accordingly, there is no assurance that we will be able to effectuate this expansion strategy at RU ~~and HCN~~ or if such strategy will achieve desired results. For more on the limitations on our ability to expand our nursing programs into new geographical markets, see also the Risk Factors that begin with the captions “If our institutions are unable to successfully adjust…”, “If we or our institutions fail to comply with the extensive regulatory…,” “Failure to improve certain of our programs’ NCLEX pass rates...,” as well as “Business – Regulatory Environment – Regulatory Actions and Restrictions on Operations” and “Business – Regulatory Environment – Student Financing Sources and Related Regulations/Requirements” generally.

Opening new campuses and locations requires us to obtain appropriate federal, state, and accrediting agency approvals and to comply with any related requirements from those agencies. In addition, with the opening of new campuses, we have been and will be marketing in geographic areas in which our institutions did not previously have a campus, and these marketing efforts may not be successful. If in the future we are unable to effectively market RU’s and HCN’s programs in these geographies, we may not be able to successfully maintain and increase those institutions’ enrollments, which would negatively affect our results of operations.

If we are unable to, or suffer any delay in our ability to, obtain appropriate approvals and accreditations, open, and attract additional students to new campus locations, offer programs at new campuses in a cost-effective manner, identify appropriate clinical placements, or otherwise effectively manage the operations of newly established campuses, our results of operations and financial condition could be adversely affected. In addition, the inability to expand existing programs efficiently, or successfully, pursue new program initiatives, and add new campuses, including as a result of marketing failures, would harm our ability to grow our business and could have an adverse impact on our financial condition.

If APUS does not have strong relationships with, and access to, various military installations and installation education centers, our ability to maintain enrollments from military students and our future growth may be impaired.

WeAt APUS, we are highly dependent on our relationship with the military and its members, and our ability to attract and retain military service members as students. Because APUS relies on referrals and personal relationships for recruiting, impediments to access can have an adverse effect on maintaining and generating registrations from military students.

DoD requires us to meet certain criteria in order to access installations solely to provide counseling and generally prohibits us from holding regular or recurring office hours on installations solely to provide counseling. Furthermore, the DoD ~~MOUs~~MOU, which ~~specify~~specifies the terms and conditions of participation in tuition assistance, or TA, and ~~are~~is discussed in more depth in “Business – Regulatory Environment – Student Financing Sources and Related Regulations/Requirements – Department of Defense”, and the related increased focus by DoD on relationships with and oversight of educational providers, or additional DoD restrictions, could lead to adverse changes in the nature of our relationships with military installations and their education centers and our access to military service members.

An inability to maintain strong relationships with installation education centers and with military service members would have an adverse effect on APUS’s ability to attract and retain qualified students, resulting in an adverse effect on our financial condition.

Enrollments and course registrations byhave ~~active-duty~~been, ~~service~~and ~~members~~ may in the future be, adversely affected by a variety of factors not directly related to education programs, including changes in military activity, budgets and government shutdowns.

Events not directly related to education programs, ~~could~~including ~~lead to~~ a ~~reduction~~government ~~in registrations from students on active duty. For example~~shutdown, ~~large-scale~~ personnel reductions, or ~~other~~a ~~significant~~drawdown ~~drawdowns~~ of U.S. active-duty military forces ~~would~~have ~~likely~~led, ~~have~~and amay ~~negative~~in ~~effect~~the onfuture ~~enrollment~~lead, ~~and~~to ~~course~~a ~~registrations.~~reduction ~~Increased~~in ~~operations~~enrollments and ~~overseas~~course ~~deployments~~registrations. For example, ~~increased~~Congressional ~~demands~~inaction on ~~active-duty~~budgetary ~~service~~matters ~~members,~~has ~~and~~led ~~limited~~to ~~internet~~lapses ~~access~~in ~~associated~~funding ~~with~~or ~~some~~has ~~deployments~~resulted ~~could~~in ~~also~~government ~~negatively~~shutdowns, ~~impact~~and ~~the~~policy ~~ability~~changes ofhave ~~certain~~affected ~~active-duty~~federal ~~military~~student ~~students~~aid toprograms ~~pursue~~at ~~higher~~the ~~education~~DoD. As discussed in greater detail

4849

~~Congressional~~below ~~inaction~~under on“Management’s ~~budgetary~~Discussion ~~matters~~and ~~has~~Analysis ~~led~~of toFinancial ~~lapses~~Condition inand ~~funding~~Results orof ~~has~~Operations ~~resulted~~– ~~government~~Overview ~~shutdowns,~~– ~~and~~U.S. ~~policy~~Federal ~~changes~~Government ~~have~~Shutdown”, ~~affected~~the ~~federal~~2025 ~~student~~Shutdown ~~aid~~occurred ~~programs~~due atto ~~DoD.~~failure Aby ~~future~~Congress ~~government~~to ~~shutdown,~~pass ~~particularly~~appropriations ~~one~~legislation, ~~that~~which ~~impacts~~resulted ~~DoD~~in, oramong ~~includes~~other ~~suspension~~things, orthe ~~resulting~~temporary ~~modification~~suspension of TA programs,. ~~including~~The inscope ~~connection~~and ~~with~~effectiveness ~~congressional~~of ~~action~~mitigation ormeasures ~~inaction~~we ~~relating~~implemented toor ~~the~~may ~~federal~~still ~~debt~~implement ~~ceiling~~remain uncertain. However, ~~could~~the ~~have~~2025 aShutdown ~~material~~has had an adverse ~~effect~~impact on APUS’s ~~enrollments~~ and on our course registrations, cash flows, results of operations, and financial condition. InThere ~~addition,~~can ~~budget~~be ~~cuts~~no orassurance ~~constraints,~~that ~~including~~there inwill ~~connection~~not ~~with~~be ~~the~~another ~~failure~~federal togovernment ~~increase~~shutdown in 2026 or afuture ~~delay~~years that results in ~~increasing~~disruption ~~the~~to ~~federal~~TA ~~debt~~or ~~ceiling,~~other ~~could~~financial ~~negatively~~aid ~~affect~~programs. usThe byOBBBA ~~leading~~also toappropriated ~~force~~$100 ~~reductions~~million orin ~~cuts~~funding tofor ~~services~~TA that is separate and ~~tools~~apart ~~that~~from weordinary orcourse ~~APUS’s~~appropriations ~~students~~and ~~rely~~are ~~upon~~available for ~~recruitment,~~use ~~enrollment~~through September 30, ~~access~~2029. However, ~~and~~we ~~TA.~~understand ~~Even~~that ~~temporary~~a ~~changes~~significant toportion ~~military~~of ~~activity~~this allocation may have been obligated or spent, and ~~budgets~~such funds therefore may ~~adversely~~be ~~affect~~available ~~operations.~~if at all on a limited basis in the event of another government shutdown or budgetary disruption.

Budget cuts or constraints, including in connection with the failure to increase or a delay in increasing the federal debt ceiling, could negatively affect us by leading to force reductions or cuts to services and tools that we or APUS’s students rely upon for recruitment, enrollment, access, and TA. Even temporary changes to military activity and budgets may adversely affect operations. Increased operations and overseas deployments, increased demands on active-duty service members, and limited internet access associated with some deployments could also negatively impact the ability of certain active-duty military students to pursue higher education.

We will remain subject to the risk of events that occur within and with respect to the military, even where they do not directly relate to the use of TA. Because of APUS’s dependence on active-duty military students, changes that occur within and with respect to the military could have a material adverse effect on our results of operations.

Declines in enrollments at RU could ~~materially~~have ~~adversely~~a ~~affect~~material adverse effect on RU’s and our profitability, financial condition, results of operations, and cash flows.

RU enrollments have been impacted by adverse findings by accrediting agencies and state regulatory bodies as a result of failures to meet applicable NCLEX benchmarks, operational challenges, self-imposed enrollment caps, the pause on new enrollments, and the consolidation and closure of campuses, as discussed in greater detail in “Risks Related to the Regulation of Our Industry”. In addition, RU enrollments may be affected by challenges related to implementation of our integrated curriculum and testing services, along with any resulting student complaints and our approach to resolving such complaints. IfDeclines in RU’s enrollments docould ~~not~~have ~~continue~~a tomaterial ~~stabilize,~~adverse effect on RU’s and our reputation, profitability, financial condition, results of operations, and cash flows ~~could be materially adversely affected~~. While we have identified, and continue to work to identify, new marketing strategies and other initiatives that we believe will attract and enroll quality students, there can be no assurance that these efforts will be successful.

Changes our institutions may make to their operations to improve the student experience and enhance our institutions’ ability to identify and enroll students who are likely to succeed may adversely affect our institutions’ enrollment, profitability, financial condition, results of operations, and cash flows.

We have identified, and continue to work to identify, potential changes and initiatives that we believe will more effectively attract and lead to the enrollment of students who are ready for and who are likely to persist in our institutions’ programs. We continue to support those students, and help improve their educational outcomes, including through changes to admissions, initiatives to increase the level of engagement and collaboration in the classroom, to improve the educational outcomes of our students, and strengthen the bond with students. We also have implemented initiatives dedicated to helping students pass the NCLEX exam the first time by identifying student-specific challenge areas, providing customized tutoring resources and faculty training, and making changes to curriculum and course retake policies at RU and HCN.

Additional initiatives have included and may in the future include the following:

•altering our institutions’ marketing efforts to target the appropriate prospective students;

•changing tuition costs and payment options;

•further revising admissions standards and requirements;

•~~additional~~adding ~~updates~~technology to ~~the~~improve ~~admissions~~student ~~process and procedures~~support; ~~and~~

•evaluating curriculum for alignment and timeliness of learning;

•increasing staff support and faculty readiness;

•further updating the admissions process and procedures; and

•implementing more stringent satisfactory academic progress standards.

These initiatives require significant time, energy, and resources, and may adversely impact our institutions’ business, financial condition, results of operations, and cash flows, particularly in the near term. We may not succeed in achieving our objectives due to organizational, operational, regulatory, resource, or other constraints. If our efforts are not successful, we may experience reduced enrollment, increased expense, or other impacts on our business that materially and adversely impact our results of operations, cash flows, and financial condition. Even if these initiatives successfully lead to the identification and enrollment of students who are likely to succeed and to improvements in student experience, they could result in adverse impacts on enrollments. Due to the many factors that can impact enrollments, we may not appropriately identify the cause of any adverse impacts, and therefore may not be able to appropriately modify our initiatives to address such impacts.

objectives due to organizational, operational, regulatory, resource, or other constraints. If our efforts are not successful, we may experience reduced enrollment, increased expense, or other impacts on our business that materially and adversely impact our results of operations, cash flows, and financial condition. Even if these initiatives successfully lead to the identification and enrollment of students who are likely to succeed and to improvements in student experience, they could result in adverse impacts on enrollments. Due to the many factors that can impact enrollments, we may not appropriately identify the cause of any adverse impacts, and therefore may not be able to appropriately modify our initiatives to address such impacts.

If our institutions are unable to successfully adjust to future market demands by updating and expanding the content of existing programs and developing new programs, specializations, and modes of teaching on a timely basis and in a cost-effective manner, our performance may be impaired.

49We believe that our institutions need to continuously update and expand the content of their existing programs and develop new programs, specializations, and modes of teaching in order to continue to attract and retain qualified students and remain competitive in the postsecondary education market. However, the updates and expansions of our institutions’ existing programs and the development of new programs and specializations may not be accepted by accreditors, state and federal regulators such as ED, existing or prospective students, or employers. If we cannot respond to changes in market requirements, our business may be adversely affected. Even if our institutions are able to develop acceptable new programs, they may not be able to introduce these new programs as quickly as students require or as quickly as competitors introduce competing programs. To offer a new academic program, our institutions may be required to obtain appropriate federal, state, and accrediting agency approvals, which may be conditioned or delayed in a manner that could significantly affect our growth plans. In addition, growth restrictions imposed on our institutions in connection with changes in ownership or otherwise may adversely impact our ability to adjust to future market demands. For example, due to the change in ownership from APEI’s acquisition of RU, RU is currently subject to ED-imposed restrictions on the number of students receiving Title IV who can be enrolled at RU. Additionally, BON imposed constraints on RU nursing enrollments in Kansas. These restrictions may limit or adversely affect RU’s growth opportunities, including restricting its ability to serve additional students, and limiting its ability to continue to evolve to address current needs by providing new or modified programs. If we are unable to respond adequately to changes in market requirements due to financial constraints, regulatory limitations, or other factors, our institutions’ ability to attract and retain students could be impaired and our financial results could suffer.

We believe that our institutions need to continuously update and expand the content of their existing programs and develop new programs, specializations, and modes of teaching in order to continue to attract and retain qualified students and remain competitive in the postsecondary education market. However, the updates and expansions of our institutions’ existing programs and the development of new programs and specializations may not be accepted by accreditors, state and federal regulators such as ED, existing or prospective students, or employers. If we cannot respond to changes in market requirements, our business may be adversely affected. Even if our institutions are able to develop acceptable new programs, they may not be able to introduce these new programs as quickly as students require or as quickly as competitors introduce competing programs. To offer a new academic program, our institutions may be required to obtain appropriate federal, state, and accrediting agency approvals, which may be conditioned or delayed in a manner that could significantly affect our growth plans. In addition, growth restrictions imposed on our institutions in connection with changes in ownership or otherwise may adversely impact our ability to adjust to future market demands. For example, including due to the change in ownership from APEI’s acquisition of RU, RU is currently subject to ED-imposed restrictions on new programs and locations and on the number of students receiving Title IV who can be enrolled at RU. Additionally, state-imposed constraints exist on RU enrollments in Minnesota and Kansas. These restrictions will limit or adversely affect RU’s growth opportunities, including restricting its ability to serve additional students, particularly additional nursing students, and limiting its ability to continue to evolve to address current needs by providing new or modified programs. If we are unable to respond adequately to changes in market requirements due to financial constraints, regulatory limitations, or other factors, our institutions’ ability to attract and retain students could be impaired and our financial results could suffer.

Establishing new academic programs, specializations, and modes of teaching or modifying or eliminating existing programs requires our institutions to make investments in management, academic resources including faculty, and capital expenditures, incur marketing expenses, and reallocate other resources. Our institutions may have limited experience providing courses in new fields of study or new modes of teaching (including non-degree credentials) and may need to modify systems and strategies or enter into arrangements with other institutions and organizations to provide new programs effectively and profitably. If our institutions are unable to establish new academic programs, increase the number of students enrolling in new academic programs, offer programs in a cost-effective manner, hire faculty to administer new programs or deliver specialized instruction, or otherwise manage effectively the operations of those programs, our results of operations and financial condition could be adversely affected.

Continued strong competition in the postsecondary education market could decrease our institutions’ market share and increase our cost of acquiring students.

Within the postsecondary education market, our institutions compete primarily with not-for-profit public and private two-year and four-year colleges, as well as other for-profit schools. Public institutions receive substantial government subsidies, and public and private not-for-profit institutions have access to government and foundation grants, tax-deductible contributions, and other financial resources generally not available to for-profit schools. These institutions may have instructional and support resources, or course delivery tools, that are superior to those of our institutions and other for-profit schools. Many of these competitors, whether for-profit, not-for-profit, or public, may also be able to leverage their greater scale, size, name recognition, and financial and other resources to compete for potential students, or to provide instructional and support resources that may be superior to those of our institutions and other for-profit schools. In addition, as indicated in “Our Market and Competition – Competition – Institutions Serving Military Students”, the Armed Forces have established, and may in the future establish, their own postsecondary education programs. Within the nursing education market, we compete with other schools offering similar programs, including for-profit and not-for-profit public and private colleges, that may have greater resources or a greater market presence or reputation in the local areas we serve. In addition, because of the relatively local focus of RU’s and HCN’s nursing programs, our competitive environment is impacted by various factors that are specific to the particular areas where our campuses are located, including local supply and demand dynamics for our programs, nurses, and nursing schools. RU’s and HCN’s results are therefore more susceptible to the actions of single competitors than the results of an institution that draws from a broader geographical area. For example, a particularly effective or ineffective marketing approach by another school, or the opening or closing of another school, could have unanticipated detriments or benefits to RU’s and HCN’s competitive position.

Within the postsecondary education market generally, we have experienced increased competition from new market entrants providing both online and non-traditional programs, including providers partnering with Online Program Management, and a shift of for-profit institutions to not-for-profit status. In the fall of 2024, there was an industry-wide increase of approximately 3% in undergraduate enrollment as compared to an approximate 2% increase in the fall 2023. However, despite overall increases in online postsecondary enrollments at the undergraduate and graduate levels, data suggest that previous growth in enrollment in postsecondary degree-granting institutions is slowing. The combination of reduced growth or declines in the postsecondary student population and the entrance of additional providers in the online postsecondary education market will 51

50Within the postsecondary education market generally, we have experienced increased competition from new market entrants providing both online and non-traditional programs, including providers partnering with Online Program Management, and a shift of for-profit institutions to not-for-profit status. In the fall of 2025, there was an industry-wide increase of approximately 2% in undergraduate enrollment as compared to an approximate 3% increase in the fall of 2024. However, despite overall increases in online postsecondary enrollments at the undergraduate and graduate levels, data suggest that previous growth in enrollment in postsecondary degree-granting institutions is slowing. The combination of reduced growth or declines in the postsecondary student population and the entrance of additional providers in the online postsecondary education market will further intensify competition, and any resulting decline in the number of enrollments could have an adverse effect on our results of operations. In addition, increased competition for college-ready students has led to an increase in the cost of advertising in certain marketing channels in 2025. Increases in our advertising costs, and continued increases in the cost of advertising in certain marketing channels, may adversely impact our ability to attract college-ready students and/or increase our student acquisition costs.

further intensify competition, and any resulting decline in the number of enrollments could have an adverse effect on our results of operations. In addition, although our overall advertising costs decreased year-over-year in 2024, increased competition for college-ready students has led to an increase in the cost of advertising in certain marketing channels. Increases in our advertising costs, and continued increases in the cost of advertising in certain marketing channels, may adversely impact our ability to attract college-ready students and/or increase our student acquisition costs.

We expect to continue to face greater competition from non-traditional offerings, provided by both educational institutions and non-traditional providers.

Competing institutions and others provide non-traditional education programs without charge or at low costs, including CBE programs, coding bootcamps, micro-credentialing, massive open online courses, and other flexible and individualized programs. We believe that our institutions will continue to face new competition from non-traditional programs, including lower cost programs. We offer or are working to develop our own alternatives in some of these areas. However, these efforts may not be successful. Other institutions have programs that are more fully developed, and our offerings may not be as successful, broad, or large enough or receive market acceptance. Our institutions may not be able to compete successfully against current or future competitors and may face competitive pressures that could adversely affect their business or results of operations. Increased availability of federal student financial aid for CBE programs could create additional competition and drive additional students toward non-traditional education programs. These factors could cause our institutions’ enrollments, revenue, and profitability to decrease significantly.

Tuition and fee increases at RU, APUS, and HCN could have an adverse impact on enrollment, our financial condition and our results of operations.

As more fully described in “Our Institutions and Operations – Our Institutions – Accreditation – Affordability and Cost of Attendance”, ~~certain~~all of our institutions implemented tuition and fee increases for certain or all students across select or all programs, as the case may be. Even with these increases, tuition and fees for our institutions are designed to be affordable and competitive when compared to the tuition and fees at similar institutions offering the same level of flexibility, accessibility, and student experience. However, higher tuition and fees may cause potential students to be unwilling, or unable, to enroll at our institutions and/or in affected programs, and existing students may be unwilling, or unable, to ~~remained~~remain enrolled, resulting in lower enrollments at our institutions and adverse impacts on our financial condition and results of operations.

RU’s actual and planned closure of campuses or termination of programs on certain campuses may adversely impact RU and us.

In August 2023, RU decided to voluntarily pause new enrollments in the Bloomington, Minnesota ADN program beginning in November 2023, and, after informing in December 2023 MBN that it intended to voluntarily close the program, RU closed the program, effective June 15, 2024. This program had been subject to adverse action and heightened scrutiny from regulators as a result of a continued failure to meet applicable regulatory and accreditor requirements.

In July 2024, RU closed its Lake Elmo, Minnesota campus and moved all enrolled students at the campus to RU’s Eagan, Minnesota campus, which is located less than 10 miles from the Lake Elmo campus. In addition, in May 2024, RU notified the ~~EAP~~Wisconsin Educational Approval Program, or WEAP, that it ~~intends~~planned to voluntarily close its Green Bay, and Wausau, Wisconsin campuses, effective December 31, 2025, and 2026, respectively. ~~Taken~~RU ~~together,~~closed the ~~actions~~Green ~~regarding~~Bay, ~~the~~Wisconsin ~~Lake~~campus, ~~Elmo~~effective ~~campus~~December 31, 2025, as planned, and ~~Wisconsin~~six ~~campuses~~students ~~are~~who ~~expected~~had not yet graduated, were transferred to ~~directly~~the ~~impact~~Wausau ~~approximately~~campus. ~~190~~As ~~students~~of December 31, or2025, 1%less ofthan ~~RU’s~~ten ~~current~~students ~~total~~were ~~enrollment~~enrolled at the Wausau, Wisconsin campus.

As RU evaluates its other campuses and programs, it could make similar consolidation and closure decisions about other campuses or programs. The closure of RU’s Bloomington, Minnesota ADN program, Green Bay, and Wausau, Wisconsin and Lake Elmo, Minnesota campuses, or any consolidation and closure of other campuses or programs may have an adverse impact on RU’s enrollments and reputation, which could further impact RU’s enrollments, operations, cash flows, and financial condition. Consolidation and closure decisions could also adversely impact online enrollment in the areas surrounding the closed ~~campuses. In addition, any future consolidation and closure could have a more significant impact on RU’s overall student body than these closures.~~

campuses. In addition, any future consolidation and closure could have a more significant impact on RU’s overall student body than these closures.

Risks Related to the Regulation of Our Industry

IfWe weand or our institutions ~~fail~~are subject to ~~comply with the~~ extensive regulatory requirements for the operation of postsecondary education institutions, we and ~~our institutions~~ could face penalties and significant restrictions on operations if we or our institutions fail to comply with these requirements, including loss of federal student loans and grants and access to DoD TA programs and education programs administered by the VA.

51We and our institutions are regulated by (i) accrediting agencies, (ii) state regulatory bodies, and (iii) the federal government through ED. Our institutions are also subject to DoD and VA oversight because our institutions participate in TA and veterans’ education benefits programs administered by the VA. Regulations, standards, and policies of these agencies affect the vast majority of our operations, including our educational programs, facilities, instructional and administrative staff, administrative procedures, marketing, recruiting, and financial operations and condition. These regulatory requirements can also affect our ability to acquire new institutions, open new locations, add new or expand existing educational programs, change our corporate structure or ownership, and make other substantive changes related to our company. Compliance with these requirements increases our cost of operations.

WeFindings of noncompliance with these laws, regulations, standards, and ~~our~~policies ~~institutions~~could ~~are~~result ~~regulated~~in byany ~~(i)~~of ~~accrediting~~the respective regulatory agencies taking certain actions, including: (iii) ~~state~~imposing ~~regulatory~~monetary ~~bodies~~fines, ~~and~~penalties, or injunctions; (~~iii~~ii) ~~the~~limiting ~~federal~~operations, ~~government~~including ~~through~~restricting ~~ED.~~our ~~Our~~ institutions’ ~~are~~ability ~~also~~to ~~subject~~offer new programs of study or to ~~DoD~~open ~~and~~new VAlocations, ~~oversight~~or ~~because~~imposing limits on our ~~institutions~~growth; ~~participate~~(iii) inlimiting TAor ~~and~~terminating ~~veterans’~~our ~~education~~ability ~~benefits~~to ~~programs~~grant ~~administered~~degrees; by(iv) ~~the~~restricting ~~VA.~~or ~~Regulations~~revoking our institutions’ accreditation, ~~standards~~licensure, ~~and~~or ~~policies~~other ofapproval ~~these~~required ~~agencies~~to ~~affect~~operate; ~~the~~(v) ~~vast~~limiting, ~~majority~~suspending, ofor terminating our ~~operations,~~institutions’ ~~including~~eligibility ~~our~~to ~~educational~~participate in Title IV programs, ~~facilities~~TA, ~~instructional~~or ~~and~~VA ~~administrative~~education ~~staff,~~benefit ~~administrative~~programs; ~~procedures,~~(vi) ~~marketing,~~requiring ~~recruiting,~~us ~~and~~to ~~financial~~repay ~~operations~~funds, ~~and~~post ~~condition.~~a ~~These~~letter ~~regulatory~~of ~~requirements~~credit, ~~can~~or ~~also~~become ~~affect~~subject ~~our ability~~ to ~~acquire~~payment ~~new~~methods ~~institutions,~~for ~~open~~Title ~~new~~IV ~~locations,~~programs ~~add~~that ~~new~~are ornot ~~expand~~the ~~existing~~advance ~~educational~~payment ~~programs,~~system; ~~change~~(vii) ~~our~~subjecting ~~corporate~~us ~~structure~~to civil or ~~ownership,~~criminal ~~and~~penalties; ~~make~~or (viii) other ~~substantive~~actions ~~changes~~that ~~related~~could tohave a material adverse effect on our ~~Company~~business. ~~Compliance~~See ~~with~~also ~~these~~the ~~requirements~~Risk ~~increases~~Factor ~~our~~that ~~cost~~begins of“Government ~~operations~~and regulatory agencies and third parties…” below.

Findings of noncompliance with these laws, regulations, standards, and policies could result in any of the respective regulatory agencies taking certain actions, including: (i) imposing monetary fines, penalties, or injunctions; (ii) limiting operations, including restricting our institutions’ ability to offer new programs of study or to open new locations, or imposing limits on our growth; (iii) limiting or terminating our ability to grant degrees; (iv) restricting or revoking our institutions’ accreditation, licensure, or other approval required to operate; limiting, suspending, or terminating our institutions’ eligibility to participate in Title IV programs, TA, or VA education benefit programs; (v) requiring us to repay funds, post a letter of credit, or become subject to payment methods for Title IV programs that are not the advance payment system; (vi) subjecting us to civil or criminal penalties; (vii) or other actions that could have a material adverse effect on our business. See also the Risk Factor that begins “Government and regulatory agencies and third parties…” below.

If one of our institutions were to lose its eligibility to participate in Title IV, TA, or VA education benefit programs, or if the amount of available funds under these programs were reduced, we could seek to arrange or provide alternative sources of revenue or financial aid for students. Although we believe that one or more private organizations would be willing to provide financial assistance to students attending our institutions, there is no assurance that this would be the case, and the terms of such financial aid might not be as favorable as those for funds under the Title IV, TA, or VA education benefit programs. We may be required to guarantee all or part of such alternative assistance or might incur other additional costs in connection with securing alternative sources of financial aid. Accordingly, the loss of our eligibility to participate in these programs, or a reduction in the amount of available federal student financial aid, would be expected to have a material adverse effect on our financial condition and results of operations, even if we could arrange or provide alternative sources of revenue or student financial aid.

The regulations, standards, and policies of ED, state regulatory bodies, and our institutions’ accrediting agencies change frequently and are subject to interpretive ambiguities. Recent and pending changes in, or new interpretations of, applicable laws, regulations, standards, or policies, or our noncompliance with any applicable laws, regulations, standards, or policies, could have a material adverse effect on our accreditation, authorization to operate in various states, permissible activities, receipt of funds under TA, ability to participate in Title IV programs, ability to participate in VA education benefit programs, or costs of doing business. We cannot predict with certainty how these regulatory requirements will be applied or whether we will be able to comply, or will be deemed by others to have complied, with all of the requirements, but these requirements or our noncompliance with them could adversely impact our business, operations, financial results, and reputation. For example, pending nursing education legislation in Florida could, if passed and not vetoed, lead to increased challenges in hiring and retaining qualified nursing program directors, and increased expenses related to compliance with new requirements. The legislation would also allow FBN to impose disciplinary remedies on an approved program against which an adverse action has been taken by another regulatory jurisdiction in the United States.

~~For~~In ~~example~~addition, ~~effective as of July 2024, a new Minnesota statute prohibits private educational institutions from using agreements that restrict students from disclosing information~~ in ~~connection~~some ~~with~~circumstances ~~many types~~ of ~~student~~noncompliance ~~complaints.~~or Inalleged ~~October 2024~~noncompliance, ~~MOHE~~we ~~notified~~may RUbe ~~that~~subject itto ~~had~~lawsuits ~~determined~~under ~~that~~the RUfederal ~~had~~False ~~used~~Claims anAct, ~~impermissible~~similar ~~nondisclosure~~state ~~agreement~~false ~~with~~claim ~~one~~statutes, ~~student.~~or RUvarious ~~has~~“whistleblower” ~~responded~~statutes. toThese ~~MOHE’s~~lawsuits ~~request~~in ~~for~~some ~~information~~cases ~~with respect to this matter; however, there~~ can be noprosecuted ~~assurance~~by ~~that~~a RUprivate ~~will~~plaintiff bein ~~able~~respect toof ~~favorably~~some ~~resolve~~action ~~this~~taken ~~matter~~by ~~with~~us, ~~MOHE~~even orif ~~that~~ED ~~MOHE~~or ~~will~~another ~~not~~regulatory ~~take~~body ~~adverse~~does ~~action~~not ~~against~~agree ~~RU,~~with ~~which~~the ~~could~~plaintiff’s ~~reflect~~theory ~~a range~~ of ~~actions~~liability, ~~including,~~or ~~but~~the ~~not~~government ~~limited~~can ~~to,~~intervene ~~fines,~~and ~~penalties,~~become ~~operational~~a ~~limitations,~~party ~~administrative~~to ~~reporting,~~the ~~monitoring,~~lawsuit. ~~and~~These uplawsuits tohave ~~revocation~~the ofpotential ~~RU’s~~to ~~status~~generate assignificant afinancial ~~registered~~liability ~~institution~~linked into ~~Minnesota,~~our ~~the~~receipt ~~state~~of ~~where~~government ~~RU’s~~funds, ~~main~~including ~~campus~~Title isIV ~~located.~~funds

In addition, in some circumstances of noncompliance or alleged noncompliance, we may be subject to lawsuits under the federal False Claims Act, similar state false claim statutes, or various “whistleblower” statutes. These lawsuits in some cases can be prosecuted by a private plaintiff in respect of some action taken by us, even if ED or another regulatory body does not agree with the plaintiff’s theory of liability, or the government can intervene and become a party to the lawsuit. These lawsuits have the potential to generate significant financial liability linked to our receipt of government funds, including Title IV funds and TA funds. Noncompliance or alleged noncompliance may also result in derivative litigation or litigation involving other stakeholders. Any such litigation could result in substantial costs and a diversion of our management’s attention and resources.53

Ifand ~~our~~TA ~~institutions~~funds. ~~fail~~Noncompliance toor ~~maintain~~alleged ~~their~~noncompliance ~~institutional~~may ~~accreditation,~~also ~~they~~result ~~will~~in ~~lose~~derivative ~~the~~litigation ~~ability~~or tolitigation ~~participate~~involving inother ~~Title~~stakeholders. IVAny ~~and~~such ~~DoD~~litigation TAcould ~~programs~~result in substantial costs and a diversion of our ~~student~~management’s ~~enrollments~~attention ~~would~~and ~~decline~~resources.

52If our institutions fail to maintain their institutional accreditation, they will lose the ability to participate in Title IV, DoD TA programs, and VA programs and our student enrollments would decline.

Accreditation at the institutional level by an accrediting agency recognized by ED is necessary to participate in Title IV and TA programs. Our institutions’ accrediting agencies may impose restrictions on their accreditation or may terminate their accreditation. To remain accredited, our institutions must continuously meet certain criteria and standards relating to, among other things, performance, governance, institutional integrity, educational quality, faculty, administrative capability, resources, and financial stability. Our institutions also must comply with accrediting agency policies and requirements, such as the requirements to apply and wait for approval before making certain changes. For example, as it did with the ~~acquisition of RU, or the~~ Rasmussen Acquisition, HLC requires approval before the closing of a transaction in order for an institution to maintain accredited status after closing. The standards of accrediting agencies that accredit our institutions and programs can and do vary, and accrediting agencies may prescribe more rigorous standards than are currently in place. Complying with more rigorous accreditation standards could require significant changes to the way we operate our business and increase our administrative and other costs. No assurances can be given that our institutions or programs would be able to comply with more rigorous accreditation standards in a timely manner or at all. Failure to meet accreditation criteria or standards or to comply with accreditation policies and requirements could result in the loss, limitation, modification, or suspension of accreditation at the discretion of the accrediting agency. The complete loss of institutional accreditation at one of our institutions would, among other things, render the institution and its students ineligible to participate in Title IV, TA, and VA programs, and have a material adverse effect on our enrollments, revenue, and results of operations. In addition, accrediting bodies may adopt new or revised criteria, standards, and policies that are intended to monitor, regulate, or limit the growth of our programs or for-profit institutions like ours.

Colleges and universities depend, in part, on accreditation in evaluating transfers of credit and applications to graduate schools. Many institutions will only accept transfer credit from institutions with certain institutional accreditation. Students and sponsors of tuition reimbursement programs look to accreditation for quality assurance, and employers rely on institutions’ accredited status when evaluating a candidate’s credentials. In addition, certain of our programs are accredited by programmatic accrediting agencies or recognized by professional organizations. If our institutions fail to satisfy the standards of these programmatic accrediting agencies, including as it relates to specific student achievement indicators, and professional organizations, the relevant programs could lose the programmatic accreditation or professional recognition, which could result in materially reduced student enrollments in those programs and have a material adverse effect on us. In addition, in certain cases, professional licensure will not be granted if an applicant for licensure earned the relevant educational credential from an institution or educational program that lacks institutional or programmatic accreditation. Failure to obtain or maintain programmatic accreditation or professional recognition for certain programs could prevent our students from seeking and obtaining licensure or employment, result in materially reduced student enrollments in affected programs, and have a material adverse effect on us.

If one or more of our institutions does not comply with the 90/10 Rule for two consecutive years, it or they will lose eligibility to participate in federal student financial aid programs.

The HEA requires all for-profit education institutions to comply with what is commonly referred to as the 90/10 Rule, which imposes sanctions on institutions that derive more than 90% of their total revenue on a cash accounting basis from Title IV programs, TA, and VA programs, and other federal educational assistance funds, as calculated under ED’s regulations. As more fully described in “Business – Regulatory Environment – Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – The ‘90/10 Rule’” for fiscal years beginning on or after January 1, 2023, federal educational assistance funds used to calculate the “90%” side of the ratio include Title IV funds, TA, and VA programs, and all other educational assistance funds provided by a federal agency directly to an institution or a student, including the federal portion of any grant funds provided by or administered by a non-federal agency, except for non-Title IV federal educational assistance funds provided directly to a student to cover expenses other than tuition, fees, and other institutional charges. The 90/10 Rule no longer permits institutions to count federal aid for veterans and service members as part of the “10%” side of the ratio. As a result, effective January 1, 2023, TA and VA benefits are included in the “90%” side of the ratio. ~~While~~On ~~each~~July of7, ~~our~~2025, ~~institutions~~ED ~~was~~issued inan ~~compliance~~interpretative ~~with~~rule ~~the~~that ~~90/10~~specifies ~~Rule~~that for-profit ~~2024,~~schools ~~with~~will ~~APUS’s~~be ~~relevant~~allowed ~~percentage~~to ~~for~~count ~~2024~~non-federal ~~being~~funds ~~89%,~~generated ~~there~~from isprograms nooffered ~~assurance~~entirely ~~that~~through wedistance ~~will~~education, ~~continue~~if tosuch beprograms ~~able~~satisfy tocertain ~~comply in future years~~criteria, ~~particularly~~as atnon-federal ~~APUS.~~revenue ~~The~~in ~~Combination~~their ~~(as~~90/10 ~~defined~~calculations, ~~below)~~and ismay ~~expected~~revise ~~to benefit~~ 90/10 Rule ~~compliance~~calculations ~~and~~for ~~other~~prior ~~regulatory~~fiscal ~~considerations;~~years ~~however,~~to ~~there~~include ~~can~~revenue befrom nodistance ~~assurance~~education ~~that~~programs in the ~~Combination~~“10%” ~~will~~side ~~have~~of the ~~expected benefits or when those benefits will be realized~~ratio.

AsWhile aeach ~~result~~ of ~~the~~our ~~problems~~institutions ~~with~~was ~~TA discussed~~ in ~~further~~compliance ~~detail~~with in the ~~Risk~~90/10 ~~Factor~~Rule ~~that~~for ~~begins “Our student registrations~~2025, ~~revenue,~~with ~~and~~APUS’s ~~cash~~relevant ~~flow~~percentage ~~have~~for ~~been~~2025 ~~adversely~~being ~~impacted...” below~~89%, ~~approximately~~there ~~$18.4~~is ~~million~~no inassurance ~~cash~~that ~~payments~~we ~~from~~will ~~the~~continue ~~Army~~ to ~~APUS that were expected to~~ be ~~received~~able ~~in 2021 and 2022 were received in 2023. This together with the January 1, 2023, change~~ to ~~the~~comply ~~90/10 Rule and enrollment growth among service members as compared to declines~~ in ~~students~~future ~~who use non-federal educational assistance funds~~years, ~~caused~~particularly at APUS’s. ~~90/10~~The ~~Rule percentage to increase.~~

5354

InCombination ~~September~~(as ~~2023,~~defined ~~APUS~~above) ~~changed~~is ~~its~~expected ~~approach~~ to ~~invoicing~~benefit ~~for~~90/10 TARule tocompliance ~~offset~~and ~~the~~other ~~effect~~regulatory ofconsiderations; ~~the receipt of the delayed payments from the Army. APUS took longer to bill TA~~however, ~~which~~there ~~had~~can ~~the~~be ~~effect~~no ofassurance ~~delaying into 2024 payments for TA~~ that ~~ordinarily~~the ~~would~~Combination ~~have~~will ~~been~~be ~~received~~completed inon ~~2023.~~its ~~APUS’s~~anticipated ~~change~~timeline inor ~~billing~~at ~~approach~~all, ~~resulted~~will ~~in approximately $22.1 million of receivables that we would~~ have ~~expected to receive in 2023 being received in 2024. The change in billing approach positively impacted~~ the ~~“90%”~~expected ~~side of the ratio in 2023. In January 2024~~benefits, ~~APUS~~or ~~separately~~when ~~revised~~those ~~its~~benefits ~~billing~~will ~~policy~~be ~~for students utilizing TA from two weeks to five weeks after course start date to nine weeks after the course start date~~realized. ~~The change in billing approach positively impacted the “90%” side of the ratio in 2024.~~

InAs ~~December~~a ~~2024,~~result ~~APUS~~of ~~implemented~~the ~~another~~circumstances ~~change~~with toTA ~~its~~discussed ~~approach~~in tofurther ~~invoicing~~detail ~~for~~in ~~TA,~~the ~~delaying~~Risk ~~into~~Factor ~~2025~~that ~~payments~~begins ~~for~~“Our TAstudent ~~that~~registrations, ~~ordinarily~~revenue, ~~would~~and cash flow have been ~~received~~adversely ~~in 2024~~impacted...” Webelow, ~~estimate that APUS’s change in billing approach resulted in~~ approximately $2618.4 million ~~of receivables that we would have expected to receive~~ in ~~2024~~cash ~~being~~payments ~~received~~from ~~in 2025. While~~ the ~~change~~Army into ~~billing~~APUS ~~approach~~that ~~positively~~were ~~impacted~~expected ~~the~~to ~~“90%”~~be ~~side~~received ~~of the ratio~~ in ~~2024,~~2021 itand ~~reduced~~2022 ~~operating~~were ~~cash~~received ~~flow~~ in ~~2024,~~2023. ~~may~~This ~~result~~together inwith ~~increased bad debt expense in 2025, and may cause~~ the ~~“90%”~~January ~~side of the ratio to increase in 2025 or future years~~1, ~~which could have an adverse impact on our cash flow and results of operations~~2023, aschange ~~well as APUS’s ability~~ to ~~comply with~~ the 90/10 Rule inand ~~2025~~enrollment orgrowth ~~future~~among ~~years.~~service ~~The~~members ~~change in billing practice added to our accounts receivable~~ as ofcompared ~~December 31, 2024, and resulted in an increase~~ to ~~our~~declines ~~leverage ratios as of December 31, 2024, under our Credit Agreement and the purchase agreement for the shares of Series A Senior Preferred Stock, each as defined and discussed~~ in ~~“Financial~~students ~~Statements~~who ~~and~~use ~~Supplementary Data – Notes to Consolidated Financial Statements – Note 9. Long~~non-~~term~~federal ~~Debt”~~educational ~~and~~assistance ~~“ – Note 13. Preferred Stock”. While we do not anticipate that a higher leverage ratio will have material limitations on our expected operations for 2025~~funds, itcaused ~~could~~APUS’s ~~result~~90/10 inRule ~~reduced~~percentage ~~operational~~to ~~flexibility in 2025 and future years~~increase.

In September 2023, APUS changed its approach to invoicing for TA, taking longer to bill TA, which had the effect of delaying payments from 2023 to 2024. Due to this change in the approach to invoicing TA in the fourth quarter of 2023, in 2024, APUS collected approximately $22.1 million from TA related to periods prior to 2024. The change in billing approach positively impacted the “90%” side of the ratio in 2023. In January 2024, APUS separately revised its billing policy for students utilizing TA from two weeks to five weeks after course start date to nine weeks after the course start date. The change in billing approach positively impacted the “90%” side of the ratio in 2024.

In December 2024, APUS again changed its approach to invoicing for TA, taking longer to bill TA, and, as a result of this change, in 2025, APUS collected approximately $32.5 million from TA related to periods prior to 2025. The change in billing approach positively impacted the “90%” side of the ratio and reduced operating cash flow in 2024. In 2025, the change in billing approach increased operating cash flow and bad debt expense. While the 90% side of the ratio remained consistent in 2025, the change in billing approach could have an adverse impact on our cash flow and results of operations, as well as APUS’s ability to comply with the 90/10 Rule in 2026. The change in billing practice added to our accounts receivable as of December 31, 2025, and resulted in an increase to our leverage ratio as of December 31, 2025, under our Credit Agreement as defined and discussed in “Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 9. Long-term Debt”. In July 2025, APUS again delayed billing to certain branches, further delaying payments until 2026. We estimate that this delay in APUS’s billing approach implemented beginning in July 2025 will result in approximately $34.1 million of receivables that we would have expected to receive in 2025 to be received in 2026.

As noted in the Risk Factor with the caption beginning “Government and regulatory agencies and third parties...”, ED is currently conducting a regular program review at APUS, which includes, among other things, a review of APUS’s compliance with the 90/10 Rule. APUS has not yet received a program review report from ED, and accordingly, at this time we cannot predict whether ED could have further feedback or findings on APUS’s 90/10 Rule compliance and related practices, whether as a result of the program review or otherwise.

We cannot predict whether Congress or ED will continue to modify the 90/10 Rule with respect to relevant sources of funds or other aspects of the calculation. For example, in recent years Congress has considered various other proposals that would modify the 90/10 Rule, including proposals to decrease the limit on Title IV funds from 90% to 85% or prohibit the use of federal funds to implement, administer, or enforce the 90/10 Rule. Such proposals, or other similar legislation, should they become law, could have a material ~~adverse~~ impact on the operations of our institutions. In addition, states have passed or may in the future pass, their own versions of the 90/10 Rule that like the new federal 90/10 Rule include TA and VA education benefits or other sources of funds in the “90%” side of the ratio. To the extent that any additional laws or regulations are adopted that further limit or condition the participation of for-profit schools or distance education programs in TA, VA education benefits programs, or in Title IV programs, or that further limit or condition the amount of TA, or VA education benefits for which for-profit schools or distance education programs are eligible to receive, our financial condition and results of operations could be materially and adversely affected.

For the past three years, RU has derived less than 80% and HCN has derived more than 80% of its total revenue on a cash accounting basis from Title IV programs and, as applicable, other federal educational assistance funds as calculated under ED’s modified regulations. If our institutions are unable to attract students who do not depend on Title IV program aid or TA or VA benefits, such as students who finance their own education or receive full or partial tuition reimbursement from non-government employers, their 90/10 Rule percentage may increase.

While each of our institutions was in compliance with the 90/10 Rule for ~~2024~~2025, there is no assurance that we ~~expect~~will ~~continued~~continue ~~challenges~~to ~~with~~be ~~compliance~~able ~~with~~to ~~the~~comply ~~90/10~~in ~~Rule~~future years, particularly at APUS. Enrollments at APUS from students who use TA and VA funds have been trending upward, while enrollments from students who use non-federal educational assistance funds continued to decline. This ismakes ~~making~~ it more difficult to satisfy the 90/10 Rule at APUS. In order to try and address the challenges with respect to 90/10 at APUS, we may pursue strategic transactions, including business combinations and acquisitions. Those transactions may not be successful or could cause disruption to our operations. For examples of some of the challenges that some types of strategic transactions could have, see the Risk Factors with the captions beginning with “The planned combination of APUS, RU, and HCN” and “Business combinations and acquisitions may be difficult to integrate …” below.

54strategic transactions could have, see the Risk Factors with the captions beginning with “The planned combination of APUS, RU, and HCN” and “Business combinations and acquisitions may be difficult to integrate …” below.

If any of our institutions fails to satisfy the 90/10 Rule and loses eligibility to participate in Title IV programs, it would also lose the ability to participate in TA because DoD requires institutions to participate in Title IV programs in order to participate in TA, and ineligibility of either or both of our institutions to participate in Title IV programs and TA would have a material adverse effect on our enrollments, revenue, results of operations, and cash flows. Similarly, failure of one of our institutions to meet the 90/10 Rule for any fiscal year would require the institution to notify ED and students of this failure, would result in the institution being on provisional status for two fiscal years, could subject the institution to heightened regulatory scrutiny and possible adverse regulatory action, and could damage the institution’s reputation, which would have a material adverse impact on our results of operation, cash flow, and financial condition. Failure of an institution to meet the 90/10 Rule for two consecutive fiscal years results in the institution becoming ineligible to participate in Title IV programs for at least two fiscal years, which would have a material adverse impact on our results of operation, cash flow, and financial condition.

~~DoD’s~~The ~~MOUs~~OBBBA ~~impose~~may ~~extensive~~adversely ~~regulatory~~impact ~~requirements~~us onor our ~~institutions~~students’ ~~with~~ability ~~respect~~ to ~~participation~~participate in ~~DoD~~federal TAstudent financial aid programs, ~~and~~which ~~our~~could ~~revenue~~have ~~and~~a ~~number~~significant ofadverse ~~students~~impact ~~would~~on ~~decrease~~enrollments ifand our ~~institutions were no longer able to receive funds under DoD TA programs or if TA is reduced~~business, ~~eliminated~~operations, orand ~~suspended~~financial results.

As ~~described~~discussed in “Business – Regulatory ~~Environment~~Actions –and ~~Student~~Restrictions ~~Financing~~on ~~Sources~~Operations ~~and~~– ~~Related~~Other Regulations~~/Requirements~~ – ~~Department~~The ofOne ~~Defense~~Big Beautiful Bill Act”, on July 4, 2025, President Trump signed into law the OBBBA, which, among other things, makes significant changes to federal student financial aid programs and ~~“Business~~eligibility –requirements ~~Regulatory~~for ~~Environment~~such –programs. ~~Compliance~~New ~~with~~caps ~~Regulatory~~on ~~Standards~~federal loans for graduate and ~~the~~professional ~~Effect~~students and parents of ~~Regulatory~~undergraduates ~~Violations~~may –limit ~~Compliance~~borrowing ~~Reviews”,~~options ~~each~~for ~~institution~~our ~~participating~~students inand TAthe isaccountability ~~party~~framework toand anrelated ~~MOU~~earnings intest amay ~~similar~~limit ~~form~~the ~~outlining~~availability of certain ~~commitments~~programs due to a potential loss of Direct Loan eligibility. On September 29, 2025, ED established the RISE Committee and ~~agreements~~initiated inthe ~~connection~~negotiated ~~with~~rulemaking ~~accepting~~process ~~funds~~for ~~from~~the TAOBBBA student loan provisions. ~~For~~On ~~example~~November 6, 2025, the ~~MOUs~~RISE ~~include~~Committee anreached ~~agreement~~consensus towith ~~participate~~ED inon proposed changes regarding the ~~DoD’s~~Repayment ~~ICP~~Assistance Plan, inincluding ~~order~~the totreatment ~~participate~~of inincome ~~TA.~~for Anborrowers ~~institution~~filing ~~that~~taxes isjointly ~~found~~and ~~noncompliant~~the ~~with~~minimum ~~DoD~~monthly ~~requirements~~loan ~~through~~payment, and the ~~ICP~~definition of “professional” student, among other changes. As discussed in greater detail in “Student Financing Sources and ~~demonstrates~~Related anRegulations/Requirements ~~unwillingness~~– toDepartment ~~resolve~~of aEducation ~~finding~~– ~~may~~Regulation beof ~~subject~~Title IV Financial Aid Programs – Gainful Employment Regulations”, on December 8, 2025, ED convened AHEAD and initiated the negotiated rulemaking process for the OBBBA accountability framework. On January 9, 2026, AHEAD reached consensus on proposed modifications to GE regulations. On January 30, 2026, ED published a ~~range~~notice of ~~penalties~~proposed ~~from~~rulemaking athat ~~written~~incorporated ~~warning~~the consensus language, and accepted public comments to ~~termination~~the notice of ~~the~~proposed ~~institution~~rulemaking until March 2, 2026. These changes may impact our students’s ~~participation~~ability to participate in TAfederal student loan programs, which may have a significant adverse impact on enrollments and our business, operations, and financial results.

The DoD’s ~~MOUs~~MOU ~~also~~imposes ~~provide~~extensive ~~that~~regulatory anrequirements ~~institution~~on ~~may~~our ~~only~~institutions ~~participate in TA if it is accredited by an accrediting agency recognized by ED, approved for VA funding, and a participant in Title IV programs. Failure to comply~~ with anrespect ~~MOU could result in an institution losing its ability~~ to ~~participate~~participation in ~~TA. We also believe that in certain circumstances~~ DoD ~~may impose sanctions for a failure to comply instead of denying an institution the ability to participate in~~ TA, ~~including restricting student enrollment in TA~~ programs, ~~suspending~~and anour ~~institution~~revenue ~~from~~and ~~enrolling~~number ~~new~~of students, ~~limiting~~would ~~access~~decrease toif ~~military~~our ~~installations,~~institutions ~~subjecting~~were ~~the~~no ~~institution~~longer toable ~~heightened compliance oversight, or otherwise limiting an institution’s ability~~ to ~~participate~~receive infunds ~~TA.~~under ~~In February 2025, ICP notified APUS that it will conduct a review of APUS compliance with the~~ DoD ~~MOU.~~TA Ifprograms anor ~~institution~~if ~~fails~~TA tois ~~comply with the requirements of an MOU~~reduced, ~~it could result in sanctions~~eliminated, upor ~~to losing the ability to participate in TA, that could have a significant adverse effect on our results of operations and financial condition~~suspended.

~~Students~~As ~~participating~~described in TA“Business ~~constituted~~– ~~approximately~~Regulatory ~~46%~~Environment – Student Financing Sources and Related Regulations/Requirements – Department of ~~APUS’s~~Defense” ~~adjusted~~and ~~net~~“Business ~~course~~– ~~registrations~~Regulatory ~~for~~Environment ~~2024.~~– WeCompliance dowith ~~not~~Regulatory ~~know~~Standards and the ~~scale~~Effect orof ~~nature~~Regulatory ofViolations ~~future~~– ~~actions~~Compliance ~~that~~Reviews”, ~~may~~each beinstitution ~~taken~~participating ~~with~~in ~~respect~~TA is party to ~~TA,~~an ~~which~~MOU ~~could~~in ~~include~~a ~~eliminating~~similar ~~those~~form ~~programs,~~outlining ~~reducing~~certain ~~the~~commitments and agreements in connection with accepting funds, ~~benefits~~from TA. For example, orthe ~~level~~DOD ofMOU ~~reimbursement~~includes ~~available~~an ~~thereunder,~~agreement ~~changing~~to participate in the ~~eligibility~~DoD’s ~~criteria~~Voluntary ~~for~~Education ~~beneficiaries~~Institutional Compliance Program, ~~enacting~~or ~~new~~ICP, ~~restrictions~~in onorder ~~institutional~~to ~~participation,~~participate orin ~~imposing~~TA. ~~other~~An ~~eligibility~~institution ~~criteria~~that onis ~~institutions,~~found ~~all~~noncompliant ofwith ~~which~~DoD ~~could~~requirements ~~impact~~through ~~enrollments~~the ~~from~~ICP ~~service~~and ~~members.~~demonstrates ~~Other~~an ~~administrative~~unwillingness ~~changes~~to resolve a finding may be subject to ~~DoD~~a ~~programs~~range ~~could~~of ~~also~~penalties ~~have~~from ~~negative~~a ~~effects~~written onwarning ~~our~~to ~~enrollments~~termination of the institution’s participation in TA.

The DoD MOU also provides that an institution may only participate in TA if it is accredited by an accrediting agency recognized by ED, approved for VA funding, and a participant in Title IV programs. Failure to comply with the DoD MOU could result in an institution losing its ability to participate in TA. We also believe that in certain circumstances DoD may impose sanctions for a failure to comply instead of denying an institution the ability to participate in TA, including restricting student enrollment in TA programs, suspending an institution from enrolling new students, limiting access to military installations, subjecting the institution to heightened compliance oversight, or otherwise limiting an institution’s ability to participate in TA. In February 2025, ICP notified APUS that it would conduct a review of APUS’s compliance with the DoD MOU. On May 14, 2025, DoD issued a report that informed APUS that the review had been completed with no findings. If an institution fails to comply with the requirements of an MOU, it could result in sanctions, up to losing the ability to participate in TA, that could have a significant adverse effect on our results of operations and financial condition.

Students participating in TA constituted approximately 41% of APUS’s adjusted net course registrations for 2025. We do not know the scale or nature of future actions that may be taken with respect to TA, which could include eliminating those programs, reducing the funds, benefits, or level of reimbursement available thereunder, changing the eligibility criteria for beneficiaries, enacting new restrictions on institutional participation, or imposing other eligibility criteria on institutions, all of which could impact enrollments from service members. Other administrative changes to DoD programs could also have negative effects on our enrollments.

There have been previous changes to eligibility requirements under TA that have impacted us, and additional changes that impact us could occur in the future. Additional changes to TA could occur due to Congressional action or DoD policy and funding changes. For example, the failure of Congress to pass appropriations legislation has limited the release of funds at times in the past and could do so in the future as well, including as a result of budget disputes related to the federal debt ceiling. Annual TA funding is limited and could be exhausted in any given year due to budget constraints or changes in demand or policy. We are unable to predict whether and to what extent the Armed Forces will impose limitations on TA approvals in the future as a result of limited funding. Furthermore, we expect each military branch and the DoD to continually evaluate their approaches to education, including by launching or expanding their own institutions, as discussed in further detail in the Risk Factor that begins “Continued strong competition in the postsecondary education market...” above, and such actions could have an impact on the funds available to service members to pursue their education at our institutions. Changes in funding allocations could have a material adverse effect on APUS’s enrollments.

If we are no longer able to receive funds from TA, or if those programs are modified, reduced, eliminated, or temporarily suspended, our enrollments, revenue, and cash flow could be significantly reduced, which would result in a material adverse effect on our results of operations and financial condition. See also the Risk Factor captioned “Our student registrations, revenue, and cash flows have been adversely impacted and we could experience additional adverse impacts as a result of the Army’s transition to new systems for soldiers to request TA” below.

HLC could identify deficiencies during its mid-cycle comprehensive evaluation of APUS and take adverse action against APUS based on such deficiencies.

~~HLC~~In ~~conducted~~2023, APUS transitioned from the Open Pathway designation to the Standard Pathway designation because of the decision to conduct a focused visit ~~at APUS~~ in March 2024 ~~after~~due ~~HLC~~to ~~raised potential~~ concerns regarding ~~APUS’s~~course ~~compliance~~availability ~~with~~in ~~standards~~one ~~related to~~ program. ~~development~~Under ~~oversight~~the ~~and~~Standard ~~program~~Pathway, ~~assessment~~APUS ~~processes~~is assubject to a ~~result~~mid-cycle ofcomprehensive ~~certain~~evaluation. ~~courses~~For ~~not~~more ~~being~~details ~~available~~on ~~for~~this ~~students~~evaluation inand ~~one~~related ~~program.~~details Ininvolving ~~June~~the ~~2024~~Combination, ~~HLC~~see ~~affirmed~~“Business ~~that~~– ~~APUS~~Regulatory ~~addressed~~Environment ~~all~~– ~~concerns~~Accreditation ~~regarding~~– ~~compliance~~Institutional ~~with~~Accreditation.” ~~HLC~~We ~~standards.~~cannot ~~However,~~be ~~pursuant~~sure tothat HLC ~~policy,~~will ~~APUS~~not ~~transitioned~~identify ~~from~~deficiencies at APUS during the ~~Open~~mid-cycle ~~Pathway~~comprehensive toevaluation ~~the~~site visit or call for negative accreditation-related action against APUS as a result.

55ED’s gainful employment requirements could materially and adversely affect our business.

~~Standard~~As ~~Pathway~~discussed ~~because~~in ofgreater ~~the~~detail ~~decision~~in to“Business ~~conduct~~– aRegulatory ~~focused~~Environment ~~visit.~~– AsStudent aFinancing ~~result~~Sources and Related Regulations/Requirements – Regulation of ~~this~~Title ~~transition~~IV Financial Aid Programs – Gainful Employment Regulations”, ~~APUS~~GE isregulations, ~~subject~~effective July 1, 2024, establish an accountability framework to adetermine ~~mid-cycle~~the ~~comprehensive~~Title ~~evaluation.~~IV ~~For~~eligibility ~~more~~of ~~details~~GE programs based in part on ~~this~~satisfaction ~~evaluation~~of ~~and~~specified ~~related~~performance ~~details~~levels ~~involving~~of two measures defined by the ~~Combination,~~GE ~~see~~regulations: ~~“Business~~the –debt-to-earnings ~~Regulatory~~rates ~~Environment~~(which –include ~~Accreditation~~two –rates, ~~Institutional~~the ~~Accreditation.”~~discretionary Wedebt-to-earnings ~~cannot~~rate beand ~~sure~~the ~~that~~annual ~~HLC~~debt-to-earnings ~~will~~rate) ~~not~~and ~~identify~~the ~~deficiencies~~earnings atpremium ~~APUS~~measure. ~~during~~The ~~the~~OBBBA ~~mid-cycle~~also ~~comprehensive~~establishes ~~evaluation~~an ~~site~~accountability ~~visit~~framework, oreffective ~~call~~July ~~for~~1, ~~negative~~2026, ~~accreditation-related~~that ~~action~~will ~~against~~require ~~APUS~~institutions asto asatisfy ~~result~~the OBBBA earnings test.

On December 8, 2025, ED convened AHEAD and initiated the negotiated rulemaking process for the OBBBA accountability framework. On January 9, 2026, AHEAD reached consensus with ED on proposed modifications to GE regulations that would eliminate debt-to-earnings rates, change student warning requirements, limit the consequences for failing GE the earnings premium measure, and add an appeal process for programs that lose Title IV eligibility under this framework. Further, under the consensus language, an institution would lose Pell grant eligibility for a program if at least half of the institution’s ~~new~~Title ~~gainful~~IV ~~employment~~recipients ~~requirements~~or ~~could~~half ~~materially~~of an institution’s Title IV funds come from failing programs. On January 30, 2026, ED published a notice of proposed rulemaking that incorporated the consensus language, and ~~adversely~~accepted ~~affect~~public ~~our~~comments ~~business~~to the notice of proposed rulemaking until March 2, 2026. We cannot predict the language to be included in the final rule, or if a final rule will go into effect.

~~Pursuant~~The tocurrent ~~new~~ GE regulations, ~~that~~will ~~took~~remain in effect ~~July~~until 1,a ~~2024,~~final EDrule ~~will~~implementing ~~determine~~ the ~~Title~~AHEAD IVconsensus ~~eligibility~~language is effective and the effective date of the OBBBA accountability framework. Under the current GE regulations, programs ~~based~~that infail ~~part~~to onsatisfy ~~satisfaction~~the of specified performance levels of ~~two~~the GE measures ~~defined~~in bytwo ~~the~~of GEany ~~regulations:~~three successive years for which the debt-to-earnings rates ~~(which~~or ~~include~~the ~~two~~earnings ~~rates,~~premium ~~the~~measure ~~discretionary~~are ~~debt-~~calculated will lose access to~~-earnings~~ ~~rate~~Title ~~and~~IV ~~the~~funding. ~~annual~~At ~~debt-to-earnings~~this ~~rate)~~time, ~~and~~it ~~the~~is ~~earnings~~difficult ~~premium~~to ~~measure.~~predict

Programs that fail to satisfy the specified performance levels of the GE measures in two of any three successive years for which the debt-to-earnings rates or the earnings premium measure are calculated will lose access to Title IV funding. Institutions will generally be required to report certain information used to calculate these measures to ED by July 31 of each year, provided that for 2024, ED has extended the deadline numerous times, most recently to September 30, 2025. We expect that the earliest a program could lose eligibility is July 1, 2026, based on the effective date of the regulations, though ED has delayed its assessment and publication of relevant data. We expect that the earliest a program could lose eligibility is July 1, 2026. In addition, programs that fail any of the metrics in a year will be required to warn enrolled and prospective students that the program risks losing access to Title IV funding. At this time, it is difficult to predict whether our institutions’ programs will satisfy performance levels of GE metrics, including whether the programs will fail or pass.57

whether our institutions’ programs will satisfy current GE performance levels should ED calculate the GE measures. Though ED has released PPD that include calculations of the GE earning premium measure and debt-to-earnings rates and the OBBBA earnings test, PPD are of limited use because ED has not used the methodology it will use under the current GE regulations or the OBBBA accountability framework, primarily due to data limitations. Accordingly, it is difficult to predict the impact, if any, current GE regulations or the OBBBA accountability framework may have on our institutions.

Failure to improve certain of our programs’ NCLEX pass rates and to more generally satisfy NCLEX requirements could reduce our enrollments, revenue, and cash flow, lead to adverse actions taken by state boards of nursing, and limit our ability to offer educational programs.

The majority of RU’s graduates, HCN graduates, and certain APUS graduates seek professional licensure, employment or other outcomes in their chosen fields following graduation, particularly in nursing. Their success in obtaining these outcomes depends on numerous factors, including (i) individual merits of the graduate,; (ii) whether the institution and the program were approved by the state in which the graduate seeks licensure, or by a professional association,; (iii) whether the program meets all state requirements for professional licensure,; and (iv) the accreditation of the institution and the specific program. Failure to satisfy NCLEX pass rate requirements imposed by state boards of nursing can result in the state boards of nursing and other regulators taking certain adverse actions, including placement of a program on provisional approval status or withdrawal of approval pursuant to an adjudication proceeding, and NCLEX exam pass rate requirements could limit our institutions’ ability to expand into new geographies.

As discussed more fully in “Business – Regulatory Environment – State Authorization/Licensure – State Authorization/Licensure of Our Institutions”, ~~certain~~each ~~programs~~of atthe ~~certain~~ RU ~~campuses~~PN and inBSN ~~certain~~programs ~~states~~met ~~have~~their ~~not~~respective ~~met~~ state-established first-time NCLEX benchmarks ~~for~~based ~~consecutive~~on ~~years.~~the As2025 aresults. ~~result,~~Three ~~regulators~~of ~~and~~the ~~accreditors~~RU ~~have~~ADN ~~in some cases placed these~~ programs ondid ~~probationary~~not ormeet ~~similar~~the ~~status~~benchmarks, orresulting ~~required~~in ~~them~~one toprogram continuing ~~take~~its mandated corrective action,. If ~~including limiting, or taking action that has~~ the ~~effect~~affected ofprogram ~~limiting,~~is ~~enrollment.~~unable Weto ~~believe~~improve ~~that~~its ~~low~~NCLEX ~~pass~~score ~~rates~~by ~~may be~~ the ~~result~~Board of aNursing-imposed ~~number of factors~~deadline, ~~including~~this ~~without~~could ~~limitation~~adversely ~~the academic preparedness of~~ affect our ~~students,~~ability ~~curriculum~~to ~~gaps,~~continue ~~changes~~offering in the ~~mode~~ADN ofprogram ~~course~~at ~~delivery~~that ~~including~~campus. ~~the~~In ~~use of virtual courses~~addition, ~~testing~~other ~~failures~~negative ~~and~~impacts ~~inconsistencies~~could result, ~~imbalances~~including indamage ~~enrollment~~to our ~~and~~reputation ~~resources,~~ and ~~changes~~making init ~~admission~~more ~~standards.~~difficult Weto ~~are~~recruit ~~taking~~students ~~action~~who ~~aimed~~are atlikely ~~helping~~to ~~prepare~~succeed. ~~students~~The ~~and~~success ~~graduates~~of ~~for successful performance on~~ the ~~NCLEX~~majority ~~exam~~of ~~and~~programs ~~improving~~demonstrates ~~NCLEX~~the ~~pass~~impact ~~rates~~of ~~and~~targeted ~~meeting~~intervention ~~related standards, including programmatic certification improvement~~ plans ~~at RU,~~ and ~~curriculum,~~student-readiness initiatives; ~~academic achievement~~however, implementation and ~~course~~execution ~~retake~~of ~~policy~~new ~~changes~~academic atresources ~~HCN,~~in ~~and~~2025 ~~results for certain programs~~ have presented ~~shown~~challenges ~~significant~~across ~~improvement,~~all ~~but~~programs. These ~~there~~challenges ~~can~~required ~~be no assurance that our actions or will not have negative effects on~~ RU’s orto ~~HCN’s~~make ~~enrollment~~academic orpolicy ~~that~~decisions ~~we have accurately identified the underlying reasons for low pass rates or~~ that ~~our~~affected ~~efforts~~student toprogression. ~~improve~~As ~~pass~~a ~~rates~~result, ~~will~~both ~~succeed~~NCLEX inreadiness aand ~~timely~~outcomes ~~fashion,~~were ifimpacted atas ~~all,~~students oradvanced ~~persist~~through to the ~~extent~~program ~~they~~under ~~have~~these ~~been~~new orconditions. RU ~~may~~is befocused ~~successful.~~on Ifachieving ~~affected~~stronger ~~programs~~consistency ~~are~~and ~~unable~~improved tofirst-time ~~improve~~ NCLEX ~~scores~~pass ~~over~~rates ~~time, and~~ in ~~some~~2026 ~~cases~~ by ~~the~~(i) ~~deadlines~~strengthening ~~imposed~~readiness onstrategies ~~programs~~ at ~~certain~~both ~~campuses~~early and inlate ~~certain~~stages ~~states~~of asthe ~~discussed above~~program, ~~this~~(ii) ~~situation~~sustaining ~~could~~academic ~~have~~support anand ~~adverse~~accountability ~~impact~~through ondata-driven ~~their~~decision-making, ~~ability to enroll students~~ and ~~eventually~~(iii) ~~our~~prioritizing ~~ability to continue offering~~ the ~~ADN~~evaluation ~~programs~~of atinstructional ~~the~~quality ~~applicable~~and ~~campuses.~~delivery Inacross ~~addition~~didactic, ~~merely~~simulation, ~~being~~and ~~subject~~clinical toearning ~~disciplinary~~environments, ~~probationary, or similar status or requirements could make it more difficult~~ to ~~improve~~achieve ~~NCLEX~~consistent ~~pass rates or meet other applicable standards, such as by damaging our reputation~~ and ~~making~~repeatable itpractices ~~more~~that ~~difficult to recruit students who are likely to succeed. Any voluntary, required, or other reduction in enrollment will have an adverse~~ impact onstudent ~~our revenue~~learning.

Although variability in regulator and accreditor approach to and use of discretion in enforcement of NCLEX pass rate standards makes it difficult to predict consequences, failure to abide by the terms of any restrictive status placed on these programs, take appropriate corrective action, or reach applicable threshold rates within a required timeframe could subject impacted programs to additional adverse action, including withdrawal of approval, and we could take voluntary action to curtail or terminate affected programs, any of which would have an adverse effect on our results of operations, cash flows, and financial condition. Even if the affected programs have long-term success in complying with NCLEX pass rate standards, the actions we take to comply could result in increased costs or decreased enrollments, and goodwill impairment.

RU’s Illinois ADN program was previously adversely impacted by regulatory action, including as a result of the failure to meet applicable NCLEX pass rates, and further action by regulators and accreditors could result in additional adverse impacts.

As discussed more fully in “Business – Regulatory Environment – State Authorization/Licensure – State Authorization/Licensure of Our Institutions”, RU’s Illinois ADN program had not met state-established first-time NCLEX benchmarks for three consecutive years. In February 2022, RU’s Illinois ADN program was placed on probationary status by Illinois Department of Financial and Professional Regulation, or IDFPR, as a result of which RU was required to temporarily reduce admitted students in the program by 25% and was given two years to demonstrate evidence of implementing strategies to correct deficiencies and satisfy the required NCLEX pass rate. The State of Illinois enacted legislation ~~that,~~ effective January 1, 2024, that changed the Illinois NCLEX pass rate requirements from a one-year measurement based on first attempts only to include a three-year average that includes all test attempts, and temporarily removed all nursing programs, including RU’s Illinois ADN program, from probationary status until September 2026. ~~IDFPR published a list of approved nursing programs, which included~~ RU’s Illinois ADN program ~~without~~is ~~reference~~currently toapproved; ~~probation~~however, ~~but~~Illinois itDepartment ~~did~~of ~~acknowledge~~Financial ~~the~~and ~~program’s~~Professional ~~low~~Regulation, ~~pass~~or ~~rate~~IDFPR, ~~for~~has ~~two~~publicly ~~consecutive~~reported ~~years.~~that ~~There~~RU’s ~~can~~Illinois beADN noprogram ~~assurance~~has ~~that IDFPR will~~ not ~~seek to impose different or additional requirements in connection with this change in legislation.~~

met the required NCLEX pass rate for the prior six years. There can be no assurance that IDFPR will not seek to impose different or additional requirements prior to September 2026 as a result of failures to satisfy the required NCLEX pass rate, and it is unknown what actions IDFPR may take regarding RU’s Illinois ADN program after September 2026, which could include reinstatement of probationary status or withdrawal of approval.

The inability of our institutions’ graduates to obtain professional licensure, employment, or other outcomes in their chosen fields of study, particularly in nursing, could reduce our enrollments and revenue, limit our ability to offer educational programs, and potentially lead to litigation that could be costly to us.

Certain ~~APUS~~ graduates seek professional licensure, employment or other outcomes in their chosen fields following graduation, particularly in nursing. State requirements for licensure are subject to change, as are professional certification standards, and we may not become aware of changes that may impact our students in certain instances. In addition, as further discussed in “Business – Regulatory Environment – State Licensure/Authorization – Federal Requirements for State Authorization/Licensure - State Authorization and Professional Licensure”, ED regulations require institutions that offer postsecondary education programs leading to employment in an occupation that requires licensure or certification to meet certain additional requirements in order for those programs to maintain eligibility to participate in Title IV programs. In each state in which the institution is located, in which students enrolled in distance education are located, orand where a student enrolled after July 1, 2024, attests that they intend to seek employment, the program must satisfy the applicable state education requirements for professional licensure or certification so that a student seeking employment may qualify to take any licensure or certification exam needed to practice or find employment in the state. In the event that one or more states refuse to recognize our institutions’ students for professional licensure based on factors relating to our institutions or programs, the potential and actual growth of our institutions’ programs would be negatively impacted, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Further, requirements for employment vary from employer to employer and from field to field. To the extent our graduates fail to satisfy requirements for employment by particular employers or in a particular profession based on characteristics of our programs, the ability to maintain enrollments, as well as the potential for growth of our institutions’ programs would be negatively impacted, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. In addition, if our institutions’ graduates fail to obtain professional licensure, employment, or other outcomes in their chosen fields of study, we and our institutions could be exposed to litigation, including class-action litigation, claiming that we are at fault for such failure, which would force us to incur legal and other expenses that could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

A failure of HCN to satisfy ABHES accreditation standards, including specific student achievement indicators, could have a material adverse impact on HCN’s student enrollment, revenue, results of operations, and cash flows.

ABHES annually reviews student achievement indicators, including retention rate, placement rate, and licensing and credentialing examination pass rate. Under ABHES policy, ABHES may withdraw accreditation at any time if it determines that an institution fails to demonstrate at least a 70% retention rate for each program, a 70% placement rate for each program, and a 70% first-time pass rate on mandatory licensing and credentialing examinations or fails to meet the state-mandated results for credentialing or licensure. Alternatively, ABHES may in its discretion provide an opportunity for a program to come into compliance within a period of time specified by ABHES, and ABHES may extend the period for achieving compliance if a program demonstrates improvement over time or for other good cause.

57As more fully described in “Business – Regulatory Environment – Accreditation – Institutional Accreditation”, in prior years, several HCN programs at certain HCN campuses have failed to satisfy ABHES’ student achievement measures, and, as a result, ABHES has placed certain locations and programs on program-specific warning or outcomes reporting status and required action plans. If ABHES determines that HCN’s response to the program-specific warning status is insufficient, it could take action that could have an adverse impact on our results of operations, cash flow, and financial condition, including limiting program enrollment, suspending program enrollment and new starts until HCN meets terms and conditions established by ABHES, or withdraw approval for one or more programs. HCN is also required to disclose the program-specific warnings to current and prospective students, which could adversely affect HCN’s reputation and enrollments.

~~credentialing~~If any HCN campus or ~~licensure.~~program ~~Alternatively,~~fails ~~ABHES~~to ~~may~~satisfy inABHES ~~its~~achievement ~~discretion~~measures, ~~provide~~enrollment anat ~~opportunity~~such ~~for~~HCN acampus or program could decline, or we could be forced to ~~come~~cease ~~into~~enrollments ~~compliance~~at ~~within~~that campus or in that program, which could have a ~~period~~material ofadverse ~~time~~impact ~~specified~~on byHCN’s ~~ABHES~~student enrollment and our and HCN’s revenue, results of operations, and cash flows. The actions HCN takes to comply with ABHES requirements may ~~extend~~not ~~the~~be ~~period~~successful ~~for~~in ~~achieving~~resolving ~~compliance~~existing issues and, if athose ~~program~~actions ~~demonstrates~~are ~~improvement~~targeted ~~over~~at ~~time~~specific campuses or ~~for~~programs, ~~other~~they ~~good~~may ~~cause.~~fail to prevent additional issues arising with respect to those or other

As more fully described in “Business – Regulatory Environment – Accreditation – Institutional Accreditation”, in prior years, several HCN programs at certain HCN campuses have failed to satisfy ABHES’ student achievement measures, and as a result, ABHES has placed certain locations and programs on program-specific warning or outcomes reporting status and required action plans. If ABHES determines that HCN’s response to the program-specific warning status is insufficient, it could take action that could have an adverse impact on our results of operations, cash flow, and financial condition, including limiting program enrollment, suspending program enrollment and new starts until HCN meets terms and conditions established by ABHES, or withdraw approval for one or more programs. HCN is also required to disclose the program-specific warnings to current and prospective students, which could adversely affect HCN’s reputation and enrollments.59

If any HCN campus or program fails to satisfy ABHES achievement measures, enrollment at such HCN campus or program could decline, or we could be forced to cease enrollments at that campus or in that program, which could have a material adverse impact on HCN’s student enrollment and our and HCN’s revenue, results of operations, and cash flows. The actions HCN takes to comply with ABHES requirements may not be successful in resolving existing issues and, if those actions are targeted at specific campuses or programs~~, they may fail to prevent additional issues arising with respect to those or other campuses or programs~~. Similarly, even if HCN is successful in the long term in complying with these standards, the actions HCN takes to comply could result in increased costs or decreased enrollments, and impairment of HCN goodwill.

If our institutions fail to maintain state authorization in the states where they are physically located, the institutions would lose their ability to grant degrees and other credentials ~~in that state~~ and to participate in Title IV programs and DoD TA programs.

As discussed in “Business – Regulatory Environment – State Licensure/Authorization”, to participate in Title IV programs and TA, an institution must be legally authorized by the relevant education agency of the state in which its main campus is physically located, and, in the case of APUS, West Virginia. Loss of “home state” authorization by one of our institutions ~~in the state in which its main campus is physically located~~ would render that institution unable to participate in Title IV programs, and therefore also TA and VA, to operate in the state and grant credentials, and to maintain institutional accreditation. If one of our institutions were to lose state authorization as to a non-main campus location, it would be unable to award Title IV aid to students at that location, and it would be unable to operate at that location.

ED regulations provide that an institution is considered legally authorized by a state if the state has a process to review and appropriately act on complaints concerning the institution, including enforcing applicable state laws, and the institution complies with any applicable state approval or licensure requirements. If a state in which one of our institutions is located fails in the future to satisfy the provisions of those regulations, our institutions’ ability to operate in that state and to participate in Title IV programs could be limited or terminated.

Our institutions’ failure to comply with the requirements of SARA or regulations of ED or various states related to state authorization could result in actions that would have a material adverse effect on our enrollments, revenue, and results of operations.

Various states impose regulatory requirements on educational institutions operating within their boundaries, including registration requirements applicable to online education institutions that have no physical location or other presence in the state but offer educational services to students who reside in the state or advertise to or recruit prospective students in the state. As described more fully in “Business – Regulatory Environment – State Authorization/Licensure”, APUS and RU must comply with the requirements of California, which is the only state that does not participate in State Agency Reciprocity Agreement, or SARA, and APUS, RU, and HCN must comply with SARA, with regard to the interstate offering of postsecondary distance education and online education. Those requirements may change from time to time and, in some instances, are ambiguous or are left to the interpretative discretion of state regulators. Changes in requirements to participate in SARA, including those approved by SARA’s coordinating entity, the board of directors of NC-SARA in October 2024, or changes to state laws and regulations and the interpretation of those laws and regulations may limit our ability to participate in the reciprocity agreements, offer education programs and award degrees. If one of our institutions were to fail to comply with such requirements, the institution could lose its ability to participate in SARA or may be subject to the loss of state licensure or authorization to provide distance education. If one of our institutions were to fail to comply with state requirements to obtain licensure or authorization, it could also be subject to injunctive actions or penalties. We cannot predict the extent to which states will retain membership in SARA, the manner in which SARA’s rules may be modified, interpreted, and enforced, our institutions’ ability to comply with SARA’s requirements and retain eligibility, or the impact that failure to meet the SARA requirements may have on our business.

58Changes in requirements to participate in SARA, including those policy changes approved by SARA’s coordinating entity, the NC-SARA, board of directors, or changes to state laws and regulations and the interpretation of those laws and regulations may limit our ability to participate in the reciprocity agreements, offer education programs and award degrees.

AsIf ~~more~~one ~~fully~~of ~~described in “Business – Regulatory Environment – State Licensure/Authorization”,~~ our institutions ~~are~~were ~~subject~~ to ~~regulations~~fail ~~that,~~to ~~among~~comply ~~other~~with ~~things~~such requirements, ~~clarify~~ the ~~required~~institution ~~methodology~~could ~~for~~lose ~~determining~~its ~~the~~ability ~~state~~to participate in ~~which~~SARA aor ~~student~~may isbe ~~located~~subject ~~for~~to ~~purposes~~the loss of ~~satisfying~~ state licensure or authorization ~~requirements~~to ~~for~~provide distance education. ~~courses~~If ~~and~~one ~~require~~of anour ~~institution~~institutions were to ~~disclose~~fail ~~certain~~to ~~information~~comply ~~related~~with state requirements to ~~whether~~obtain ~~programs~~licensure ~~leading~~or toauthorization, ~~professional~~it ~~licensure~~could ~~meet~~also ~~applicable~~be ~~state~~subject ~~requirements,~~to ~~regardless~~injunctive ofactions ~~program~~or ~~modality~~penalties. ~~Failure~~We tocannot ~~make~~predict the ~~disclosures~~extent ~~required~~to bywhich ~~these~~states ~~regulations~~will ~~could~~retain ~~put~~membership usin atSARA, ~~risk~~the ofmanner ~~administrative~~in ~~enforcement~~which ~~action~~SARA’s orrules ~~related~~may ~~litigation~~be modified, ~~including~~interpreted, ~~claims~~and ~~from~~enforced, ~~students~~our ~~related~~institutions’ ability to ~~misrepresentation~~comply ~~and~~with ~~other~~SARA’s ~~matters.~~requirements Inand ~~addition~~retain eligibility, weor ~~cannot~~the ~~predict~~impact ~~whether,~~that orfailure to ~~what~~meet ~~extent,~~the ~~such~~SARA ~~disclosure~~ requirements ~~will~~may have ~~an effect~~ on our ~~enrollment processes and results~~business.

Our institutions must periodically seek recertification to participate in Title IV programs, and may, in certain circumstances, be subject to review by ED prior to seeking recertification, and our future success may be adversely affected if our institutions are unable to successfully maintain certification or obtain recertification.

As more fully described in “Business – Regulatory Environment – Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Eligibility and Certification Procedures”, APUS, RU, and HCN must periodically seek recertification from ED to continue participation in Title IV programs, and ED may review our institutions’ eligibility and certification to participate in Title IV programs, or the scope thereof. However, also as described in the foregoing section, ED must in some cases provisionally certify an institution, which imposes additional conditions on the institution’s receipt of Title IV funds. For example, APUS and RU are currently provisionally certified with ED.

If our institutions are unable to successfully maintain certification, including provisional certification, or obtain recertification to participate in ED’s Title IV programs, they will not be able to participate in TA because each DoD MOU requires an institution to be certified to participate in Title IV programs in order to participate in TA. Similarly, an institution is required to be certified to participate in the Title IV programs in order to be eligible to participate in the VA education benefits programs. Loss of participation in Title IV programs, TA, and the VA education benefits programs would have a material adverse effect on our enrollments, revenue, results of operations, and financial condition.

requires an institution to be certified to participate in Title IV programs in order to participate in TA. Similarly, an institution is required to be certified to participate in the Title IV programs in order to be eligible to participate in the VA education benefits programs. Loss of participation in Title IV programs, TA, and the VA education benefits programs would have a material adverse effect on our enrollments, revenue, results of operations, and financial condition.

Our subsidiary institutions’ failure to meet financial responsibility standards may result in additional regulatory requirements that may negatively impact cash flow or the loss of eligibility by one of our institutions to participate in Title IV programs.

To participate in Title IV programs, an eligible institution must satisfy specific measures of financial responsibility prescribed by ED or post a letter of credit in favor of ED, and possibly accept other conditions, such as provisional certification, additional reporting requirements, or regulatory oversight of its participation in Title IV programs. As described in “Business – Regulatory Environment – Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Financial Responsibility”, ED’s annual evaluations for compliance with financial responsibility standards include a composite score calculation based on line items from an institution’s audited financial statements, and such composite score must be at 1.5 or above for the institution to be deemed financially responsible. A composite score between 1.0 and 1.4 is considered by ED to be in the “zone.” An institution in the “zone” may still participate in Title IV programs as a financially responsible institution through the “zone alternative” or the “financial protection alternative” as set forth in ED regulations.

OnIn ~~March~~April 42025, ~~2024,~~ ED notified us that according to its calculations, we had a ~~2022~~fiscal year end 2023 consolidated composite score of 1.13 and our institutions were therefore in the “zone.,” ~~We disagree with ED’s calculation~~ and conclusion and submitted a rebuttal to ED on March 18, 2024. On April 10, 2024, ED issued a response to our rebuttal, indicating that ED does not agree with our position and reiterating that our institutions must establish financial responsibility on an alternative basis. On April 17, 2024, we ~~timely informed ED that although we continue to disagree with its composite score methodology with respect to our deferred tax asset, we~~ selected the “zone alternative” as the alternative basis on which we establish financial responsibility. AsThereafter, ~~described~~APUS, ~~more~~RU ~~fully in “Business – Regulatory Environment – Student Financing Sources~~ and ~~Related~~HCN ~~Regulations/Requirements~~operated ~~– Department of Education – Regulation of Title IV Financial Aid Programs – Financial Responsibility”,~~ under the zone alternative, weto ~~must:~~establish ~~(i)~~financial ~~make~~responsibility, ~~Title~~which IVimposed ~~disbursements~~on ~~and~~us ~~pay~~certain ~~credit~~restrictions ~~balances~~and ~~before~~obligations, ~~requesting~~including orHCM1. ~~receiving~~On ~~funds~~March ~~from~~10, 2026, ED ~~for~~notified ~~those~~us ~~disbursements;~~that, ~~(ii)~~as ~~notify ED~~ of ~~certain~~such ~~events;~~date, ~~(iii)~~APUS, ~~provide~~RU, ~~regular~~and ~~reports~~HCN towere ~~ED;~~no ~~(iv)~~longer ~~require~~required ~~our auditors~~ to ~~opine~~comply ~~on our compliance~~ with the zone alternative requirements; ~~and~~due ~~(v)~~to ~~seek~~a ~~ED’s~~composite ~~prior~~score ~~approval~~for offiscal ~~new~~2024 ~~educational~~of ~~programs or locations~~2.6. IfHowever, ~~our~~there ~~institutions~~is ~~are~~no inassurance that the ~~zone~~composite ~~for~~score ~~three~~will ~~consecutive~~remain ~~fiscal~~at ~~years,~~or ~~then~~above 1.5 in the ~~fourth~~future ~~consecutive~~or ~~fiscal~~that ~~year~~if ~~they~~it ~~must~~falls ~~achieve~~in athe ~~composite~~“zone” ~~score~~in ofthe atfuture ~~least 1.5. If they do not achieve~~ that ~~score,~~we ~~they~~ will be ~~required~~able to ~~comply~~demonstrate ~~with~~financial ~~either~~responsibility. ~~the~~A ~~“provisional~~determination ~~certification~~that ~~alternative”~~we orare in the ~~“financial~~zone ~~protection~~has ~~alternative”~~resulted, asand acould ~~condition~~in ofthe ~~continued~~future ~~Title~~result, IVin ~~participation.~~additional ~~Although~~adverse ~~our~~regulatory ~~consolidated~~and ~~composite~~accreditor ~~score~~requirements, islimitations, ~~expected~~and toactions, beincluding ~~above~~with ~~1.5~~respect atto ~~December~~SARA ~~31,~~eligibility ~~2024,~~or ~~our~~action ~~next~~related ~~financial~~to ~~responsibility~~being ~~test,~~in ~~there~~the ~~is no~~ zone.

assurance that it will remain at 1.5 or above in the future or that if it falls in the “zone” in the future that we will be able to demonstrate financial responsibility.

The determination that we are in the zone could also result in additional adverse regulatory and accreditor requirements, limitations, and actions, including with respect to SARA, eligibility or as a result of SARA.

An obligation to post a letter of credit, or to accept other conditions, such as a change in our system of Title IV payment from ED for purposes of disbursement, as a result of not meeting financial responsibility standards, could increase our costs of regulatory compliance, or affect our cash flow.

For more on the financial responsibility requirements, please refer to “Business – Regulatory Environment – Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs”.

A failure to demonstrate “administrative capability” may result in the loss of eligibility to participate in Title IV programs.

As more fully discussed in “Business – Regulatory Environment – Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Administrative Capability”., ED’s regulations specify extensive criteria that an institution must satisfy to establish that it has the requisite administrative capability to participate in Title IV programs and the sanctions ED may impose if an institution fails to satisfy any of those criteria. If an institution fails to satisfy any of the administrative capability requirements, ED may require the repayment of Title IV program funds, transfer the institution from the “advance” method of payment of Title IV program funds to heightened cash monitoring status, or to the “reimbursement” method of payment, place the institution on provisional certification status, or commence a proceeding to impose a fine or to limit, suspend, or terminate the participation of the institution in Title IV programs, which would adversely affect our enrollment, revenue, results of operations, and financial condition.

ED rules related to BDTR claims may create significant liability that could have an adverse effect on our business and results of operations.

Under the HEA, ED is authorized to specify in regulations which acts or omissions of an institution of higher education a borrower may assert as a defense to repayment of a ~~loan under the~~ Direct Loan ~~Program, or a Direct Loan~~. As more fully described in “Business – Regulatory Environment – Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Borrower Defenses”, ED may initiate a proceeding to collect from an institution the amount of relief resulting from a borrower defense brought by an individual borrower. If ED determines that borrowers of Direct Loans ~~(or Direct Consolidation Loans made after July 1, 2023)~~ who attended our institutions have a defense to repayment of their Direct Loans, we could be subject to repayment liability to ED that could have a material adverse effect on our financial condition, results of operations, and cash flows. ~~However,~~The ~~the~~OBBBA ~~July~~delays 1,implementation ~~2023, effective date~~ of the 2022 Borrower Defense Regulations is currently enjoined nationwide by court order. As a result of the injunction, ED announced that while it will not adjudicate any borrower defense applications under the 2022 Borrower Defense Regulations unless and until ~~the~~July ~~effective date is reinstated~~1, ~~it will continue to adjudicate borrower defense applications under the 2016 Borrower Regulations and 2019 Borrower Defense Regulations if required pursuant to a court ordered settlement~~2035. ~~In 2022~~Accordingly, EDBDTR ~~joined~~regulations athat ~~class~~were ~~settlement agreement resulted~~ in aeffect ~~blanket~~on ~~grant~~July ~~of automatic~~1, ~~presumptive relief for all BDTR applications filed by students at certain institutions through June 22~~2020, ~~2022,~~have ~~but~~been ~~our institutions were not included in the blanket grant of relief~~reinstated. As discussed in “Business – Regulatory Environment – Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Borrower Defenses”, APUS, RU and HCN have received from ED BDTR claims for students seeking a discharge of loans dated after July 22, 2022. Each of the respective institutions disputes the validity of these claims and has filed responses to them with ED. Due to the 2022 Borrower Defense Regulations injunction we cannot predict whether the final regulations will result in regulatory changes that would harm our business, and we cannot predict, if the 2022 Borrower Defense Regulations are upheld, whether ED will grant BDTR relief for the claims, or if so, whether it will seek recoupment from our institutions. However, if in the future our institutions are subject to ED recoupment actions, our business, reputation, enrollments, and financial condition may be adversely impacted.

~~The postsecondary education regulatory environment has changed and may change in the future as a result of U.S. federal elections.~~61

~~Changes~~Defenses”, inAPUS, ~~Presidential~~RU, ~~administrations~~ and ~~control~~HCN ofhave ~~Congress~~received asfrom ED BDTR claims for students seeking a ~~result~~discharge of loans. Each of the ~~outcome~~respective institutions disputes the validity of ~~elections~~these orclaims ~~other~~and ~~events~~has ~~could~~filed ~~result~~responses into ~~changes~~them inwith orED. ~~new~~We ~~legislation,~~cannot ~~appropriations,~~predict ~~regulations,~~whether ~~standards,~~ED ~~policies~~will ~~and~~grant ~~enforcement~~BDTR ~~actions~~relief ~~that~~for ~~could~~the ~~materially~~claims, ~~affect~~or ~~our~~if ~~business~~so, ~~including~~whether ~~material~~it ~~consequences~~will ~~for~~seek recoupment from our institutions’. ~~accreditation~~However, ~~authorization~~if toin ~~operate~~the infuture ~~various~~our ~~states,~~institutions ~~permissible~~are ~~activities,~~subject ~~receipt~~to ofED ~~funds~~recoupment ~~under~~actions, ~~student~~our ~~financial~~business, ~~assistance~~reputation, ~~programs~~enrollments, and ~~cost~~financial ofcondition ~~doing~~may ~~business.~~be adversely impacted.

60The postsecondary education regulatory environment has changed and may change in the future as a result of United States federal elections.

~~The~~Changes ~~Trump~~in ~~administration~~Presidential administrations and ~~current~~control of Congress ~~may~~as ~~act~~a toresult ~~change~~of orthe ~~eliminate~~outcome ~~education-related~~of ~~legislation~~elections ~~and~~or EDother ~~regulations,~~events ~~and~~have toin ~~enact~~the ~~new~~past ~~legislation~~resulted ~~to alter existing regulations~~ and could ~~act~~in tothe ~~change~~future ~~existing~~result EDin ~~policies~~changes ~~and~~in ~~practices~~or ~~with~~new ~~respect~~legislation, toappropriations, ~~matters~~regulations, ~~related~~standards, topolicies ~~postsecondary education institutions. President Trump~~ and ~~members~~enforcement ofactions ~~his~~that ~~administration~~could ~~have~~materially ~~also~~affect ~~stated~~our ~~that~~business, ~~the~~including ~~administration~~material ~~intends~~consequences tofor ~~dismantle~~our EDinstitutions’ accreditation, ~~limiting~~authorization ~~its functions~~ to ~~only~~operate ~~those~~in ~~that~~various ~~are~~states, ~~statutorily~~permissible ~~required~~activities, orreceipt ~~transferring oversight~~ of ~~certain~~funds ~~functions~~under tostudent ~~other~~financial ~~agencies.~~assistance ~~In addition~~programs, ~~news~~and ~~reports~~cost ~~indicate~~of ~~that~~doing ~~an Executive Order to this effect is reportedly pending~~business. WeThe ~~cannot predict what actions the~~ Trump administration ~~will~~has ~~take~~acted ~~with~~and ~~respect~~may toact ~~the~~further ~~operations~~to ofchange, EDalter, or ~~the~~eliminate ~~response~~ED ofregulations ~~the~~and ~~staff~~to ofchange ED topolicies ~~any~~and ~~such~~practices ~~actions,~~with ~~nor~~respect ~~can~~to wematters ~~predict~~related ~~the extent~~ to ~~which~~postsecondary ~~the~~education ~~Trump~~institutions, ~~administration~~ and ~~Congress,~~the orcurrent ~~any future administration or~~ Congress, ~~will~~may act to change or eliminate oreducation-related tolegislation ~~implement~~and ~~new~~ED ~~laws,~~ regulations, ~~standards, policies,~~ and ~~practices,~~to ~~nor~~enact ~~can we predict the form that~~ new ~~laws,~~legislation ~~regulations, standards, policies, or practices may take or the extent~~ to ~~which~~alter ~~those~~existing regulations, practices or policies may impact us or our institutions or federal funds disbursed to schools through Title IV programs or TA. For example, even without changes being made to Title IV programs, more general changes or uncertainty at ED could cause disruptions or delays in the processing of Title IV or other necessary interactions with ~~ED.~~respect ~~Significant changes~~ to EDmatters orrelated to ~~federal~~postsecondary ~~regulation of higher~~ education ~~could have a material adverse impact on our enrollment, revenue, results of operations, and financial condition~~institutions.

President Trump and members of his administration have also stated that the administration intends to dismantle ED, limiting its functions to only those that are statutorily required or transferring oversight of certain functions to other agencies. On March 11, 2025, ED announced a reduction in force, or RIF, effective March 21, 2025, resulting in office, staff, and program cuts. ED has claimed the RIF will not directly impact students and families and will empower states and localities. On May 22, 2025, a federal judge ordered ED to reverse the RIF, which ED has appealed. On July 14, 2025, the order was stayed by the U.S. Supreme Court pending disposition of the appeal, thus allowing the RIF to proceed. Relatedly, on March 20, 2025, President Trump signed an Executive Order titled “Improving Education Outcomes by Empowering Parents, States, and Communities”, or the Executive Order, which, among other things, instructed the Secretary of Education to facilitate the closure of ED and maintain certain services, programs, and benefits, including student loans and Pell grants. We cannot predict the extent to which the RIF or the Executive Order will impact our results of operations and business, including as it relates to the Combination.

There were additional layoffs at ED in connection with the 2025 Shutdown, but we cannot predict what additional actions the Trump administration will take with respect to the operations of ED or the response of the staff of ED to any such actions. We also cannot predict the extent to which the Trump administration and Congress, or any future administration or Congress, will act to change or eliminate or to implement new laws, regulations, standards, policies, and practices, nor can we predict the form that new laws, regulations, standards, policies, or practices may take or the extent to which those regulations, practices or policies may impact us or our institutions or federal funds disbursed to schools through Title IV programs, TA, or VA programs, nor can we predict whether any challenges to actions taken by the Trump administration will be successful. For example, even without changes being made to Title IV programs, more general changes or uncertainty at ED could cause disruptions or delays in the processing of Title IV or other necessary interactions with ED. Significant changes to ED or to federal regulation of higher education could have a material adverse impact on our enrollment, revenue, results of operations, and financial condition.

A failure by our institutions to comply with ED’s incentive payment rule could result in sanctions and liability under the False Claims Act.

If one of our institutions pays a bonus, commission, or other incentive payment in violation of the HEA’s prohibition on such payments, commonly referred to as the incentive payment rule, the institution could be subject to sanctions, which could have a material adverse effect on our business. If ED determines that one of our institutions violated the incentive payment rule, it will calculate institutional liability for noncompliance by calculating the cost to ED of all Title IV funds improperly received by the institution and may require the institution to modify its payment arrangements to ED’s satisfaction. ED may also fine the institution or initiate action to limit, suspend, or terminate the institution’s participation in Title IV programs. ED may also seek to recover Title IV funds disbursed in connection with the prohibited incentive payments. As described in “Business – Regulatory Environment – Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Incentive Payment Rule”, changes in the interpretation of this prohibition may create uncertainty about what constitutes impermissible incentive payments and errors in the implementation of our compensation programs and arrangements may also lead to impermissible payments. Ambiguities as to how the incentive payment rule is interpreted also may influence our approach, or limit our alternatives, with respect to employment policies and practices and consequently may negatively affect our ability to recruit, retain, and motivate employees.

DoD MOUs requires that institutions participating in TA have policies in place that are compliant with regulations issued by ED related to restrictions on incentive payments. In addition, the Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act of 2020 bans incentive payments based on success in securing enrollments or financial aid with regard to VA benefits.62

InDoD ~~addition,~~MOUs ~~third~~require ~~parties~~that ~~may~~institutions ~~file~~participating ~~“qui~~in ~~tam”~~TA orhave ~~“whistleblower”~~policies ~~suits~~in onplace ~~behalf~~that ofare ~~the~~compliant ~~federal~~with ~~government~~regulations ~~under~~issued ~~the~~by ~~federal~~ED ~~False~~related ~~Claims~~to ~~Act~~restrictions ~~alleging~~on ~~violation of the~~ incentive ~~payment rule~~payments. ~~Such~~In ~~suits may prompt ED investigations~~addition, ~~and~~ the ~~federal~~Johnny ~~government~~Isakson ~~may~~and ~~determine~~David ~~to intervene in the lawsuits~~P. ~~Particularly in light of the uncertainty surrounding interpretation of the incentive payment rule~~Roe, ~~the~~M.D. ~~existence~~Veterans ~~of,~~Health ~~the~~Care ~~costs of responding to,~~ and ~~the~~Benefits ~~outcome~~Improvement Act of, ~~such~~2020 ~~suits~~bans orincentive EDpayments ~~investigations~~based ~~could have a material adverse effect~~ on ~~our~~success ~~reputation~~in ~~causing~~securing ~~our~~ enrollments toor ~~decline,~~financial ~~could~~aid ~~cause~~with usregard to ~~incur~~VA ~~costs that are material to our business, and could impact the ability of our institutions to participate in Title IV programs, among other things~~benefits. ~~As a result, our business could be materially and adversely affected.~~

In addition, third parties may file “qui tam” or “whistleblower” suits on behalf of the federal government under the federal False Claims Act alleging violation of the incentive payment rule. Such suits may prompt ED investigations, and the federal government may determine to intervene in the lawsuits. Particularly in light of the uncertainty surrounding interpretation of the incentive payment rule, the existence of, the costs of responding to, and the outcome of, such suits or ED investigations could have a material adverse effect on our reputation, causing our enrollments to decline, could cause us to incur costs that are material to our business, and could impact the ability of our institutions to participate in Title IV programs, among other things. As a result, our business could be materially and adversely affected.

Our institutions may lose eligibility to participate in Title IV programs if their student loan default rates are too high, and our future growth could be impaired as a result.

As described more fully under “Business – Regulatory Environment – Student Financing Sources and Related Regulations/ Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Student Loan Defaults” and “ – Cohort Default Rate”, if ~~the~~an institution’s cohort default rate for any year exceeds 40% in any single year, or exceeds 30% for three consecutive years, anthat institution loses eligibility to participate in Title IV programs. If an institution’s cohort default rate equals or exceeds 30% for any given year, it must establish a default prevention task force and develop a default prevention plan with measurable objectives for improving the cohort default rate.

In September ~~2024~~2025, ED released final official cohort default rates for institutions for federal fiscal year ~~2021~~2022, with ED reporting a zero percent cohort default rate for APUS, RU, and HCN. These rates were favorably impacted by regulatory relief provided in connection with the COVID-19 pandemic pursuant to which borrowers with Title IV program student loans were not required to make payments on their federal loans, ~~but~~and no interest accrued on these loans during this period. Interest accrual on forborne federal student loans resumed on September 1, 2023, and payments became due beginning October 1, 2023. In connection with these developments, ED implemented a 12-month “on-ramp” to repayment, running from October 1, 2023, to September 30, 2024, during which borrowers were not placed into default for missed payments. The end of COVID-19 pandemic-related student loan forbearance and the 12-month “on-ramp” period may lead to higher default rates in the future. ED has also announced other actions intended to provide debt relief and support for student loan borrowers, such as instituting a new income-driven repayment plan. However, there can be no assurance that our institutions’ cohort default rates will benefit from these efforts.

61If one of our institutions loses its eligibility to participate in Title IV programs because of high student loan default rates, students would no longer be eligible to use Title IV program funds at that institution, and the institution would no longer be eligible to participate in the TA program, which would significantly reduce that institution’s enrollments and revenue and cash flows and have a material adverse effect on our results of operations. In addition, if Congress or ED restricts permitted types of default prevention assistance, the default rates of our former students may be negatively impacted. Congress could also increase the measuring period, which could also negatively impact student default rates.

repayment, running from October 1, 2023, to September 30, 2024, during which borrowers were not placed into default for missed payments. The end of COVID-19 pandemic-related student loan forbearance and the 12-month “on-ramp” period may lead to higher default rates in the future. ED has also announced other actions intended to provide debt relief and support for student loan borrowers, such as instituting a new income-driven repayment plan. However, there can be no assurance that our institutions’ cohort default rates will benefit from these efforts.

If one of our institutions loses its eligibility to participate in Title IV programs because of high student loan default rates, students would no longer be eligible to use Title IV program funds at that institution, which would significantly reduce that institution’s enrollments and revenue and cash flows and have a material adverse effect on our results of operations. In addition, if Congress or ED restricts permitted types of default prevention assistance, the default rates of our former students may be negatively impacted. Congress could also increase the measuring period, which could also negatively impact student default rates.

We rely on third parties to administer elements of APUS’s, RU’s, and HCN’s participation in Title IV programs and their failure to perform services as agreed or to comply with applicable regulations could cause us to lose our eligibility to participate in Title IV programs.

ED’s regulations permit an institution to enter into a written contract with a third-party servicer for the administration of any aspect of the institution’s participation in Title IV programs. The third-party servicer must, among other obligations, comply with Title IV requirements and be jointly and severally liable with the institution to ED for any violation by the servicer of any Title IV provision. An institution must report to ED new contracts with or any significant modifications to contracts with third-party servicers and other matters related to third-party servicers. If any third-party servicer that we have engaged does not comply with applicable statutes and regulations, our institutions may be liable for its actions, and our institutions could lose eligibility to participate in Title IV programs. The failure of one of our third-party servicers to perform the services as agreed may adversely impact our ability to operate, our eligibility to participate in Title IV programs, and our financial condition. Further, in the event that our institutions transition to or from a third-party servicer for any of its services, there would be costs and risks related to the transition, which could have a material adverse effect on our financial condition.

Our institutions will be subject to sanctions that could be material to our results and damage our reputation if ED determines that our institutions failed to correctly calculate and timely return Title IV program funds for students who withdraw before completing their educational program.

As more fully described in “Business – Regulatory Environment – Student Financing Sources and Related Regulations/Requirements – Regulation of Title IV Financial Aid Programs – Title IV Return of Funds”, an institution participating in Title IV programs must calculate unearned Title IV program funds that have been disbursed to students who withdraw from their educational programs before completion and must timely return those funds. Under ED regulations, late returns of Title IV program funds for 5% or more of students sampled in connection with the institution’s annual Title IV compliance audit constitute material noncompliance for which an institution generally must submit an irrevocable letter of credit.

Our institutions’ failure to comply with ED’s substantial misrepresentation rules could result in material sanctions.

As more fully described in “Business – Regulatory Environment – Student Financing Sources and Related Regulations/Requirements – Regulation of Title IV Financial Aid Programs – Substantial Misrepresentation”, ED may fine, suspend or terminate the participation in Title IV programs by an institution that engages in substantial misrepresentation regarding the nature of its education program, its financial charges, or the employability of its graduates. If administrative actions or litigation claiming substantial misrepresentation were brought against our institutions, we could incur legal costs related to their investigation and defense, which could materially and adversely impact our financial condition.

Enforcement of laws related to the accessibility of technology continues to evolve, which could result in increased information technology development costs and compliance risks.

Our institutions make certain course content available to students through personal computers, mobile devices, and other technological devices. The curriculum makes use of a combination of graphics, pictures, videos, animations, sounds, and interactive content. We also communicate to both the general public and our enrolled students through our websites, which also triggers accessibility requirements under federal law. Federal agencies, including ED and the Department of Justice, have considered or are considering how electronic and information technology should be made accessible to persons with disabilities, including via specific technical standards. For example, as discussed further in “Business – Regulatory Environment – Department of Education – Regulation of Title IV Financial Aid Programs – Accessibility for Students and Disabilities”, ED’s Office for Civil Rights, or OCR, has in recent years taken enforcement action against higher education institutions in connection with the inaccessibility of their websites and online learning management platforms to persons with a disability. In 2022, OCR initiated a compliance review of APUS’s learning management system and courses. In August 2024, OCR identified APUS was out of compliance with certain accessibility requirements for people with disabilities for ten courses. Currently, APUS is cooperating with OCR on a resolution to bring APUS into compliance. At this time, we cannot predict when the compliance review will be completed, additional costs associated with compliance, whether there will be any further findings, or whether OCR will place any liability or other limitations on APUS as a result of the compliance review.

OCR has in recent years taken enforcement action against higher education institutions in connection with the inaccessibility of their websites and online learning management platforms to persons with a disability. In 2022, OCR initiated a compliance review of APUS’s learning management system and courses. In August 2024, OCR identified we were out of compliance with certain accessibility requirements for people with disabilities for ten courses. Currently, APUS is cooperating with OCR on a resolution to bring APUS into compliance. At this time, we cannot predict when the compliance review will be completed, additional costs associated with compliance, whether there will be any further findings , or whether OCR will place any liability or other limitations on APUS as a result of the compliance review.

As a result of such enforcement action or as a result of new laws and regulations that require greater accessibility or accessibility in accordance with specific technical standards, our institutions may have to modify their online classrooms and other uses of technology to satisfy applicable requirements, which could require substantial financial investment. As with all nondiscrimination laws that apply to recipients of federal financial assistance, an institution may lose access to federal financial assistance if it does not comply with Section 504 requirements. In addition, private parties may file or threaten to file lawsuits alleging failure to comply with laws that prohibit discrimination on the basis of disability.

Government and regulatory agencies and third parties may conduct compliance reviews, bring claims, or initiate investigations, enforcement actions, or litigation against us, any of which could disrupt our institutions’ operations and adversely affect their performance.

Our institutions are subject to audits, compliance reviews, inquiries, complaints, investigations, claims of noncompliance, enforcement proceedings, and lawsuits by government agencies, regulatory agencies, students, employees, and third parties, including claims brought by third parties on behalf of the federal government. For example, ED regularly conducts program reviews of educational institutions that are participating in Title IV programs, and ED OIG ~~regularly~~may ~~conducts~~conduct inspections, audits, and investigations of ~~such~~our institutions and certain of our third-party service providers.

In July 2023, ED began a program review of APUS’s administration of Title IV programs during the 2021-2022 and 2022-2023 award years that, among other things, includes a review of compliance with the 90/10 Rule. APUS has not yet received a program review report from ED. Accordingly, at this time, we cannot predict the outcome of the APUS program review, when it will be completed, whether there will be any adverse findings in the resulting program review report, what findings there may be related to 90/10 Rule compliance, if any, or whether ED will place any liability or other limitations on APUS as a result of the review.

In addition, the FTC has investigated and, in some cases, brought lawsuits against for-profit institutions alleging that the institutions engaged in deceptive trade practices, and the CFPB has sued for-profit institutions for engaging in allegedly illegal predatory lending practices. The FTC announced that it would be enhancing its enforcement cooperation with other agencies with oversight of educational institutions, including ED’s Office of Federal Student Aid and the Department of Veterans Affairs. Also in October 2021, ED announced that it had restored an Office of Enforcement within ED’s Office of Federal Student Aid to strengthen oversight of and enforcement actions against postsecondary institutions that participate in federal student loan, grant, and work-study programs. Any civil penalties or enforcement actions could have a material and adverse effect on our financial condition and results of operations.64

~~If the results of compliance reviews or other proceedings are unfavorable to our institutions~~review, orwhen ifit ~~they~~will ~~are~~be ~~unable to defend successfully against lawsuits or claims~~completed, ~~our~~whether ~~institutions~~there ~~may~~will be ~~required~~any toadverse ~~pay~~findings ~~monetary~~in ~~damages or be subject to fines, limitations, loss of Title IV funding, injunctions, or other penalties, including~~ the ~~requirement~~resulting toprogram ~~make refunds. Even if our institutions adequately address issues raised by a compliance~~ review orreport, ~~successfully~~what ~~defend~~findings athere ~~lawsuit or claim, we~~ may ~~have~~be torelated ~~divert significant financial and management resources from our ongoing business operations~~ to ~~address~~90/10 ~~issues~~Rule ~~raised by those reviews or to defend against those lawsuits or claims. Claims and lawsuits brought against us or one of our institutions may result in reputational damage~~compliance, ~~even~~ if ~~such claims and lawsuits are without merit~~any, ~~which~~or ~~could~~whether ~~materially~~ED ~~adversely~~will ~~affect~~place ~~our~~any ~~business,~~liability ~~financial~~or ~~condition,~~other ~~results~~limitations ofon ~~operations,~~APUS ~~and~~as ~~cash~~a ~~flows and~~ result inof the ~~imposition of significant restrictions on us and our institutions, which may materially adversely affect our ability to operate~~review.

~~Investigations~~In byaddition, ~~state~~the ~~Attorneys~~Federal ~~General~~Trade Commission, ~~Congress~~or FTC, has investigated and, ~~governmental~~in ~~agencies~~some ~~into~~cases, brought lawsuits against for-profit institutions alleging that the ~~Company~~institutions engaged in deceptive trade practices, and ~~other~~the Consumer Financial Protection Bureau, or CFPB, has sued for-profit institutions ~~may~~for ~~result~~engaging in ~~increased~~allegedly ~~regulatory~~illegal ~~burdens~~predatory lending practices. The FTC announced that it would be enhancing its enforcement cooperation with other agencies with oversight of educational institutions, including ED’s Office of Federal Student Aid and ~~costs~~the Department of Veterans Affairs. Also in October 2021, ED announced that it had restored an Office of Enforcement within ED’s Office of Federal Student Aid to strengthen oversight of and ~~may~~enforcement ~~impact~~actions against postsecondary institutions that participate in federal student loan, grant, and work-study programs. Any civil penalties or enforcement actions could have a material and adverse effect on our ~~reputation~~financial condition and results of operations.

~~Regulatory~~If ~~investigations~~the ~~and~~results ~~civil~~of ~~litigation~~compliance ~~brought~~reviews ~~against~~or other ~~for-profit~~proceedings ~~education~~are unfavorable to our institutions, ~~have~~or ~~attracted~~if ~~adverse~~they ~~media~~are ~~and~~unable ~~social~~to ~~media~~defend ~~coverage~~successfully against negative regulatory or administrative actions, ~~have~~lawsuits, ~~been~~or ~~the~~claims, our institutions may be required to pay monetary damages or be subject to fines, limitations, loss of ~~federal~~Title ~~and~~IV ~~state~~funding, ~~legislative~~injunctions, ~~hearings~~or other penalties, ~~and~~including ~~have~~the inrequirement ~~some~~to ~~cases~~make ~~resulted~~refunds. inEven ~~legislation~~if our institutions adequately address issues raised by a compliance review or ~~rulemaking.~~successfully Indefend ~~some~~a ~~cases~~lawsuit or claim, ~~institutions~~we may have ~~ceased~~to divert significant financial and management resources from our ongoing business operations, ~~including~~to ~~while~~address ~~under~~issues ~~multiple~~raised ~~government~~by ~~investigations.~~those ~~Broader~~reviews ~~allegations~~or to defend against ~~the~~those ~~overall~~lawsuits ~~for-profit~~or ~~school~~claims. ~~sector,~~Claims ~~including~~and ~~allegations~~lawsuits brought against us or one of ~~improper~~our ~~recruiting,~~institutions ~~compensation~~may result in reputational damage, even if such claims and ~~deceptive~~lawsuits ~~marketing~~are ~~practices~~without merit, ~~among~~which ~~other~~could ~~issues~~materially adversely affect our business, ~~have~~financial ~~negatively~~condition, ~~affected~~results ~~public~~of ~~perceptions~~operations, and cash flows and result in the imposition of ~~for-profit~~significant restrictions on us and our institutions, which may materially adversely affect our ability to operate.

63Investigations by state Attorneys General, Congress, and governmental agencies into the company and other for-profit institutions may result in increased regulatory burdens and costs and may impact our reputation.

Regulatory investigations and civil litigation brought against other for-profit education institutions have attracted adverse media and social media coverage, have been the subject of federal and state legislative hearings, and have in some cases resulted in legislation or rulemaking. In some cases, institutions have ceased operations while under multiple government investigations. Broader allegations against the overall for-profit school sector, including allegations of improper recruiting, compensation, and deceptive marketing practices, among other issues, have negatively affected public perceptions of for-profit education institutions, including our institutions, and this trend could continue or broaden. In addition, reports on student lending practices of various lending institutions and schools, including for-profit schools, and investigations by a number of state attorneys general, Congress, and governmental agencies have led to adverse media and social media coverage of postsecondary and for-profit education. Adverse media or social media coverage regarding others in our industry, or ~~regarding~~ us or our institutions directly, could damage our reputation, could result in lower enrollments at our institutions, lower revenue, and increased expenses, and could have a negative impact on our stock price. Such allegations could also result in increased scrutiny and regulation by ED, Congress, accrediting bodies, state legislatures, state attorneys general, or other governmental authorities with respect to all for-profit institutions, including us and our institutions. State attorneys general may also take adverse positions on laws and apply them to institutions that offer wholly online education to students in the state. For these reasons or others, not-for-profit or public education institutions may act to differentiate themselves from the for-profit education institutions, including by choosing not to enter into collaborations with for-profit institutions, including us, or by excluding for-profit institutions from membership in industry groups. Similarly, some corporations have chosen and may in the future choose not to collaborate with for-profit providers such as us for programs for their employees or for other training purposes.

If we undergo a change in ownership or control, ED will place our institutions on provisional certification if they are not already on provisional status, and the terms of that provisional certification could limit our institutions’ potential for growth and adversely affect our institutions’ enrollment, our revenue, and results of operations.

As described more fully under “Business – Regulatory Environment – Regulatory Actions and Restrictions on Operations”, an institution whose parent undergoes a change in ownership resulting in a change of control loses its eligibility to participate in Title IV programs and must apply to ED in order to reestablish such eligibility. For example, as described in “Business – Regulatory Environment – Student Financing Sources and Related Regulations/Requirements – Department of Education – Regulation of Title IV Financial Aid Programs – Eligibility and Certification Procedures”, ED imposed growth restrictions on RU, certain of which ED has released RU from, in connection with RU’s 2019 change in ownership and continued those restrictions after the Rasmussen Acquisition as part of RU’s provisional certification, with certain qualifications more fully described in “Business – Regulatory Environment – Regulatory Actions and Restrictions on Operations” and “ – Student Financing Sources and Related Regulations/Requirements”. These growth restrictions ~~could~~have ~~limit~~previously orlimited ~~adversely~~and ~~affect~~could ~~RU’s growth opportunities, including restricting its ability to serve additional students, particularly additional nursing students.~~

Future transactions could constitute a change in ownership or control under ED’s regulations and could cause ED to leave provisional certification in place for our institutions as required by the HEA. The conditions of provisional certification or heightened scrutiny by ED could impact, among other things, our institutions’ ability to add educational programs, or additional locations, our ability to acquire other institutions, or our ability to make other significant changes. In addition, if ED were to determine that our institutions were unable to meet their responsibilities while they were provisionally certified, as our institutions currently are, ED could seek to revoke our institutions’ certification to participate in Title IV programs with fewer due process protections than if they were fully certified. Limitations on our institutions’ operations could, and the loss of our institutions’ certification to participate in Title IV programs would, adversely affect our institutions’ enrollments, and our revenue and results of operations.65

Ifadversely ~~regulators~~affect doRU’s ~~not~~growth ~~approve~~opportunities, orincluding ~~delay~~restricting ~~their~~its ~~approval~~ability ofto ~~transactions~~serve ~~involving~~additional ~~a change of control of our Company or of institutions that we own or acquire~~students, ~~our~~particularly ~~and~~additional ~~our~~nursing ~~institutions’ ability to operate could be impaired~~students.

Future transactions could constitute a change in ownership or control under ED’s regulations and could cause ED to leave provisional certification in place for our institutions as required by the HEA. The conditions of provisional certification or heightened scrutiny by ED could impact, among other things, our institutions’ ability to add educational programs, or additional locations, our ability to acquire other institutions, or our ability to make other significant changes. In addition, if ED were to determine that our institutions were unable to meet their responsibilities while they were provisionally certified, as APUS and RU currently are, ED could seek to revoke our institutions’ certification to participate in Title IV programs with fewer due process protections than if they were fully certified. Limitations on our institutions’ operations could, and the loss of our institutions’ certification to participate in Title IV programs would also result in the loss of their ability to participate in TA programs, and would adversely affect our institutions’ enrollments, and our revenue and results of operations.

If regulators do not approve or delay their approval of transactions involving a change of control of APEI or its institutions that we own or acquire, our and our institutions’ ability to operate could be impaired.

If we or one of our institutions experiences a change of ownership or control under the standards of applicable state regulatory bodies, accrediting agencies, ED, or other regulators, we or the institution governed by such agencies must notify or seek the approval of each relevant regulatory agency. Transactions or events that constitute a change of control include significant acquisitions or dispositions of an institution’s common stock, significant changes in the composition of an institution’s Board of Directors, internal restructurings, acquisitions of institutions, including the Rasmussen Acquisition, or certain other transactions. Some of these transactions or events may be beyond our control. Our or our institutions’ failure to obtain, or a delay in obtaining, approval of any change of control from the relevant regulatory agencies following a transaction involving a change of ownership or control could result in a suspension of operating authority, loss of accreditation, or suspension, loss of ability to participate in Title IV programs or certain growth restrictions including with respect to adding locations and programs, which could have a material adverse effect on our institutions and our financial condition. Our failure to obtain, or a delay in receiving, any approval of any change of control from other states in which we are currently licensed or authorized could require our institutions to suspend activities in that state or otherwise impair our institutions’ operations. The potential adverse effects of a change of control could influence, among other things, future decisions by us and our stockholders regarding the sale, purchase, transfer, issuance, or redemption of our stock. Growth restrictions that ED could impose as a result of change in ownership are more fully described in “Business – Regulatory Environment – Regulatory Actions and Restrictions on Operations” and “– Student Financing Sources and Related Regulations/Requirements”.

Congress has in the past changed, and may in the future change, eligibility standards and funding levels for federal student financial aid programs, DoD TA, and other programs. Other governmental or regulatory bodies may also change similar laws or regulations relating to such programs, which could adversely affect our student population, revenue, and financial condition.

Title IV programs are made available pursuant to the provisions of the HEA. The HEA must be periodically reauthorized by Congress and each Title IV program must be funded through appropriations acts on an annual basis. We cannot predict whether, in what form, or when, HEA reauthorization legislation will be enacted. Modifications to the HEA could occur as part of reauthorization, which could require us to modify our business practices and increase administrative costs, thereby negatively impacting our results of operations.

Future Congressional action, including in reauthorizations or appropriations acts, may result in legislative changes that could adversely affect the ability of our institutions to participate in Title IV programs, TA, and the availability of such funding sources for our students. Members of Congress may propose legislation to alter or modify the terms under which our institutions participate in the federal student financial aid programs. Any action by Congress that significantly reduces funding for Title IV programs or the ability of our institutions or students to participate in these programs could materially harm our institutions’ business. A reduction in government funding levels could lead to lower enrollments at our institutions and require our institutions to arrange for alternative sources of financial aid for their students. Lower student enrollments at our institutions or their students’ inability to arrange alternative sources of funding could adversely affect our financial condition. Congressional action may also require our institutions to modify their practices in ways that could result in increased administrative and regulatory expenses.

We are not in a position to predict the extent to which, or whether, Congress may focus on for-profit education institutions or whether any particular legislation that could adversely affect the for-profit education sector will be passed by Congress or signed into law in the future. The reallocation of funding among Title IV programs, material changes in the requirements for participation in such programs, or the substitution of materially different Title IV programs could reduce the ability of certain students to finance their education at our institutions and adversely affect our revenue and results of operations.

requirements for participation in such programs, or the substitution of materially different Title IV programs could reduce the ability of certain students to finance their education at our institutions and adversely affect our revenue and results of operations.

Failure to comply with the various federal and state laws and regulations governing HCN’s extended payment plan options could subject us to fines, penalties, obligations to discharge loans and other injunctive requirements.

HCN offers extended payment plan options designed to assist students with educational costs, including tuition and fees. The extended payment plan is subject to various federal and state laws and regulations, as discussed in “Business – Regulatory Environment – Student Financing Sources and Related Regulations/Requirements – Additional Sources of Student Payments”. If we do not comply with these laws and regulations, we could be subject to fines, penalties, obligations to discharge loans and other injunctive requirements, which could have a material adverse effect on our financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Additionally, an adverse allegation, finding or outcome in any of these matters could also materially and adversely affect our ability to maintain, obtain or renew licenses, approvals or accreditation and maintain eligibility to participate in Title IV programs or serve as a basis for ED to discharge certain Title IV student loans and seek recovery for some or all of its resulting losses from us, either of which could have a material adverse effect on our business, financial condition, results of operations, and ~~cashflows~~cash flows, and result in the imposition of significant restrictions on us and our ability to operate.

Risks Related to Our Business

Our student registrations, revenue, and cash flow have been adversely impacted, and we could experience additional adverse impacts as a result of the Armed Forces’ TA processing system upgrades or a transition to new systems for ~~soldiers~~service members to request TA or accessing VA education benefit programs.

APUS relies on the ability of the Armed Forces to process service members’ participation in TA programs, and, from time to time, changes to processes have impacted the ability of service members to participate in ~~those~~these programs. ~~For~~The ~~example,~~Armed ~~the~~Forces ~~Army~~use inthird-party ~~2021~~service ~~transitioned~~providers ~~from~~and ~~its~~systems ~~legacy~~to ~~system~~process service members’ TA requests, ~~GoArmyEd~~approvals, and the processing of payments to ~~ArmyIgnitED~~APUS. For example, ~~for~~in ~~soldiers~~August to2022, ~~use~~the toArmy ~~request~~transitioned ~~TA.~~from ~~This~~an ~~transition~~initial ~~was~~version ~~beset~~of ArmyIgnitED with ~~delays~~a ~~and~~third-party ~~disruptions~~service provider to ~~the~~an ~~Army’s~~upgraded TAArmyIgnitED ~~programs~~2.0, Inwith ~~connection~~a ~~with~~new ~~the~~third-party ~~transition~~service provider, weand ~~experienced~~announced ~~challenges~~that ~~related~~all TA requests for courses would be required to ~~system~~be ~~performance,~~submitted ~~process~~via ~~changes~~ArmyIgnitED ~~and~~2.0. ~~third-party~~As ~~software~~part ~~defects~~of this change, ~~and~~the ~~there~~Army ~~was~~stopped anallowing ~~adverse~~institutions ~~impact~~to onsubmit ~~registrations~~invoices ~~and~~for ~~revenue,~~a ~~profits~~portion of 2022, ~~and~~which ~~cash~~delayed ~~flow~~our inability ~~the~~to ~~second~~collect on our accounts receivable and ~~third~~caused ~~quarters~~our ofaccounts ~~2021~~receivable to increase.

InDifficulties ~~August~~associated ~~2022~~with system upgrades or a transition to a new service provider, including the ~~Army~~related ~~transitioned~~data ~~from~~migration, ~~the~~could ~~initial~~cause ~~version~~further disruption to service members’ ability to seek and obtain TA and to the processing of ~~ArmyIgnitED~~invoices and payments to anAPUS. ~~upgraded~~We ~~ArmyIgnitED~~could 2experience similar challenges with any other system transitions undertaken by other branches of the DoD or the government.0 For example, ~~with~~in aFebruary ~~new~~2025, the third-party service provider, for the Army and Air Force experienced difficulties with routine system maintenance and upgrades resulting in an approximate two-week service outage. Additionally, VA has announced ~~that~~multi-year ~~all~~plans TAto ~~requests~~upgrade systems used for ~~courses~~veteran ~~would~~education bebenefits, ~~required~~and we have no assurance that upgrades will not disrupt veteran access to bethose ~~submitted~~benefits ~~via~~and ~~ArmyIgnitED~~our 2ability to collect on related accounts receivable.0. AsThe ~~part~~inability of ~~this~~soldiers ~~change~~to participate in TA programs, ~~the~~or ~~Army~~of ~~stopped~~veterans ~~allowing~~to ~~institutions~~access VA education benefit programs, or continued or additional limitations on their ability to ~~submit~~apply ~~invoices~~and ~~for~~participate, awould ~~portion~~have an adverse effect on our results of ~~2022,~~operations ~~which~~and financial condition.

65Economic and market conditions in the United States and abroad and changes in interest rates could affect our enrollments, success with placement and persistence and cohort default rates.

~~delayed~~Our ~~our~~business ~~ability~~has tobeen ~~collect~~and onmay ~~our~~in ~~accounts~~the ~~receivable~~future ~~and~~be ~~caused~~adversely ~~our~~affected ~~accounts~~by ~~receivable~~a togeneral ~~increase.~~economic ~~The~~slowdown, ~~impact~~recession, ofor other adverse economic developments in the ~~delayed~~United ~~receipt~~States ofor ~~funds~~abroad, including rising interest rates and ~~APUS’s~~inflation. ~~change~~Our ininstitutions ~~billing~~derive ~~process~~a ~~are~~significant ~~discussed~~portion inof ~~further~~their ~~detail~~revenue infrom Title IV programs, which include student loans with interest rates subsidized by the ~~Risk~~federal ~~Factor~~government. ~~that~~Additionally, ~~begins~~some ~~“If~~students ~~one~~finance ortheir ~~more~~education ofthrough ~~our~~private ~~institutions~~loans ~~does~~that are not ~~comply~~government ~~with~~subsidized. Historically low interest rates have in the ~~90/10~~past ~~Rule…”.~~created ~~There~~a ~~can~~favorable beborrowing noenvironment ~~assurance~~for ~~that~~students. However, our ~~continued~~students ~~efforts~~may have to ~~mitigate~~pay ~~any~~higher ~~adverse~~interest ~~impact~~rates on their Title IV program loans and private loans as a result of ~~the~~increases ~~transition~~in interest rates. Increases in applicable interest rates could result in a corresponding increase in educational costs to ~~ArmyIgnitED~~our ~~2.0~~existing onand ~~accounts~~prospective ~~receivable~~students, ~~bad~~which ~~debt,~~could ~~and~~result ~~cash~~in ~~flow~~a ~~will~~reduction bein ~~successful~~our orenrollment. ~~that~~Higher ~~ArmyIgnitED~~interest 2rates could also contribute to higher default rates with respect to our students’ repayment of their education loans.0 ~~will~~Higher ~~work~~default asrates ~~expected~~may in turn adversely impact our eligibility to participate in some Title IV programs, which could adversely impact our operations and financial condition. In

Difficulties associated with any further upgrade or transition to a new service provider, including the related data migration, could cause further disruption to service members’ ability to seek and obtain TA and to the processing of invoices and payments to APUS. We could experience similar challenges with any other system transitions undertaken by other branches of the DoD or the government. For example, in February 2025, the service provider for the Army and Air Force experienced difficulties with routine system maintenance and upgrades resulting in an approximate two week service outage. Additionally, VA has announced multi-year plans to upgrade systems used for veteran education benefits, and we have no assurance that upgrades will not disrupt veteran access to those benefits and our ability to collect on related accounts receivable. The inability of soldiers to participate in TA programs, or of veterans to access VA education benefit programs, or continued or additional limitations on their ability to apply and participate, would have an adverse effect on our results of operations and financial condition.67

~~Economic~~addition, ~~and~~inflation ~~market~~has ~~conditions~~resulted and, in the ~~U.S.~~future, ~~and~~could ~~abroad~~result ~~and changes~~ in ~~interest~~increased ~~rates~~costs ~~could~~of ~~affect~~labor ~~our~~and ~~enrollments~~materials, ~~success~~which ~~with~~could ~~placement~~adversely ~~and~~impact ~~persistence~~our operations and ~~cohort~~financial ~~default rates~~condition.

~~Our~~Adverse ~~business~~economic ~~has~~developments, ~~been~~such ~~and~~as ~~may~~those inthat ~~the~~resulted ~~future~~from bethe ~~adversely~~COVID-19 ~~affected~~pandemic, bythat aaffect ~~general~~the ~~economic~~United ~~slowdown,~~States ~~recession,~~could oralso ~~other~~result ~~adverse~~in ~~economic~~a ~~developments~~reduction in the ~~U.S.~~number orof ~~abroad,~~jobs ~~including~~available ~~rising~~to ~~interest~~our ~~rates~~graduates and ~~inflation.~~lower ~~Our~~salaries ~~institutions~~being ~~derive~~offered ain ~~significant~~connection ~~portion~~with ofavailable ~~their~~employment, ~~revenue~~which, ~~from~~in ~~Title~~turn, IVcould ~~programs,~~result ~~which~~in ~~include~~declines ~~student~~in ~~loans~~our success with ~~interest~~placements ~~rates~~and ~~subsidized~~persistence. byIn ~~the~~addition, ~~federal~~adverse ~~government.~~economic ~~Additionally,~~developments ~~some~~could ~~students~~adversely ~~finance~~affect ~~their~~the ~~education~~ability ~~through~~or ~~private~~willingness ~~loans~~of ~~that~~our ~~are~~former ~~not~~students ~~government~~to ~~subsidized.~~repay ~~Historically~~student ~~low~~loans, ~~interest~~which ~~rates~~could ~~have~~increase inour ~~the~~institutions’ ~~past~~student ~~created~~loan acohort ~~favorable~~default ~~borrowing~~rates ~~environment~~and ~~for~~require ~~students.~~increased ~~However~~time, ~~our~~attention, ~~students~~and ~~may~~resources ~~have~~ to ~~pay~~manage ~~higher~~these ~~interest~~defaults. ~~rates~~Our oninstitutions’ ~~their~~students ~~Title~~are IVable ~~program~~to ~~loans~~borrow ~~and~~Title ~~private~~IV loans asin aexcess ~~result~~ of ~~recent~~their tuition and ~~future~~fees. ~~interest~~The ~~rate~~excess ~~increases.~~is ~~Increases~~received inby ~~applicable~~such ~~interest~~students ~~rates~~as ~~could~~a ~~result~~credit inbalance refund. However, if a ~~corresponding~~student ~~increase~~withdraws, inour ~~educational~~institutions ~~costs~~must toreturn ~~our~~any ~~existing~~unearned ~~and~~Title ~~prospective~~IV ~~students,~~funds (which ~~could~~may ~~result~~include in a ~~reduction~~portion inof ~~our~~the ~~enrollment.~~credit ~~Higher~~balance ~~interest~~refund) ~~rates~~and ~~could~~must ~~also~~seek ~~contribute~~ to ~~higher~~collect ~~default~~from ~~rates~~the ~~with~~student ~~respect~~any toresulting ~~our~~amounts ~~students’~~owed ~~repayment~~to ofthe ~~their education loans~~institution. ~~Higher~~A ~~default~~protracted ~~rates~~economic ~~may~~slowdown incould ~~turn~~negatively ~~adversely~~ impact ~~our~~such ~~eligibility~~students’ abilities to ~~participate~~pay inunpaid ~~some~~balances ~~Title~~due ~~IV programs~~us, ~~which~~including ~~could~~debts ~~adversely~~that ~~impact~~result ~~our~~from ~~operations~~returns ~~and~~of ~~financial~~unearned ~~condition~~Title IV amounts. InAs ~~addition~~a result, ~~inflation~~the ~~has~~amount ~~resulted~~of ~~and,~~Title inIV ~~the~~funds ~~future,~~we ~~could~~would ~~result~~have into ~~increased~~return ~~costs~~without ofrepayment ~~labor~~from ~~and~~our ~~materials,~~institutions’ ~~which~~students could ~~adversely~~increase, ~~impact~~and our ~~operations~~financial ~~and~~results ~~financial~~could ~~condition~~suffer.

Adverse economic developments, such as those that resulted from the COVID-19 pandemic, that affect the U.S. could also result in a reduction in the number of jobs available to our graduates and lower salaries being offered in connection with available employment, which, in turn, could result in declines in our success with placements and persistence. In addition, adverse economic developments could adversely affect the ability or willingness of our former students to repay student loans, which could increase our institutions’ student loan cohort default rates and require increased time, attention, and resources to manage these defaults. Our institutions’ students are able to borrow Title IV loans in excess of their tuition and fees. The excess is received by such students as a credit balance refund. However, if a student withdraws, our institutions must return any unearned Title IV funds (which may include a portion of the credit balance refund) and must seek to collect from the student any resulting amounts owed to the institution. A protracted economic slowdown could negatively impact such students’ abilities to satisfy debts to the institution, including debts that result from returns of unearned Title IV amounts. As a result, the amount of Title IV funds we would have to return without repayment from our institutions’ students could increase, and our financial results could suffer.

Our business could be harmed if our institutions experience a disruption in their ability to process Title IV financial aid.

We collected a substantial portion of our fiscal year ~~2024~~2025 consolidated revenue from receipt of Title IV financial aid program funds. Any processing disruptions by ED, by our institutions, or by third-party service providers may impact the ability of our institutions’ students to obtain Title IV financial aid on a timely basis. If our institutions experience a disruption in their ability to process Title IV financial aid, either because of administrative challenges on their part or the part of their vendors, or the inability of ED to process Title IV funds on a timely basis, it could have a material adverse effect on our institutions’ business and on our financial condition, results of operations, and cash flows. If our institutions experience a disruption in their ability to process Title IV financial aid because of administrative challenges on their part or the part of their vendors, ED could require that our institutions become subject to payment methods for Title IV programs that are not the advance payment system, which could have a material adverse effect on our institutions’ cash flows.

66The planned combination of APUS, RU, and HCN may not be completed, or may not be completed on the terms or timeline currently contemplated, and if it is, the expected benefits may not be realized, any of which could have a material adverse impact on our business, financial condition, and results of operations.

As discussed in greater detail under “Business – Regulatory Environment – Accreditation – Institutional Accreditation – The ~~planned~~Planned ~~combination~~Combination of APUS, RU, and HCN”, ~~may~~on ~~not~~January be28, ~~completed~~2025, we announced the Combination, which will result in one combined institution named American Public University System comprised of two divisions named (i) APU Global, comprised of AMU and APU, and (ii) RU Health+, comprised of RU’s campus-based and online nursing programs, RU’s healthcare programs, HCN’s campus-based nursing and healthcare programs, and RU’s non-healthcare programs. As a result of the process change described under “Business – Regulatory Environment – Accreditation – Institutional Accreditation – The Planned Combination of APUS, RU, and HCN”, APUS and RU submitted a new joint application for Change of Control, Structure or ~~may~~Organization ~~not~~to beHLC ~~completed~~in onSeptember 2025 containing substantially the ~~terms~~same ~~currently~~information ~~contemplated~~that had been submitted previously and reflecting the two-step process. In February 2026, HLC approved the continuation of accreditation of APUS and ifRU itafter the legal entity merger with an acknowledgment that the intent is to eventually consolidate the three institutions into one HLC accreditation. ABHES has also informed HCN that it will continue HCN’s ABHES accreditation after the legal entity merger. On March 2, 2026, we completed the ~~expected~~merger ~~benefits~~of ~~may~~the ~~not~~legal beentities ~~realized~~that own and operate APUS, ~~any~~RU, and HCN with the APUS entity surviving the merger, and subsequently notified ED that the merger occurred and resulted in RU and HCN being directly owned by the same legal entity that directly owns APUS. We currently expect to complete implementation of ~~which~~step ~~could~~two ~~have~~of athe ~~material~~Combination ~~adverse~~in ~~impact~~the onthird quarter of 2026, but there can be no assurances of this timing. We may experience challenges with respect to maintaining and increasing student enrollments, delays, business disruption, increased costs, including from lost synergies, negative market reaction to the announcement and planning for the Combination, and other challenges during or following the Combination, which could adversely affect our business, financial condition, and results of operations. We may also experience challenges in attracting, retaining, and motivating key personnel during the pendency of the Combination and following its completion, which could harm our business. In addition, the Combination will require substantial management attention and could detract attention from our and our institutions’ day-to-day business operations, which may disrupt our ongoing business and may adversely impact relationships with students, employees, and other counterparties.

AsIn ~~described more fully under “Business – Regulatory Environment – Accreditation – Institutional Accreditation – The Planned Combination of APUS~~addition, ~~RU, and HCN”, on January 28, 2025, we announced our plan to combine~~ APUS, ~~RU,~~as ~~and~~the ~~HCN~~surviving ~~into one consolidated HLC-accredited~~ institution ~~to be named American Public University System~~, ~~which~~ will beneed ato ~~university~~obtain ~~system~~required ~~encompassing~~approvals ~~all~~from ~~APUS,~~state RUagencies, ~~and~~including ~~HCN~~state ~~programs,~~boards ~~campuses,~~of ~~and operations~~nursing, orin ~~the~~order ~~Combination.~~to Asoperate ain ~~result of~~ the ~~Combination,~~states ~~the~~where combined institution will have two divisions tentatively named (i) APUS Global, comprised of AMU and APU and (ii) Rasmussen, comprised of RU’s campus-based and online nursing programs, RU’s healthcare programs, HCN’s ~~campus-based healthcare programs,~~ and RU’s ~~non-healthcare~~currently ~~programs,~~operate. ~~with~~There ~~final~~can ~~names to~~ be ~~determined~~no ~~closer~~assurance tothat ~~closing~~APUS ofwill ~~the~~obtain ~~Combination. We anticipate completing~~ the ~~Combination in the third quarter of 2025 subject to obtaining~~ required ~~approvals~~state and ED ~~taking related actions~~approvals, but we may be unable to complete the Combination in an efficient, cost-effective manner, or at all. In addition, we may not fully realize the projected benefits of the Combination, if at all, or it may take longer to realize those benefits than expected, including, ~~without~~ED ~~limitation,~~approval ~~addressing regulatory compliance and other regulatory considerations. We may experience challenges with respect~~ to ~~maintaining~~expand and increasing student enrollments, delays, business disruption, increased costs, including from lost synergies, negative market reaction to the announcement and planning for the Combination, and other challenges during or following the Combination, which could adversely affect the CompanyAPUS’s ~~business,~~Title ~~financial~~IV ~~condition,~~certification and results of operations. We may also experience challenges in attracting, retaining, and motivating key personnel during the pendency of the Combination and following its completion, which could harm our business. In addition, the Combination will require substantial management attention and could detract attention from our and our institutions’ day-to~~-day~~ ~~business operations, which may disrupt our ongoing business and may adversely impact relationships with students, employees, and other counterparties.~~

In addition, APUS, as the surviving institution, will need to obtain required approvals from state agencies, including state boards of nursing, in order to operate in the states where HCN and RU currently operate. There can be no assurance that APUS will obtain the required state and ED approvals, including ED approval to expand APUS’s Title IV certification to encompass the RU and HCN programs and location, nor can there be any assurance that APUS will obtain those approvals on a timely basis. If required approvals and accreditation are not obtained, we may not be able to complete the Combination. If we are not able to complete the Combination, or if there is a negative reaction from students, employees, or other material stakeholders, our reputation, business, results of operations, and our ability to comply with regulatory requirements may be materially adversely impacted.68

encompass the RU and HCN programs and location, nor can there be any assurance that APUS will obtain those approvals on a timely basis. If required approvals and accreditation are not obtained, we may not be able to complete the Combination. If we are not able to complete the Combination, or to complete it in a timely fashion, or if there is a negative reaction from students, employees, or other material stakeholders, our reputation, business, results of operations, and our ability to comply with regulatory requirements may be materially adversely impacted.

Business combinations and acquisitions may be difficult to integrate, disrupt our business, dilute stockholder value, or divert management attention, and we may not realize the expected benefits of any consummated business combinations or acquisitions.

From time to time, we explore or enter into business combinations and acquisitions, which are typically accompanied by a number of risks, including:

•failure to consummate or delay in consummating the transactions;

•lack of understanding of the target business;

•unrealistic expectations for the benefits of the acquisitions or underestimation of the difficulties and costs of integration and impact on cash flow;

•failure to achieve anticipated transaction benefits or projected financial results and operational synergies;

•difficulties consolidating operations and integrating financial, information technology and other systems, as well as challenges in maintaining uniform, effective, or compliant standards, controls, policies, and procedures, including financial reporting procedures;

•disruption or termination of relationships with students or business partners;

•distraction of management’s and other key personnel’s attention from normal business operations during the acquisition and integration processes;

•inability to obtain, or delay in obtaining, approval of the acquisition from the necessary regulatory agencies, or the imposition of operating restrictions or a letter of credit requirement on us or on the acquired institution;

•expenses associated with the integration efforts;

•increased costs of strategic transactions as a result of recent inflation and higher interest rates;

•adverse tax or accounting impact; and

•unidentified issues not discovered in the due diligence process, including legal and regulatory contingencies.

67Any inability to integrate completed acquisitions in an efficient and timely manner could have an adverse impact on our results of operations. Further, many acquisitions result in the acquirer recording goodwill. If any acquisitions for which we record goodwill are not successful or experience challenges, that goodwill may become impaired and have an adverse impact on our results of operations.

Any inability to integrate completed acquisitions in an efficient and timely manner could have an adverse impact on our results of operations. Further, many acquisitions result in the acquirer recording goodwill. If any acquisitions for which we record goodwill are not successful or experience challenges, that goodwill may become impaired and have an adverse impact on our results of operations. For example, we recorded a non-cash charges of $146.9 million and $64.0 million, and to reflect the corresponding tax impact of $36.0 million and $15.8 million, during the fiscal years ended December 31, 2022 and 2023, respectively, to reduce the carrying value of RU goodwill and intangible assets as a result of determining that the fair value of RU was less than its carrying value.

The Rasmussen Acquisition was, and our acquisition of any other educational institution would also likely be, considered a change in ownership and control of the acquired institution under applicable regulatory standards. For the Rasmussen Acquisition, we needed, and for any such acquisition, we would need approval from ED, and we would need to notify or obtain approval from applicable state agencies and accrediting agencies, and possibly other regulatory bodies, to the extent those agencies or bodies require such actions. A number of these approvals can only be requested after completion of an acquisition. Our inability to obtain such approvals with respect to a completed acquisition could have a material adverse effect on our business, financial condition, results of operations, and cash flows. If we are not successful in completing acquisitions, we may incur substantial expenses and devote significant management time and resources without a productive result. In addition, future acquisitions could result in dilutive issuances of securities or could require use of substantial portions of our available cash, or issuances of debt or equity, as in connection with the Rasmussen Acquisition, which could adversely affect our financial condition.

We may not be able to achieve the anticipated benefits of any future acquisition, including cost savings and other synergies and growth opportunities, during the anticipated time frame, or at all, as has occurred to an extent with respect to the Rasmussen Acquisition. For example, events outside our control, such as changes in regulation and laws, public health crises and disease epidemics and pandemics, and economic trends, could adversely affect our ability to realize the expected benefits. ~~The~~An ~~continued~~ inability to realize ~~the full extent of the anticipated benefits of the Rasmussen Acquisition or an inability to realize~~ in full anticipated benefits of any future acquisition could have an adverse effect on our revenue, results of operations, and level of expenses, which may adversely affect the value of our common stock.

We have implemented a shared services model for services to our institutions, and challenges encountered due to the ongoing operation and expansion of this model could cause strategic or operational challenges and adversely impact us.

Over the last several years, we have invested capital and human resources in the transition and implementation of a shared services model pursuant to which APEI provides services to our institutions that were previously handled directly within those institutions. However, APEI’s provision of shared services may not provide the level of service or respond quickly enough to meet the business needs of our institutions. We may not achieve the expected or desired synergies or other benefits of implementing shared services. In addition, the operation and continued expansion of the shared services model could lead to strategic and operational challenges, inefficiencies, or increased costs, any of which could cause our institutions to become dissatisfied with the shared services model, and adversely affect our business, financial condition, results of operations, and cash flows.

We rely on third-party vendors whose service may be of lower quality than ours, whose responsiveness may be less timely than ours, and whose compliance practices may increase our operational and compliance risk.

We rely on third-party vendors to provide certain services to our institutions and their students primarily related to information technology services, our learning management system, our integrated curriculum and testing services, and financial aid processing, and expect to rely more heavily on such vendors, particularly through cloud computing services, in the future. While we monitor and assess vendor service, it is possible that the quality of service and the timeliness of vendor responses may be less than the service and responsiveness that we or our institutions would provide. In addition, the transition of services to new third-party vendors may take longer than expected or pose other operational challenges. Using third-party vendors increases compliance risk that the vendors may not adequately protect personal information, or that they may not comply with applicable federal or state regulations. In the event third-party vendors fail to provide services or provide inadequate services, lack adequate business continuity planning, or fail to provide necessary implementation or transition services, our financial condition and results of operations could be adversely affected. See also the Risk Factor with the caption beginning “Significant system disruptions to our computer networks, technology infrastructure, or online classroom infrastructure, or to the networks, infrastructure, and systems, or business of third parties…”

There can be no guarantee that our business will generate sufficient cash flow from operations or that future capital or borrowings will be available to us in an amount sufficient to enable us to fund our other liquidity needs.

Although we believe our cash flow from operations and our existing cash and cash equivalents will provide adequate funds for ongoing operations, debt and interest obligations, and planned capital expenditures for the next 12 months and the foreseeable future, our future capital requirements, and our ability to generate sufficient cash to fund our future operations will depend on a number of factors. Our business may not generate sufficient cash flow from operations, and future capital or borrowings may not be available to us in an amount sufficient to enable us to service our indebtedness, pay dividends on our Series A Senior Preferred Stock when due, or fund our other liquidity needs. Failure to achieve business performance consistent with our expectations, to address any downtrends in enrollments at RU, including as a result of regulatory action, or any government shutdown could adversely impact our cash flows and results of operations. In addition, our efforts to comply with the 90/10 Rule, including APUS’s change to its billing approach to delay invoicing for TA and the Combination, could lead us to reduce enrollments, require us to make expenditures, or result in other outcomes that would reduce our existing cash available for operations.

We have incurred substantial indebtedness under our credit agreement, the cost of servicing that debt could adversely affect our business and financial results, and we may not be able in the future to service that debt.

Our ability to make scheduled payments on or to refinance our obligations under the credit agreement will depend on our financial and operating performance, which will be affected by economic, financial, competitive, business, and other factors, some of which are beyond our control. The indebtedness we incurred in connection with the Rasmussen Acquisition requires us to dedicate a portion of our cash flow to servicing this debt, thereby reducing the availability of cash to fund other business initiatives. There can be no assurance that our business will generate sufficient cash flow from operations to service our indebtedness. If we are unable to meet our debt obligations or fund our other liquidity needs, we may need to restructure or refinance all or a portion of our indebtedness on or before maturity or sell certain of our assets. There can be no assurance that we will be able to restructure or refinance any of our indebtedness on terms favorable to us or commercially reasonable terms, if at all, which could cause us to default on our debt obligations and impair our liquidity. In addition, upon the occurrence of certain events, such as a change of control, we could be required to repay or refinance our indebtedness. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. There can be no assurance that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all. If we are unable to generate or borrow sufficient cash to make payments on our indebtedness, our business and financial condition would be materially harmed. For more information, see the Risk Factor that begins with the caption “If one or more of our institutions does not comply...”

Our Series A Senior Preferred Stock provides rights, preferences, and privileges that are not held by our common stockholders, and is senior to our common stock, which could adversely affect our cash flows, liquidity, and financial condition.

We are required to pay periodic cash dividends to the holders of our Series A Senior Preferred Stock, which will accrue at an annual rate equal to Term SOFR (as defined in the Certificate of Designation) plus 10.00%, and will increase by 2.0% on June 28, 2025 and another 0.5% on October 1, 2025 and the first day of every following quarter, subject to a maximum of Term SOFR plus 25.0%, other than an increase in the dividend rate in connection with an event of default under the Certificate of Designation. Our ability to pay dividends will depend upon our financial condition, cash flows, and operating performance, which are subject to economic and competitive conditions and to factors beyond our control. Our failure to pay dividends when due would result in an immediate increase in the dividend rate by 6.0% per annum until there is no longer any default in existence and continuing, and (if the failure occurs prior to June 29, 2027) will trigger an immediate requirement to make a payment to the holders of the Series A Senior Preferred Stock equal to a make-whole amount plus a significant additional premium. We refer to this payment as the Early Premium Amount. We also have the option, from time to time, to redeem the Series A Senior Preferred Stock pro rata in whole or in part. Payment of dividends or the exercise of this redemption right could adversely impact our liquidity and reduce the amount of cash flow available for working capital, capital expenditures, growth opportunities, and other general corporate purposes.

In addition, holders of our Series A Senior Preferred Stock have certain consent rights that limit our ability to obtain debt or preferred stock financing or take certain other corporate actions. Without the consent of at least 60% of the then outstanding shares of Series A Senior Preferred Stock, with certain exceptions, we may not, among other things, (i) incur any indebtedness if such incurrence would cause our Total Net Leverage Ratio (as defined in the purchase agreement for the Series A Senior Preferred Stock) to exceed 0.75 to 1:00, (ii) issue any capital stock senior to or pari passu with the Series A Senior Preferred Stock, (iii) declare or pay any cash dividends on our common stock, or (iv) repurchase more than an aggregate of $30 million of our common stock. Such consent rights may limit our financial and operational flexibility, which could have a material adverse effect on our business or liquidity.

~~Finally,~~We rely on third-party vendors to provide certain services to our ~~common~~institutions ~~stock~~and ~~ranks~~their ~~junior~~students primarily related to information technology services, our ~~Series~~learning Amanagement ~~Senior~~system, ~~Preferred~~our ~~Stock~~integrated ~~with~~curriculum ~~respect~~and totesting ~~the~~services, ~~payment~~and offinancial ~~dividends~~aid processing, and ~~amounts~~we ~~payable~~may rely more heavily on such vendors, particularly through cloud computing services, in the ~~event~~future. ofWhile ~~our~~we ~~liquidation~~monitor and assess vendor service, ~~dissolution~~it oris ~~winding-up~~possible that the quality of service and the timeliness of vendor responses may be less than the service and responsiveness that we or our ~~affairs~~institutions would provide. In addition, the ~~event~~transition of ~~our~~services ~~liquidation,~~to ~~dissolution~~new third-party vendors may take longer than expected or ~~winding~~pose other operational challenges. Using third-upparty ofvendors ~~our~~increases ~~affairs,~~compliance norisk ~~distribution~~that the vendors may not adequately protect personal information, or ~~payment~~that they may benot ~~made~~comply with applicable federal or state regulations. In the event that third-party vendors fail to ~~holders~~provide ofservices ~~our~~or ~~common~~provide ~~stock~~inadequate ~~until~~services, welack ~~have~~adequate ~~paid~~business continuity planning, or fail to ~~holders~~provide necessary implementation or transition services, our financial condition and results of operations could be adversely affected. See also the ~~Series~~Risk AFactor ~~Senior~~with ~~Preferred~~the ~~Stock~~caption abeginning ~~liquidation~~“Significant ~~preference~~system ~~equal~~disruptions to ~~$100~~our computer networks,~~000~~ ~~per~~technology ~~share~~infrastructure, ofor ~~Series~~online Aclassroom ~~Senior~~infrastructure, ~~Preferred~~or ~~Stock~~to ~~plus~~the ~~accrued~~networks, infrastructure, and ~~unpaid~~systems, ~~dividends~~or ~~plus~~business ~~the~~of ~~Early~~third ~~Premium Amount~~parties…. ”

Although we believe our cash flow from operations and our existing cash and cash equivalents will provide adequate funds for ongoing operations, debt and interest obligations, and planned capital expenditures for the next 12 months and the foreseeable future, our future capital requirements, and our ability to generate sufficient cash to fund our future operations will depend on a number of factors. Our business may not generate sufficient cash flow from operations, and future capital or borrowings may not be available to us in an amount sufficient to enable us to service our indebtedness or fund our other liquidity needs. Failure to achieve business performance consistent with our expectations, to address any downtrends in enrollments, including as a result of regulatory action, or any government shutdown could adversely impact our cash flows and results of operations. In addition, our efforts to comply with the 90/10 Rule, including APUS’s change to its billing approach to delay invoicing for TA and the Combination, could lead us to reduce enrollments, require us to make expenditures, or result in other outcomes that would reduce our existing cash available for operations.

We have incurred indebtedness under our credit agreement, the cost of servicing that debt could adversely affect our business and financial results, and we may not be able in the future to service that debt.

Our ability to make scheduled payments required under our credit agreement will depend on our financial and operating performance, which will be affected by economic, financial, competitive, business, and other factors, some of which are beyond our control. The indebtedness we incurred in connection with the Rasmussen Acquisition requires us to dedicate a portion of our cash flow to servicing this debt, thereby reducing the availability of cash to fund other business initiatives. There can be no assurance that our business will generate sufficient cash flow from operations to service our indebtedness. If we are unable to meet our debt obligations or fund our other liquidity needs, we may need to restructure or refinance all or a portion of our indebtedness on or before maturity or sell certain of our assets. There can be no assurance that we will be able to restructure or refinance any of our indebtedness on terms favorable to us or commercially reasonable terms, if at all, which could cause us to default on our debt obligations and impair our liquidity. In addition, upon the occurrence of certain events, such as a change of control, we could be required to repay or refinance our indebtedness. If we are unable to generate or borrow sufficient cash to make payments on our indebtedness, our business and financial condition would be materially harmed. For more information, see the Risk Factor that begins with the caption “If one or more of our institutions does not comply...”

We may need additional capital in the future, but there is no assurance that funds will be available on acceptable terms.

We may need additional capital in the future for various reasons, including to finance business acquisitions, to make investments in technology, or to achieve growth or fund other business initiatives. There is no assurance that capital will be available in sufficient amounts or on terms acceptable to us and may be dilutive to existing stockholders. Additionally, any securities issued to raise capital may have rights, preferences, or privileges senior to those of existing stockholders~~, such as our Series A Senior Preferred Stock stockholders have compared to the rights of our common stockholders~~. If adequate capital is not available or is not available on acceptable terms, our and our institutions’ ability to expand, develop or enhance services or products, or respond to competitive pressures, will be limited.

Our access to capital markets and sourcing for additional funding to expand or operate our business is subject to market conditions. Credit concerns regarding the for-profit postsecondary education industry as a whole also may impede our access to capital markets. If we are unable to obtain needed capital on terms acceptable to us, we may have to limit strategic initiatives or take other actions that materially adversely affect our business, financial condition, results of operations, and cash flows.

If our institutions fail to maintain adequate systems and processes to detect and prevent fraudulent activity in student enrollment and financial aid, our institutions may lose the ability to participate in Title IV programs or DoD TA programs or have participation in these programs conditioned or limited.

Our institutions must maintain systems and processes to identify and prevent fraudulent applications for enrollment and financial aid. We cannot be certain that our institutions’ systems and processes will continue to be adequate in the face of increasingly sophisticated fraud schemes, or that we will be able to expand such systems and processes at a pace consistent with the changing nature of these fraud schemes. Our institutions, in particular APUS and RU online programs, have been the target of fraudulent and abusive activity, including related to Title IV program funds. We believe the risk of outside parties attempting to perpetrate fraud in connection with the award and disbursement of Title IV program funds at APUS and RU online, including as a result of identity theft, is heightened due to its being an ~~exclusively~~ online education provider and ~~its~~their relatively low tuition.

ED requires institutions that participate in Title IV programs to refer to ED OIG credible information about fraud or other illegal conduct involving Title IV programs, and in the past our institutions have referred to the OIG information with respect to potential fraud by applicants and students. If the systems and processes that our institutions have established to ~~detect~~prevent and ~~prevent~~detect fraud are inadequate, ED may find that our institutions do not satisfy ED’s administrative capability requirements, which could have the adverse effects described in the Risk Factor captioned “A failure to demonstrate administrative capability may result in the loss of eligibility to participate in Title IV programs”. In addition, our institutions’ ability to participate in Title IV programs and TA is conditioned on maintaining accreditation by an accrediting agency that is recognized by ED. Any significant failure to adequately prevent and detect fraudulent activity related to student enrollment and financial aid could cause our institutions to fail to meet their accreditors’ standards. Furthermore, accrediting agencies that evaluate institutions offering online programs must require such institutions to have processes through which the institution establishes that a student who registers for such a program is the same student who participates in and receives credit for the program. Failure to meet the requirements of our institutions’ accrediting agencies could result in the loss of accreditation of one or more of our institutions, which could result in their loss of eligibility to participate in Title IV programs, TA, or both.

If we are unable to attract, retain, and develop skilled personnel and management, our business and growth prospects could be severely harmed, and changes in management could cause disruption and uncertainty.

We must attract, retain, and develop highly qualified faculty, management, administrators, and other skilled personnel to our institutions. We strive to retain our talent and closely track retention among our employees, both ~~staff~~faculty and non-faculty staff. We need to ensure effective succession for key executive and employee roles in order to meet the growth, development, and profitability goals of our business. Hiring competition may be intense, especially for faculty in specialized areas and qualified executives, and in areas such as information technology and finance. We also believe that current job market dynamics, including low unemployment, have further increased the challenge of hiring and employee retention.

70Certain markets continue to experience challenges in attracting and retaining qualified nursing faculty, which may influence our ability to staff programs across our nursing and healthcare‑focused institutions. Ensuring a stable, qualified nursing faculty base is essential for our institutional success and sustainability. If faculty‑to‑student ratios fall below desired levels, we may consider initiatives such as adjusting admissions standards or limiting cohort sizes to help maintain a strong learning environment, support student satisfaction and success, and continue improving NCLEX outcomes. While these steps are intended to protect program quality, they may also affect overall enrollment.

AAny ~~nursing~~failure ~~faculty~~to ~~shortage~~develop ~~continues~~and inmaintain ~~certain~~a ~~markets,~~positive ~~which~~culture ~~may~~and ~~impact~~strong ~~our~~employee ~~ability~~morale or to ~~recruit~~continue fostering the growth and ~~retain~~development ~~qualified~~of ~~nursing~~our ~~faculty~~personnel, ~~for~~including ~~programs~~through atthe ~~our~~use ~~nursing~~of staff performance evaluation systems and ~~healthcare-focused~~processes, ~~institutions.~~training Ifand weprofessional ~~are~~development ~~unable~~opportunities, toand ~~keep~~changes in faculty tooversight, ~~student~~could ~~ratios~~have ata ~~satisfactory~~material ~~levels,~~adverse weeffect ~~may~~on ~~implement~~our ~~certain~~business ~~initiatives,~~and ~~including,~~results ~~without~~of ~~limitation~~operations. In addition, ~~increasing~~to ~~admissions~~the ~~standards~~extent ~~and~~our ~~capping~~leaders ~~the~~behave ~~number~~in ofa ~~students~~manner that ~~can~~is benot ~~accepted~~consistent with our values, such as leading with integrity, we could experience significant impact to ~~the~~our ~~programs~~brand and reputation, inas ~~order~~well as to ~~concentrate~~our culture. Hiring and retention may also depend on ~~student~~our ~~satisfaction~~ability ~~and~~to ~~success~~build and ~~focus~~maintain ona ~~improving~~workplace ~~NCLEX~~culture ~~scores~~that enables our employees to thrive. ~~These~~We ~~measures~~are ~~could~~investing ~~have~~resources aninto ~~adverse~~supporting ~~impact~~the ondevelopment ~~enrollment~~of our leaders and in engaging our employees through meaningful employee engagement efforts and councils.

~~Any~~We ~~failure~~must tomanage ~~develop~~leadership development and ~~maintain~~succession aplanning ~~positive~~throughout ~~culture~~our ~~and~~business. ~~strong~~We ~~employee~~have ~~morale~~had orexecutive toofficers ~~continue~~retire ~~fostering~~or ~~the~~otherwise ~~growth~~depart ~~and development of~~ our ~~personnel,~~company ~~including~~over ~~through~~ the ~~use~~last ofseveral ~~staff~~years ~~performance evaluation systems~~ and ~~processes,~~we ~~could~~continually ~~have~~evaluate aour ~~material~~leadership ~~adverse~~structure, ~~effect~~including onin ~~our~~connection ~~business~~with ~~and~~anticipated ~~results of operations~~departures. InTo ~~addition, to~~ the extent ~~our leaders behave in a manner~~ that iswe ~~not~~lose ~~consistent~~experienced ~~with our values~~personnel, ~~such~~it asis ~~leading~~critical ~~with~~that ~~integrity,~~ we ~~could~~develop ~~experience~~other ~~significant~~employees, ~~impact~~hire tonew ~~our~~qualified ~~brand~~personnel, and ~~reputation,~~successfully asmanage ~~well~~the astransfer toof ~~our~~critical ~~culture~~knowledge. ~~Hiring~~Management turnover and ~~retention~~vacancies may ~~also~~negatively ~~depend~~impact onoperations, ~~our~~morale, ~~ability to build~~ and ~~maintain a workplace culture that enables~~ our ~~employees~~ability to ~~thrive~~execute. WeWhile ~~are~~we ~~investing~~have ~~resources~~processes ~~into~~in ~~supporting~~place ~~the development of our leaders and our network of inclusion and equity focused councils and committees.~~

We must manage leadership development and succession planning throughout our business. We have had executive officers retire or otherwise depart our Company over the last several years and we continually evaluate our leadership structure, including in connection with anticipated departures. While we have entered into employment agreements with certain executives, these employment agreements do not prevent the executives from voluntarily ceasing to work for us. To the extent that we lose experienced personnel, it is critical that we develop other employees, hire new qualified personnel, and successfully manage the transfer of critical knowledge. Management turnover and vacancies may negatively impact operations, morale, and our ability to execute. While we have processes in place for management transition and the transfer of knowledge, the loss of key personnel, coupled with an inability to adequately train other personnel, hire new personnel, or transfer knowledge, could significantly impact our business and results of operations. 71

~~While~~for ~~we continue to work to strengthen our~~ management ~~team~~transition and tothe ~~attract~~transfer ~~and~~of ~~retain high-caliber talent~~knowledge, ~~including~~the ~~through~~loss ~~various~~of ~~human~~key ~~resources programs and what we believe are competitive market compensation and benefits practices~~personnel, ~~our~~coupled ~~efforts~~with ~~may~~an ~~not~~inability ~~be successful. If we fail~~ to ~~attract~~adequately ~~new~~train ~~faculty,~~other ~~management, administrators, or skilled~~ personnel ~~or fail to retain~~, ~~develop,~~hire ~~and~~new ~~motivate our existing faculty, management, administrators, and skilled~~ personnel, ~~our institutions and our ability to serve our students, acquire new students, expand our programs, open new locations, make investments~~ or ~~acquisitions,~~transfer ~~and update or enhance our technology could be severely harmed~~knowledge, ~~and changes in management~~ could ~~disrupt~~significantly impact our business and ~~cause~~results ~~uncertainty~~of operations.

WeWhile we seek to attract and retain high-caliber talent, including through various human resources programs and what we believe are competitive market compensation and benefits practices, our efforts may not ~~achieve~~be ~~the~~successful. ~~anticipated~~If ~~benefits~~we offail to attract new faculty, management, administrators, or skilled personnel or fail to retain, develop, and motivate our ~~cost~~existing ~~savings~~faculty, ~~efforts~~management, ~~including~~administrators, ~~reductions~~and inskilled ~~force~~personnel, our institutions and ~~any~~our ~~savings~~ability ~~may~~to serve our students, acquire new students, expand our programs, open new locations, make investments or acquisitions, and update or enhance our technology could be ~~offset~~severely byharmed, ~~increased~~and ~~costs~~changes in ~~other~~management ~~areas.~~could disrupt our business and cause uncertainty.

We ~~have in the past and~~ may innot achieve the ~~future~~anticipated ~~conduct~~benefits ~~headcount~~of ~~reductions~~our ~~or other~~ cost savings ~~exercises.~~initiatives, ~~There~~including ~~can~~reductions bein noforce, ~~assurance~~any ~~that we will recognize the~~ benefits ~~we anticipate from these efforts. Some cost savings efforts~~ may be offset by ~~increases to wages and salaries and benefits necessary to remain competitive, or by additional hiring if we determine it is necessary. Reductions in force may also result in~~ increased costs, as opposed to cost savings, including due to associated legal risks, and could distract management and employees. Headcount reductions, including together with previous headcount reductions, could also adversely affect employee morale and make it more difficult to hire and retain qualified personnel. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Reductions in ~~Force”~~other ~~for more information~~areas.

We have in the past and may in the future conduct headcount reductions or other cost savings activities. For example, as a result of the 2025 Shutdown, we implemented various cost savings measures, including a reduction in force, hiring freeze, and reduction in travel and discretionary costs, among other activities, There can be no assurance that we will recognize the benefits we anticipate from these initiatives. Some cost savings realized may be offset by increases to wages and salaries and benefits necessary to remain competitive, or by additional hiring if we determine it is necessary, or other costs. Reductions in force may also result in increased costs, as opposed to cost savings, including due to associated legal risks, and could distract management and employees. Headcount reductions, including together with previous headcount reductions, could also adversely affect employee morale and make it more difficult to hire and retain qualified personnel. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Reductions in Force” and “– U.S. Federal Government Shutdown” for more information.

Our limited ability to obtain exclusive proprietary rights and protect our intellectual property, as well as disputes we may encounter from time to time with third parties regarding our use of their intellectual property, could harm our operations and prospects.

In the ordinary course of business, our institutions develop intellectual property of many kinds that is or will be the subject of patents, copyrights, trademarks, service marks, domain names, agreements, and other registrations. Our institutions rely on agreements under which we obtain rights to use course content developed by faculty members and other third-party content experts.

We cannot ensure that any measures we and our institutions take to protect our intellectual property or obtain rights to the intellectual property of others will be adequate, or that we have secured, or will be able to secure, appropriate protections for all of our institutions’ proprietary rights in the U.S. or foreign jurisdictions, or that third parties will not infringe upon or violate the proprietary rights of our institutions. Despite our efforts to protect these rights, third parties may attempt to develop competing programs or copy aspects of our institutions’ curriculum, online resource material, quality management, and other proprietary content. Any such attempt, if successful, could adversely affect our institutions’ business. Protecting these types of intellectual property rights can be difficult, particularly as it relates to the development by our institutions’ competitors of competing courses and programs.

intellectual property rights can be difficult, particularly as it relates to the development by our institutions’ competitors of competing courses and programs.

Our institutions may encounter disputes from time to time over rights and obligations concerning intellectual property and may not prevail in these disputes. Third parties may raise a claim against our institutions alleging an infringement or violation of their intellectual property. Some third-party intellectual property rights may be extremely broad, and it may not be possible for our institutions to conduct operations in such a way as to avoid disputes regarding those intellectual property rights. Any such dispute could subject our institutions to costly litigation and impose a significant strain on our financial resources and management personnel regardless of whether that dispute has merit. Our insurance may not cover potential claims of this type adequately or at all, and our institutions may be required to alter the content of their courses or pay monetary damages, which may be significant.

We may incur liability for the unauthorized duplication or distribution of course materials posted online for course discussions.

In some instances, our institutions’ faculty members or students may post various articles or other third-party content online in course discussion boards or in other venues. The laws governing the fair use of these third-party materials are imprecise and adjudicated on a case-by-case basis, which makes it challenging to adopt and implement appropriately balanced institutional policies governing these practices. Third parties may raise claims against us, our institutions, or our institutions’ faculty members or students for the unauthorized duplication of this material. Any such claims could subject us and our institutions to costly litigation, impose a significant strain on financial resources and management personnel, and harm our institutions’ reputations and relationships with members of the military and government, regardless of whether the claims have merit. Our insurance may not cover potential claims of this type adequately or at all, and we may be required to pay monetary damages and our institutions may be required to alter the content of their courses.

litigation, impose a significant strain on financial resources and management personnel, and harm our institutions’ reputations and relationships with members of the military and government, regardless of whether the claims have merit. Our insurance may not cover potential claims of this type adequately or at all, and we may be required to pay monetary damages and our institutions may be required to alter the content of their courses.

We rely on dividends, distributions and other payments, advances, and transfers of funds from our operating subsidiaries to meet our obligations and to fund acquisitions and certain investments.

We rely on dividends, distributions and other payments, advances, and transfers of funds from our operating subsidiaries to meet our obligations and to fund acquisitions and certain investments and generate all of our operating income through our subsidiaries. As a result, we rely on dividends and other payments or distributions from our operating subsidiaries to meet our obligations, including payments of principal and interest on our debt and dividends on our Series A Senior Preferred Stock, and to fund acquisitions and investments. The ability of our operating subsidiaries to pay dividends or to make distributions or other payments to us depends on their respective operating results and may be restricted by, among other things, the laws of their respective jurisdictions of organization, regulatory requirements such as obligations to maintain certain restricted cash or post letters of credit, financial performance, accreditation requirements, agreements entered into by those operating subsidiaries, and the covenants of any future obligations that we or our subsidiaries may incur. For example, due to financial performance, RU ~~and HCN~~ did not pay a ~~dividend and GSUSA did not make a~~ distribution ~~to APEI~~ in 2023 orand 2024~~. Furthermore~~, inand ~~order~~HCN tohas ~~demonstrate~~not ~~compliance~~paid ~~with regulatory metrics related to our operations in Florida, in the fourth quarter of 2024 we had to make~~ a ~~capital~~dividend ~~contribution~~since ~~to RU~~2019. If our operating subsidiaries are unable to pay dividends or make other payments or distributions, and we are instead required to fund their operations, or we are otherwise required to keep capital in these operating subsidiaries, then our business, financial condition, and results of operations could be materially adversely impacted.

Legal proceedings, particularly class action lawsuits, may require human and financial resources, distract our management, and negatively affect our reputation and results of operations.

From time to time, we and our institutions have been and may be involved in various legal proceedings. InWe ~~recent years, we~~ have observed litigation brought against for-profit schools, including class actions brought by students and prospective students based on alleged misrepresentations about a school’s programs, “qui tam” lawsuits, investigations by state attorneys general into for-profit postsecondary education institutions, and compliance reviews or similar proceedings brought by regulatory agencies, which are described above under the heading “Risks Related to the Regulation of Our Industry”. Even if we are able to successfully defend against lawsuits or claims, such matters can be time-consuming, require significant human and financial resources to investigate and respond to claims brought in any future litigation, and may divert management’s attention from operating our business. Furthermore, such matters are unpredictable and could lead to larger payments or liabilities, including adverse regulatory action, monetary damages, fines, limitations, loss of Title IV funding, injunctions, or other penalties, including the requirement to make refunds, and, as a result, negatively affect our results of operations.

Risks Related to Our Technology Infrastructure

~~Transitioning~~We ~~outsourced~~have RUexpended, ~~marketing~~ and ~~information~~need ~~technology~~to ~~functions~~continue to ~~internal~~expend, ~~functions~~time, money, and ~~for~~resources ~~certain~~into our and our institutions’ information technology ~~functions~~, which may place a ~~managed~~strain ~~service~~on ~~provider~~our ~~may~~operational ~~not~~capacity beand ~~efficient~~budgets orthat ~~cost-effective~~could adversely affect our systems, orcontrols, ~~may~~and ~~pose~~operating ~~other~~efficiency, ~~operational~~and ~~challenges~~those of our institutions.

RU historically relied on Collegis for a variety of outsourced marketing services and information technology functions under one contract for marketing services and another for information technology services. We have ~~transitioned~~invested ~~the marketing~~ and ~~certain~~need ~~information~~to ~~technology~~continue ~~services back~~ to ~~our~~invest ~~operations~~capital, ~~and~~time, onand ~~April~~resources 1,to ~~2024,~~update asand ~~part~~innovate of our ~~technology~~information ~~transformation program~~technology, weincluding ~~transitioned portions of~~ our ~~technology~~hardware ~~function~~and tostudent-facing ~~a managed service provider for certain services including service desk~~systems, ~~student~~in ~~support,~~response ~~end~~to ~~user~~market ~~support,~~conditions and ~~network~~evolving ~~management~~user ~~and operations~~expectations. ~~The~~These ~~second~~investments ~~phase~~have ~~of the technology transformation program, which~~ included ~~the~~and ~~insourcing~~may ofin the ~~information~~future ~~technology~~include ~~functions~~replacing tolegacy ~~APEI~~infrastructure, ~~for~~introducing ~~our~~new RUdigital ~~Segment~~capabilities, and ~~the~~integrating ~~outsourcing~~acquired ofsystems. ~~certain~~For ~~services to a managed service provider~~example, ~~was~~in ~~substantially~~April ~~completed as of September~~ 2024., ~~This~~APUS ~~transition~~announced ~~has~~its ~~caused~~plan ~~and~~to ~~may~~expand ~~continue~~its reach to ~~cause~~become usa toglobal ~~incur~~digital ~~additional~~university ~~expense~~that ~~related~~integrates toemerging ~~transferring~~technology ~~assets~~ and ~~services.~~enhanced ~~The~~teaching ~~complexity~~ and ~~breadth~~learning ofopportunities ~~this~~for ~~insourcing~~faculty and ~~outsourcing~~students. ~~creates~~We ~~inherent~~have ~~risks,~~also ~~including~~made ~~the~~investments ~~risk~~to ofintegrate ~~inefficiencies~~the ~~and~~technology ~~significant~~system ~~disruption~~ of ~~typical~~RU ~~information~~in ~~technology~~recent ~~and~~years. ~~business~~In ~~processes~~addition, as ~~new~~discussed ~~operations~~in ~~come~~greater ~~online,~~detail ~~a decrease~~ in ~~quality~~“Business or– ~~speed~~Information ~~of service~~Technology”, ~~and~~in ~~unexpected~~2026, ~~additional~~we ~~expenses.~~plan ~~For~~to ~~more~~begin onimplementing ~~the~~significant ~~risks~~changes ~~related~~ to ~~our~~or ~~use~~replacing ofcertain acore ~~managed~~student ~~service~~information ~~provider,~~and ~~see~~services ~~the~~platforms ~~Risk~~of ~~Factor~~APUS, ~~with~~RU, ~~the~~and ~~caption~~HCN. ~~beginning~~We ~~“Significant~~will ~~system~~likely ~~disruptions~~make tosimilar ~~our~~investments ~~computer~~for ~~networks,~~any ~~technology~~other ~~infrastructure,~~business orwe ~~online~~may ~~classroom~~acquire ~~infrastructure,~~in ~~or to~~ the ~~networks,~~future ~~infrastructure,~~ and ~~systems,~~the ~~or business of third parties…”~~Combination.

WeOur ~~have~~efforts ~~expended~~to maintain, improve, and ~~need~~replace toinformation ~~continue~~technology tosystems ~~expend~~may ~~time,~~not ~~money~~be successful, ~~and~~may ~~resources~~cost ~~into~~more ~~our~~than ~~and~~expected, may increase our ~~institutions’~~level ~~information~~of ~~technology~~spending, not all of which can be capitalized, may ~~place~~take alonger ~~strain~~than onexpected or require us to devote more of our ~~capacity~~information ~~that~~technology ~~could~~resources than expected, or may otherwise disrupt our operations or adversely affect our ~~systems~~financial condition. Furthermore, ~~controls~~hardware, software, and ~~operating~~instructional ~~efficiency~~technologies may become outdated faster than anticipated, requiring more frequent upgrades or replacements. As a result of replacing outdated hardware, software, technologies, or other technology-related assets, we have in the past had, and ~~those~~may in the future have, assets that become impaired, which may increase our risk of a cybersecurity incident. Also, the nature and age of our ~~institutions~~current information technology may limit our business opportunities if we are unable to improve and replace technology-related assets or information technology systems successfully or at all. Faculty, staff, or students may resist changes to current technologies or fail to use

We have invested and need to continue to invest capital, time, and resources to update our information technology, including our hardware and student-facing systems, in response to competitive pressures in the marketplace and student expectations, including data analytics, AI interactive and immersive user and learning experience technologies such as those that leverage AI, virtual and augmented reality, multi-channel customer engagement, and robotic process automation, to update or replace older systems and infrastructure, and to enhance functionality. For example, in April 2024, APU announced its plan to expand its reach to become a global digital university that integrates emerging technology and enhanced teaching and learning opportunities for faculty and students. In addition, we have made investments to integrate the technology systems of RU and GSUSA and will likely have to make similar investments for any other business we may acquire in the future, and the Combination. The nature and age of our current information technology may limit our business opportunities, and our efforts to maintain and improve our information technology systems may not be successful, may cost more than expected, may increase our level of spending, not all of which can be capitalized, may take longer than expected or require us to devote more of our information technology resources than expected, or may otherwise adversely affect our financial condition. As a result, replacing outdated technology, software, or other technology related assets, we have in the past had and may in the future have assets that become impaired. We continually evaluate APUS’s customized student information and services system, PAD, for possible changes and upgrades and anticipate that we will eventually make significant changes to or replace that system, as well. In addition, failure to address poor data quality and integrity as well as a lack of consistency and standardization in defining, collecting, managing, using, and storing data may adversely affect our business and results of operations.

If we are unable to increase the capacity of our institutions’ technology resources or update their resources appropriately, their ability to handle future growth, to attract or retain students, and our financial condition and results of operations could be adversely affected. Similarly, even if we are able to increase the capacity of our institutions’ resources and update their resources appropriately, our financial condition and results of operations could be adversely affected by an increased level of spending.

Increased use of AI may present operational, reputational, legal, regulatory, and competitive risks and could result in additional costs, each of which could materially and adversely affect our business, financial condition, and results of operations.

We are making investments in the use of AI throughout our business. We plan to increase our use of systems and tools that incorporate AI-based technologies for students, employees, faculty, and staff. AI is an emerging technology and, as such, presents the following inherent risks:

~~•Other~~newly ~~postsecondary~~adopted ~~institutions~~technologies ~~may~~effectively. ~~more~~In ~~successfully~~addition, failure to address poor data quality and ~~quickly~~integrity ~~integrate~~as AIwell as a ~~means~~lack toof ~~facilitate~~consistency ~~business~~and ~~growth~~standardization in defining, ~~decrease~~collecting, ~~operational~~managing, ~~expenses~~using, and ~~improve~~storing ~~the~~data ~~student~~may ~~experience,~~adversely ~~which~~affect our business and results of operations and may ~~cause~~subject us to becomplex ~~unable~~legal or contractual obligations. Furthermore, we may leverage technology systems that are subject to ~~attract~~evolving orfederal, ~~retain~~state, ~~students~~and orinternational ~~faculty~~privacy, accessibility, and ~~staff.~~data protection laws, which may increase costs and complexity and subject us to regulatory scrutiny and civil litigation.

~~•We~~If ~~may~~we beare unable to ~~implement~~expand AIor ~~technologies~~update inthe acapacity ~~cost-effective~~of ~~manner~~our orinstitutions’ intechnology ~~manner~~resources ~~that~~appropriately, ~~appeals~~their orability isto ~~satisfactory~~support tofuture ~~current~~growth, attract or ~~prospective~~retain students, ~~relative~~and toour ~~other~~financial ~~institutions~~condition and results of operations could be adversely affected. Even if capacity is expanded or updated, higher levels of spending may still negatively impact our financial condition and results of operations.

•AI may hallucinate or be error-prone, demonstrate biases or discriminatory practices and responses, and its use may result in other perceived or actual legal, compliance, privacy, security, and ethical risks.

•Due to changing regulatory conditions and related compliance obligations and otherwise, may be unable to develop effective policies and provide adequate training regarding proper use of AI, which could lead to misuse by employees, faculty, and staff. AI may also subject to misuse by students.

•While AI technologies may help provide more tailored or personalized learner experiences, its use this manner, and the associated risks, including the risks of increased plagiarism, cheating, and academic integrity, is subject to ongoing debate in the education industry.

•The use of AI technologies may make us more susceptible to cybersecurity incidents that affect the personal data of end users of AI applications. Such cybersecurity incidents may be more complicated to discover due to the nature of AI.

•Compliance with new or changing laws, regulations, or industry standards relating to AI may impose significant operational costs and may limit our ability to develop, deploy, or use AI technologies.

•Any disruption or failure in our AI systems or infrastructure could adversely impact our operations.

Some or all of the foregoing risks could result in additional costs or materially and adversely affect our business, financial condition, reputation, and results of operations.

Significant system disruptions to our computer networks, technology infrastructure, or online classroom infrastructure, or to the networks, infrastructure, systems, or business of third parties, could negatively impact our ability to generate revenue and could damage our reputation, limiting our ability to attract and retain students.

The performance and reliability of our and our institutions’ networks and technology infrastructure, including those of third parties’ systems we use or rely on, is critical to our operations and our institutions’ reputation and ability to attract and retain students. Any system error or failure, including as a result of outages and other difficulties that may result from having or relying on outdated systems or infrastructure, or a sudden and significant increase in bandwidth usage, could interrupt our or our institutions’ ability to operate and could result in the unavailability of our online classrooms, preventing students from accessing their courses and adversely affecting our results of operations. In addition, our institutions’ technology infrastructure, and the technology infrastructure of our third-party vendors, could be vulnerable to interruption or malfunction due to events beyond our control, including natural disasters, cyber-attacks, mistakes or malfeasance by our workforce, terrorist activities, and telecommunications failures, as well as our own failure to fully develop or test our business continuity and disaster recovery plans.

At APUS, PAD has been predominantly developed in-house, with limited support from outside vendors. To the extent that we have utilized third-party vendors to provide certain software products for our systems, we have generally needed to integrate those products into, and ensure that they function with, PAD. We continuously work on upgrades to modernize the architecture of PAD, and our employees devote substantial time to its development and to the successful integration of third-party products into PAD. To the extent that we face system disruptions, malfunctions or vulnerabilities with PAD or the failure of PAD to meet internal or industry standards, or lose employees with experience on our systems, we may not have the capacity to address such disruptions, malfunctions, vulnerabilities, or failures or to continue to administer or make adequate modifications to PAD with our internal resources, and we may not be able to identify outside contractors with expertise relevant to our custom system.

We rely on third parties for certain information technology capabilities ~~and managed services~~. We use third-party services such as cloud computing and software-as-a-service for certain aspects of our operations, and a managed service provider for certain services, including service desk, student support, ~~end~~and other student-facing technology functions, end-user support, and network management and operations, and are reliant on the capabilities of the third parties for such functions. Reliance on these providers exposes us to risks inherent in outsourced relationships, including reduced control over systems and processes, potential service disruptions, delays in cybersecurity incident response, and challenges in maintaining consistent service quality. These third parties may take actions beyond our control or experience financial, organizational, or other disruptions that could adversely affect our access to their services, delay or otherwise impact our ability to address cybersecurity incidents, or increase costs, including by discontinuing or limiting our access to their platforms, modifying or interpreting their terms of service or other policies in a manner that impacts our ability to run our business and adversely impacts our operations, or providing us with ~~service~~ quality or speed of service that does not meet our expectations, standards, or needs or those of our students or employees. Differences between our cybersecurity practices and standards, and those of our third-party service providers may increase the likelihood of cybersecurity incidents. If a third party’s controls, monitoring, or incident response procedures are inadequate or misaligned with our practices and standards, threats may not be detected or contained in a timely manner. Moreover, if a third-party service provider fails to perform as expected, including with respect to contractual service-level obligations, or if services cannot be transitioned to alternative providers cost effectively in a timely manner, our operations, reputation, and results of operations could be adversely affected. There is no assurance that we will renew, or be able to renew, contracts with third parties that are subject to expiration or that ~~such~~any renewals will be on the same or substantially similar terms or on conditions that are commercially reasonable to us. Any transition of third-party services, whether to another vendor or directly to us or our institutions, could be difficult to implement and cause us to incur significant time and expense. ~~Any~~Reliance on a managed service provider may also expose us to service pricing increases or vendor financial instability. In addition, changes in the scope, pricing, or availability of outsourced services, or the termination or non-renewal of a provider agreement, could require us to incur significant ~~downtime~~transition costs or implement interim solutions that may not fully meet operational needs. Any significant downtime

or other interruption or disruption of these services, whether due to cyber-attacks, other cybersecurity incidents, or other causes, could adversely impact our operations and our business.

Any significant interruption in the operation of our or our vendors’ data centers or server rooms could cause a loss of data. Even with redundancy, a significant interruption in the operation of these facilities or the loss of institutional and operational data due to a natural disaster, fire, power interruption, act of terrorism, or another unanticipated catastrophic event, including as a result of climate change, may not be preventable. Any significant interruption in the operation of these facilities, including an interruption caused by the failure to successfully expand or upgrade systems, or to manage transitions and implementations, or a failure by us or our partners to promptly activate and execute our business continuity and disaster recovery plans could reduce the ability to manage network and technological infrastructure, which could adversely affect our institutions’ operations and reputations. Additionally, our institutions do not necessarily control the operation of the facilities hosting our technology infrastructure and may be required to rely on other parties to provide physical security, facilities management, and communications infrastructure services. If any third-party vendors encounter financial difficulties or other events beyond our control occur that cause them to fail to adequately secure and maintain their facilities or provide necessary connectivity or capacity, our institutions and their students may experience interruptions in service or the loss or theft of important data, which could adversely affect our financial condition.

Cybersecurity incidents could compromise sensitive information, including personal information, and cause system disruptions and significant damage to our business and reputation.

We process and maintain on our network systems certain information that is confidential, proprietary, personal, or otherwise sensitive, including financial and confidential business information. Our computer networks, and the networks of our third-party vendors or other third parties on which we rely, may be vulnerable to, without limitation, unauthorized access, bysocial ~~computer~~engineering ~~hackers,~~(including phishing), cyber-attacks (including ransomware, ~~computer~~malware ~~viruses~~attacks, unauthorized access attempts, and denial of service ~~attacks,~~and ~~malicious~~other ~~social~~unintentional ~~engineering~~intrusions ~~and~~or ~~other~~malicious cyber-attacks), computer viruses, and other interruptions, fraudulent schemes, or ~~security~~cybersecurity incidents, including vulnerabilities in software and software code. Cybersecurity incidents may be caused by a third party, including individuals or highly sophisticated organizations, or by employee error, negligence, or fraud. An individual or group, either internal or external, that circumvents security measures or exploits vulnerabilities could misappropriate confidential, proprietary, or personal information or cause interruptions or malfunctions in operations. In addition, errors in the storage, use, or transmission of confidential, proprietary, personal, or otherwise sensitive information, errors with our network systems or those on which we rely, or intentional or unintentional disruption to or misuse, corruption, or loss of such information could impact student or employee privacy. Furthermore, these incidents could impact our or our institutions’ ability to operate and could result in athe ~~breach~~unavailability of ~~student~~our oronline ~~employee~~classrooms, ~~privacy~~preventing students from accessing their courses, and adversely affecting our results of operations. Our network systems and the systems maintained by our third-party providers have been subject to attempts to gain unauthorized access, ~~breaches,~~ and other system disruptions, although to date no such incidents have been material to us, and these and similar incidents could happen again. It may be difficult to anticipate or to promptly detect ~~immediately~~ such incidents, the scope of such incidents and the damage caused thereby, and we may not yet be aware of, or know the scope of and damage caused by, prior incidents. Due to the complexity and interconnectedness of our network systems, and those upon which we rely, the process of upgrading or patching our protective measures could itself create a risk of cybersecurity issues or system disruptions for us, as well as for educational institutions who rely upon, or have exposure to, such network systems. If we or third parties with which we engage for critical business processes or with access to our network systems, or to confidential, proprietary, personal, or otherwise sensitive information experience cyber-attacks or ~~security~~cybersecurity incidents in the future or we learn of a past cybersecurity incident that we or third parties have experienced, we may be required to expend significant resources to investigate, remediate, recover from, or disclose these incidents, or to address resulting regulatory scrutiny or investigations, including as a result of a failure to disclose the incident to the extent required by law or in a timely fashion, litigation, misstated or unreliable data, or other impacts. Such incidents and failures could result in imposition of penalties, disruption to our operations, damage to our reputation, or damage to our network systems or sensitive information, any of which could have a material adverse effect on our business and financial condition. Our increased use and reliance on cloud computing could expose us to additional risks. While our contractual arrangements with third-party providers such as cloud computing vendors ~~provide~~include ~~for~~provisions requiring the protection of information, we cannot control these vendors or their systems and cannot guarantee that an incident will not occur in the future.

We use external vendors to perform security assessments on a periodic basis to review and assess our information security. We utilize this information to audit ourselves, monitor the security of our technology infrastructure, and assess whether and how to prioritize the allocation of resources to protect data and systems. However, we cannot ensure that these security assessments and audits will identify or appropriately categorize all relevant risks or result in sufficient protection of our computer networks against cyber-attacks and ~~security~~other cybersecurity incidents. Similarly, although we require our third-party vendors contractually to maintain a level of security that is acceptable to us and work closely with vendors to address potential and actual security concerns and attacks, we cannot ensure that they will protect confidential, proprietary, personal, or otherwise sensitive information on their systems. Incidents at third-party vendors may also affect our network systems. System disruptions and security incidents affecting our online computer networks, technology infrastructure, or online classroom infrastructure, or to the networks, infrastructures, and systems of third parties could have an adverse effect on our financial condition. While we may be entitled to damages if our third-party service providers fail to satisfy their security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.

Wesensitive ~~face~~information anon ~~ever-increasing~~their ~~number of threats to our computer networks~~ systems,. ~~including~~Incidents ~~unauthorized~~at ~~activity~~third-party ~~and~~vendors ~~access,~~or ~~malicious penetration, system viruses, ransomware, phishing,~~ other ~~malicious~~third ~~code~~parties ~~and~~on ~~vulnerabilities~~which inwe ~~software~~rely ~~and~~may ~~software~~also ~~code~~affect ~~and cyber-attacks, including individual or organized cyber-attacks~~us. ~~Any~~System ofdisruptions ~~these~~and ~~threats~~cybersecurity ~~could~~incidents ~~impact~~affecting our ~~security~~online ~~and~~computer ~~disrupt~~networks, ~~our~~technology ~~systems.~~infrastructure, ~~These~~or ~~risks~~online ~~increase~~classroom ~~when~~infrastructure, weor ~~make changes~~ to ~~our network systems or implement new ones. Our size makes us a prominent target for hacking and other cyber-attacks within~~ the ~~education industry. From time to time~~networks, ~~we experience security events and incidents~~infrastructures, and ~~these~~systems ~~reflect an increasing level~~ of ~~sophistication,~~third ~~organization,~~parties ~~and~~could ~~innovation. We~~ have ~~devoted~~an ~~and~~adverse ~~will~~effect ~~continue~~on ~~to devote significant resources to the security of~~ our ~~computer~~financial ~~systems,~~condition. ~~but~~While ~~they~~we may ~~still~~ be ~~vulnerable~~entitled to ~~these~~damages ~~threats~~if ~~and~~our ~~may~~third-party ~~subsequently~~service beproviders ~~deemed~~fail to ~~have~~satisfy ~~been~~their ~~inadequate by regulators or courts. The lack of prescriptive measures in data~~ security-related ~~and~~obligations ~~cybersecurity laws could contribute~~ to ~~any such regulator or court findings of inadequacy. Although we maintain insurance in respect of these types of events~~us, ~~there~~any isaward nomay ~~assurance that available insurance proceeds would~~ be ~~adequate~~insufficient to ~~compensate~~cover usour ~~for~~ damages, ~~sustained~~or ~~due~~we tomay ~~these~~be ~~events.~~unable ~~Higher~~to ~~education~~recover ~~institutions~~such ~~also face a growing array of AI-based threats~~award.

We face an ever-increasing number of threats to our computer network systems, including unauthorized activity and access, malicious penetration, system viruses, ransomware, phishing, other malicious code and vulnerabilities in software and software code and cyber-attacks, including individual or organized cyber-attacks. Any of these threats could impact our security and disrupt our systems. These risks increase when we make changes to our network systems or implement new ones. Our size makes us a prominent target for hacking and other cyber-attacks within the education industry. From time to time, we experience security events and incidents, and these reflect an increasing level of sophistication, organization, and innovation. We have devoted and will continue to devote significant resources to the security of our computer systems, but they may still be vulnerable to these threats and may subsequently be deemed to have been inadequate by regulators or courts. Threat actors may use AI tools to automate and enhance cybersecurity attacks against us. We employ measures designed to detect cybersecurity threats, including AI-based tools, but these threats could become more sophisticated and harder to detect, which may pose significant risks to the security of our information systems and data. Further, the lack of prescriptive measures in data security and cybersecurity laws could contribute to any such regulator or court findings of inadequacy. Although we maintain insurance in respect of these types of events, there is no assurance that available insurance proceeds would be adequate to compensate us for damages sustained due to these events. Increased regulation of data collection, use, and retention practices, including self-regulation and industry standards, changes in existing laws and regulations, including changes in interpretation, enactment of new laws and regulations, and increased enforcement activity could increase our cost of compliance and operation, limit our ability to grow our business or otherwise harm us.

Failure to comply with privacy laws or regulations could have an adverse effect on our business.

~~Various~~As discussed in greater detail in “Business – Regulatory Environment – Student Financing Sources and Related Regulations and Requirements – Department of Education – Other Department of Education and Privacy Regulation”, various federal, state, and international laws and regulations govern the collection, use, retention, sharing, and security of personal information, including student, faculty, alumni, and consumer data. These laws could be applied in a manner that results in costs, the imposition of fines and operational conditions on our business. For example, if an institution fails to comply with FERPA, ED may require corrective actions by the institution or may terminate an institution’s eligibility to participate in Title IV programs. Failure to comply with the applicable GLBA requirements may result in FTC enforcement, which could include the imposition of conditions, penalties, monitoring, and oversight. In addition, this area of the law and interpretations of applicable laws and regulations differ and are evolving. State and federal legislatures in the ~~U.S.~~United States and countries globally have been enacting and considering new legislation. These evolving laws and interpretations are difficult to predict, may impose conflicting or unclear obligations, and could adversely impact our business, including, without limitation, by increasing compliance costs, by for example, restricting use or sharing of consumer data, including for marketing or advertising purposes. ~~The~~Claims ~~CCPA,~~of asfailure ~~amended~~ by ~~the~~us ~~CPRA,~~or ~~and~~third ~~related~~parties ~~regulations~~who isprocess andata ~~example of a U.S. state law that imposes disclosure obligations~~ on ~~businesses for individuals’ personal information and affords those individuals rights relating to their personal information that may affect~~ our ~~ability~~behalf to ~~use~~comply ~~personal information. The CCPA provides for penalties and includes a private right to action for certain data breaches. Other comprehensive state privacy laws that our institutions may be subject to~~ with ~~varying requirements also came into effect in 2023. In addition,~~ our institutions’ ~~may~~privacy ~~be subject to the GDPR~~policies, ~~which~~public ~~has~~statements ~~extensive~~regarding ~~requirements~~our ~~relevant to businesses~~ handling of personal information, ~~about individuals in the EU. These laws’ applicability to us could result in substantial compliance costs~~ or ~~liabilities.~~applicable ~~Non-compliance with the GDPR could result in a fine for certain activities of up to 20 million Euros or 4% of an organization’s global annual revenue~~federal, ~~whichever is higher~~state, ~~per~~and ~~violation.~~international ~~Claims of failure to comply with our institutions’ privacy policies or applicable~~ laws or regulations could form the basis of governmental or private-party actions against us. Such claims and actions may cause damage to our institutions’ reputation and could have an adverse effect on our financial condition. The enactment of additional privacy and data security laws or amendments to existing laws could result in significant costs and require us to change some of our business practices.

Our increased use of AI may present operational, reputational, legal, regulatory, and competitive risks and could result in additional costs, each of which could materially and adversely affect our business, financial condition, and results of operations.

We are making investments in the use of AI across our business, with plans to increase our use of systems and tools that incorporate AI-based technologies for students, employees, faculty, and staff. We are implementing AI governance structures, policies, and safety controls to promote security and responsible use, but these measures may not fully mitigate the risks associated with rapid adoption of AI. AI is an emerging technology and, as such, presents the following inherent risks:

•Other postsecondary institutions may more successfully and quickly integrate AI as a means to facilitate business growth, reduce operating expenses, and improve the student experience, which may result in our reduced ability to attract or retain students, faculty, and staff.

•We may be unable to implement AI technologies in a cost-effective manner or in a manner that appeals or is satisfactory to current or prospective students relative to other postsecondary institutions.

•Due to evolving regulatory conditions and related compliance obligations and otherwise, we may be unable to develop or maintain effective policies and provide adequate training regarding proper use of AI, which could lead to misuse by employees, faculty, and staff. AI may also subject to misuse by students.

•Although AI technologies may help provide more personalized learning experiences, its use in this manner, and the associated risks, including the risks of increased plagiarism, cheating, and academic integrity, is subject to ongoing debate in the education industry.

•The use of AI technologies may make us more susceptible to cybersecurity incidents, including those affecting personal or confidential information, and such incidents may be more complicated to discover due to the nature of AI.

•Compliance with new or changing laws, regulations, and industry standards related to AI may impose significant operational costs and may limit our ability to develop, deploy, or use AI technologies.

•We have and may continue to communicate externally regarding AI-related initiatives, which subjects us to the risk of allegations of inaccurate or misleading statements regarding our ability to avail ourselves of the potential benefits of AI technologies.

•Any disruption or failure of our AI systems, tools, or supporting infrastructure could adversely impact our operations.

Some or all of the foregoing risks could result in additional costs, subject us to regulatory action or increased regulatory scrutiny, litigation, reputational harm, or other liability, and could materially and adversely affect our business, financial condition, reputation, and results of operations.

Risks Related to Owning our Common Stock

The price of our common stock may be volatile, and as a result returns on an investment in our common stock may be volatile.

Trading in our common stock has historically been limited and, at times, volatile. An active trading market for our common stock may not be sustained, and the trading price of our common stock may fluctuate substantially. The price of our common stock may fluctuate as a result of some or all of the following:

•price and volume fluctuations in the overall stock market from time to time;

•significant volatility in the market price and trading volume of comparable companies;

•the actual, anticipated, or perceived impact of changes in the political environment, government policies, laws and regulations, or similar changes made by accrediting bodies;

•adverse rulings or findings by relevant governmental bodies;

•general economic conditions and trends;

•catastrophic events;

•actions of others in our industry, including but not limited to acquisitions, investments, or strategic alliances.

•actual or anticipated changes in our earnings, our institutions’ net course registrations or enrollments, or seasonal and other fluctuations in our results of operations as a result of variances to the student populations of our institutions and related fluctuations in expenses;

76•potential or actual government shutdowns, government budgets and federal workforce uncertainty;

•our ability to meet or exceed, or changes in, the expectations of securities analysts, or the extent or accuracy of analyst coverage of our company;

•the depth and liquidity of the market for our common stock;

•purchases or sales of large blocks of our stock;

•future issuances ofor ~~common~~repurchases ~~stock~~of orour ~~other~~common ~~securities~~stock;

•recruitment or departure of key personnel;

•regulatory burdens and risks associated with a change of control or ownership;

•an inability to realize in full anticipated benefits of acquisitions; or and

•investment strategies or other actions by those trading in our stock.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Because of the potential volatility of our stock price, we may become the target of securities litigation in the future. Securities litigation could result in substantial costs and monetary damages and could divert ~~management’s attention and resources from our business, and our insurance may not be available or adequate to cover these claims.~~

management’s attention and resources from our business, and our insurance may not be available or adequate to cover these claims.

We may face risks associated with stockholder activism.

Publicly traded companies are subject to campaigns by stockholders advocating corporate actions related to matters such as corporate governance, operational practices, and strategic direction. We have previously been subject to stockholder activism and demands and may be subject to further activism and demands in the future. Such activism could interfere with our ability to execute our business plans, be costly and time-consuming, disrupt our operations, and divert the attention of management, any of which could have an adverse effect on our business or the price of our common stock.

Our future results of operations and financial condition may not meet our guidance or expectations.

We provide guidance on our expected results of operations, financial condition, and other measures. Such forecasts are speculative and subject to risks and uncertainties, including those described in this “Risk Factors” section and elsewhere in this Annual Report, and reflect management’s estimates and assumptions as of the date of the guidance, which may turn out to be incorrect. Actual results may vary significantly from our guidance and could fall outside any range of expected outcomes we provide. Failure to successfully implement our plans or the occurrence of events or circumstances expressed or implied in this “Risk Factors” section, and any actions we may take to comply with the extensive regulatory framework applicable to our industry, including the 90/10 Rule, state law and regulations, and accrediting agency requirements, could result in actual results differing materially from our guidance, which could have a material adverse impact on our results of operations, cash flow, financial condition and the trading price of our common stock.

WePrior ~~have~~to ~~historically~~2024 ~~provided~~we only provided quarterly guidance but are now providing annual guidance to emphasize our focus on long-term value creation. Annual guidance, while based on outcomes and assumptions that we believe, at the time guidance is given, are reasonable, may to a greater extent than quarterly guidance be unable to reflect the impact of certain actions taken by us, changes in legislation, changes in U.S. government spending authorizations, regulatory actions, or accrediting agency decisions affecting any of our institutions, or other events, and may be less accurate than quarterly guidance.

~~Environmental, social, and governance, or ESG, matters and the perception of our activities in these areas by stakeholders may impact our business and reputation.~~78

Governmental authorities, non-governmental organizations, investors, external stakeholders, faculty, employees, and students are increasingly sensitive to ESG-related matters, such as diversity and inclusion, environmental stewardship, support for local communities, corporate governance and transparency, and addressing human capital matters in our operations. Our ability to compete could be affected by changing preferences and expectations of our stakeholders and our failure to meet their expectations. We risk negative stockholder reaction and activism, including from proxy advisory services, as well as damage to its brand and reputation, if we are perceived as not acting responsibly in key ESG areas. In addition, stakeholders may disagree with our ESG-related priorities and initiatives. If we do not meet the evolving and varied expectations of our stakeholders with respect to ESG-related matters, we could experience reduced enrollment, face reputational harm, be subject to adverse governmental action, or experience other negative impacts on our business and results of operations.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

Our Information Security Efforts

Cybersecurity Risk, Management, and Strategy

The performance, reliability, and security of the networks and technology infrastructure we use or rely on is critical to our operations, our institutions’ reputation, and our ability to attract and retain students. We have developed what we believe to be a robust cybersecurity program that incorporates a process of identifying and managing cybersecurity risks across the enterprise. As part of our cybersecurity risk management process, we identify risk by reviewing the elements within our technology stack and processes, including a full scan and identification process designed to cover all APEI’s digital and physical assets within the organization, covering hardware, software, data, and personnel. Assets are documented and assessed for their value, factoring in their significance and potential cost if compromised. We conduct a threat assessment for both internal (e.g., employees, contractors, etc.) and external (e.g., hackers, malware, etc.) cybersecurity threats, and we have established plans and actions to detect unauthorized activities. We engage third-party consultants to perform assessments, including annual penetration testing, and we maintain a risk register. The risk register includes documentation of identified risks, the potential impact and likelihood of occurrence, mitigation efforts and the required enterprise level response. Each of the identified risks is given a risk classification from low to high depending on the probability of occurrence and the severity of impact.

At least annually, we ~~conduct~~test ~~tabletop~~our ~~exercises~~incident toresponse ~~simulate various attacks~~processes, enhancing our preparedness against potential threats. These ~~tabletop~~ exercises are conducted with the support of third-party cybersecurity experts. We perform continuous monitoring and detection of our systems, networks, and data repositories for suspicious activities by leveraging a third-party that provides 24x7 comprehensive monitoring of activity that is outside the normal patterns for our day-to-day operations. Our information security team works to stay up to date on threat intelligence through partnerships with outside agencies. We accumulate security event data into our security information and event management, or SIEM, tool that tracks and monitors events providing a comprehensive view of how to respond to various threats.

We also have an internal information technology audit team that routinely scans the environment and documents our compliance efforts with regulations and standards that govern our business, such as the Sarbanes-Oxley Act, the Payment Card Industry Data Security Standard (PCI-DSS), the Health Insurance Portability and Accountability Act, FERPA, and the Gramm-Leach-Bliley Act Safeguards Rule.

Cybersecurity threats continue to evolve with the use of emerging technologies, such as AI. These threats can disrupt operations, compromise sensitive data, and erode trust. We strive to make sure that employees and contractors are up to date with their responsibility and understand the importance of their contributions to staying cyber secure through a robust training and education program. Employees and contractors are responsible for taking mandated cyber training on an annual basis. We also run phishing exercises on a routine basis to help ensure employees and contractors can recognize and report inappropriate activity and social engineering attempts.

We have a process of continuous improvement by incorporating lessons learned from attempted attacks and feedback from phishing exercises, among other learnings. We also have a third-party risk management process pursuant to which new and existing vendors undergo a structured review of their controls and systems, as well as a periodic review from our security team to help ensure vendors protect our data and systems. We seek to require our third-party vendors contractually to maintain a level of security that is acceptable to us.

We have not experienced any ~~risks~~negative impacts from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or that we believe are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition. We maintain specific insurance coverage to mitigate losses associated with certain cybersecurity incidents that impact our or our third parties’ information technology and information systems, but there can be no assurance that coverage would be adequate in relation to any incurred losses.

Our cybersecurity risk management process is a standalone process, but it is integrated with and informs our overall enterprise risk management program.

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Cybersecurity Governance

APEI’s Information Security Steering Committee, or the Steering Committee, consisting of the Interim Chief ~~Information~~Innovation and Technology Officer, also acting as Chief Information Security Officer, Chief Financial Officer, General Counsel, and the Chief Human Resources Officer, provides a level of oversight over our cybersecurity program. The Steering Committee meets quarterly and is briefed, among other things, on our cybersecurity program, how we are mitigating risks, any notable events that occurred, and phishing campaign results. In addition, the Steering Committee reviews the program for the proper funding and staffing of the information technology security department as well as alignment of the program with our strategic objectives. The Steering Committee reviews and ratifies security policies and helps ensure the proper controls are in place and being followed. The Steering Committee is a critical element to review the cybersecurity program against applicable federal and state regulations and its progress for planned improvements.

Our Interim Chief ~~Information~~Innovation ~~Officer~~ and ~~Chief~~Technology ~~Information Security~~ Officer ~~have~~has the primary responsibility for assessing and managing our material risks from cybersecurity threats. ~~Both~~The ~~the~~Interim Chief ~~Information~~Innovation ~~Officer~~ and ~~Chief~~Technology ~~Information Security~~ Officer ~~have~~has extensive experience in running and managing a cybersecurity program both in commercial enterprises and government agencies. In assessing and managing our material risks from cybersecurity threats the Interim Chief ~~Information~~Innovation ~~Officer~~ and ~~Chief~~Technology ~~Information Security~~ Officer ~~utilize~~utilizes real time monitoring tools, alerts, and dashboards, proactively hunt for threats, and assess capabilities through penetration testing and table top exercises, as well as access and utilize third party resources.

We have established structured processes and mechanisms, including incident reporting and escalation, and a comprehensive incident response and communication plan, in the event of a cybersecurity incident. These plans consist of internal reporting and communication, including to the Chief Executive Officer, Chief Financial Officer, and General Counsel, and, as appropriate, management, as well as external reporting, including notifying the Board of Directors, and proper agencies as appropriate. The Interim Chief ~~Information~~Innovation ~~Officer~~ and ~~the~~Technology ~~Chief Information Security~~ Officer ~~report~~reports significant risks from cybersecurity threats, the level of risk, and any material cybersecurity incidents to the Board of Directors, as well as annually review with the Board of Directors the budget, utilization of systems, processes, and controls in place to address cybersecurity risks and management. The Interim Chief ~~Information~~Innovation ~~Officer~~ and~~/or~~ ~~the~~Technology ~~Chief Information Security~~ Officer ~~update~~updates the Board of Directors no less than quarterly on significant developments in these areas.

For more information on our information technology investments and their effects on our results of operations, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview,” and for more information regarding risks related to our information technology, refer to “Risk Factors – Risks Related to Our Technology Infrastructure”.

ITEM 2. PROPERTIES

APEI and APUS together operate administrative facilities in Charles Town, West Virginia, which also serves as our corporate headquarters, and Ranson, West Virginia. ~~This~~These ~~includes~~facilities ~~six~~comprise four owned facilities totaling approximately ~~211~~60,000 square feet. APEI’s administrative offices also include approximately 3,100 square feet of leased space in Fort Lauderdale, Florida, under a lease that expires in January ~~2026, and, until July 2024, leased administrative office space in suburban Baltimore, Maryland~~2029. AsExcess ~~of December 31, 2024, excess~~ real property located in Charles Town, West Virginia, totaling approximately 151,000 square feet, is classified as assets held for sale as of December 31, 2024, was sold in June 2025. For additional details regarding assets held for sale, please refer to “Note 65. Assets Held For Sale” included in our Consolidated Financial Statements.

RU leases ~~administrative~~18 ~~office~~campuses ~~space~~located across five states. Not included in ~~Minneapolis,~~these ~~Minnesota~~counts ~~and,~~are ~~until~~the ~~July~~Green ~~2024~~Bay, ~~leased~~Wisconsin, ~~administrative~~campus ~~office~~that ~~space~~was inclosed ~~suburban~~effective ~~Chicago,~~December ~~Illinois~~31, 2025 and ~~leases~~the 20Wausau, ~~campuses~~Wisconsin, ~~located~~campus inwhich ~~six~~RU ~~states.~~intends ~~This~~to ~~administrative~~close ~~office~~on ~~and~~December 31, 2026. The 18 campuses include a total of approximately ~~569~~500,000 square feet combined. ~~Lease~~Prior ~~terms~~to ~~and~~October ~~extension~~31, ~~options~~2025, ~~vary~~RU byleased ~~location~~administrative ~~with~~office ~~expiration~~space ~~dates~~in ~~ranging~~Minneapolis, ~~from 2025 to 2034~~Minnesota.

HCN leases an administrative office located in suburban Columbus, Ohio, and leases eight campuses located in three states. This administrative office and campuses include a total of approximately ~~224~~228,000 square feet combined. ~~Lease terms and extension options vary by location with expiration dates ranging 2025 to 2034.~~

~~GSUSA~~RU ~~leases classroom~~ and ~~administrative~~HCN ~~office~~lease ~~space~~terms ~~in Washington, D.C.~~ and ~~administrative~~extension ~~office~~options ~~space~~vary inby ~~Honolulu,~~location ~~Hawaii~~ with ~~approximately~~expiration ~~62,000~~dates ~~square~~ranging ~~feet~~from ~~combined,~~2026 ~~under~~to ~~operating leases that expire through 2036~~2034.

We believe our existing facilities are in good operating condition and are adequate and suitable for the conduct of our business.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we have been and may be involved in various legal proceedings. We currently have no material legal proceedings pending.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock trades on the Nasdaq Global Select Market under the symbol “APEI”.

Holders

As of March 510, ~~2025~~2026, there were approximately ~~420~~386 holders of record of our common stock.

Common Stock Dividends

We have not historically paid dividends on our common stock, and our credit agreement contains limitations on the payment of future dividends. The payment of any dividends on our common stock in the future will be at the discretion of our Board of Directors and will depend upon our financial condition, results of operations, earnings, capital requirements, contractual restrictions, outstanding indebtedness, and other factors deemed relevant by our Board.

Performance Graph

The graph below compares the cumulative five-year total return of holders of American Public Education, Inc.’s common stock with the cumulative total returns of the S&P 500 index, the Nasdaq Composite index, a customized peer group of six companies that includes Covista Inc. (formerly known as Adtalem Global Education Inc.), Grand Canyon Education Inc., Perdoceo Education Corp, Strategic Education Inc., Lincoln Educational Services Corporation, and Universal Technical Institute, Inc. The graph assumes that the value of the investment in our common stock, in each index, and in the peer group (including reinvestment of dividends) was $100 on December 31, ~~2019~~2020, and tracks the value of those investments, respectively, through December 31, ~~2024~~2025.

8081

December 31, 2019

December 31, 2020

December 31, 2021

December 31, 2022

December 31, 2023

December 31, 2024

December 31, 2020

December 31, 2021

December 31, 2022

December 31, 2023

December 31, 2024

December 31, 2025

APEI

100.00

~~111~~73.2800

8140.2332

4431.8766

3570.2377

78124.7502

S&P 500

100.00

~~118~~128.4071

~~152~~105.3940

~~124~~133.7910

~~157~~166.5940

~~197~~196.0216

Nasdaq Composite

100.00

~~144~~122.9218

~~177~~82.0643

119.4522

~~172~~154.7748

~~223~~187.8714

Peer Group

100.00

8385.7426

71104.3972

87141.6978

~~118~~189.7299

~~159~~200.0965

The stock price performance included in the graph and table above is not necessarily indicative of future stock price performance.

Recent Sales of Unregistered Securities

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

On May 2, 2019, our Board of Directors authorized the repurchase of up to $35.0 million of shares of our common stock, and on December 5, 2019, our Board approved an additional authorization to repurchase up to $25.0 million of shares of our common stock. On March 16, 2023, our Board of Directors confirmed the availability under the 2019 share repurchase program to repurchase up to approximately $8.0 million of shares of our common stock. We fully expended this $8.0 million as of April 30, 2023, and repurchased a total of 1,335,357 shares of our common stock. On November 27, 2023, the Board of Directors authorized a new program to repurchase up to an additional $10.0 million of shares of our common stock and in the fourth quarter of 2023, we repurchased 180,409 shares of our common stock under this authorization, for an aggregate purchase amount of $1.6 million. In the aggregate, in 2023 we repurchased 1,515,766 shares of our common stock for $9.7 million. In January 2024, we repurchased an additional 251,146 shares of our common stock under the November 2023 purchase

authorization for an aggregate purchase amount of $2.8 million. Effective February 1, 2024, the Company ceased purchases under this purchase authorization.

As of December 31, 2024, approximately $6.0 million remained available under the November 2023 purchase authorization. Our credit agreement includes restrictions on our ability to repurchase our common stock, and the terms of our Series A Senior Preferred Stock require the consent of the holders of at least 60% of the then outstanding shares of our Series A Senior Preferred Stock in order for us to repurchase more than $30.0 million of our common stock in the aggregate.

Subject to market conditions, applicable legal requirements, and other factors, repurchases may be made from time to time in the open market or in privately negotiated transactions. The authorization does not obligate us to acquire any shares, and purchases may be commenced or suspended at any time based on market conditions and other factors as we deem appropriate.

There were no share repurchases during the three months ended December 31, 2024. For additional information regarding our share repurchases please refer to “Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 12. Stockholders’ Equity – Repurchase”.

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) (3)
October 1, 2024 - October 31, 2024	—	$	—	—	549,754	$	5,979,687
November 1, 2024 - November 30, 2024	—	—		—	549,754	5,979,687
December 1, 2024 - December 31, 2024	—	—		—	549,754	5,979,687
Total	—	$	—	—	549,754	$	5,979,687

(1)On December 9, 2011, our Board of Directors approved a stock repurchase program for our common stock under which we could annually purchase up to the cumulative number of shares issued or deemed issued in that year under our equity incentive and stock purchase plans. Repurchases may be made from time to time in the open market at prevailing market prices or in privately negotiated transactions based on business and market conditions. The stock repurchase program does not obligate us to repurchase any shares, may be suspended or discontinued at any time, and is funded using our available cash.

(2)On May 2, 2019, our Board of Directors authorized the repurchase of up to $35.0 million of shares of our common stock, and on December 5, 2019, our Board approved an additional authorization of up to $25.0 million of shares. Further, on November 27, 2023, our Board approved an additional authorization of up to $10.0 million of shares. We may purchase shares at management’s discretion in the open market, in privately negotiated transactions, in transactions structured through investment banking institutions, or a combination of the foregoing. We may from time to time enter into Rule 10b5-1 plans to facilitate repurchases of shares under this authorization. The amount and timing of repurchases are subject to a variety of factors, including liquidity, cash flow, stock price, and general business and market conditions. We have no obligation to repurchase shares and may modify, suspend, or discontinue the repurchase program at any time. The authorization under this program is in addition to our repurchase program under which we may annually purchase up to the cumulative number of shares issued or deemed issued in that year under our equity incentive and stock purchase plan.

(3)During the three-month period ended December 31, 2024, 799 shares of common stock were deemed to have been repurchased for common stock forfeited by employees to satisfy minimum tax-withholding requirements in connection with the vesting of restricted stock grants.

fourth quarter of 2023, we repurchased 180,409 shares of our common stock under this authorization, for an aggregate purchase amount of $1.6 million. In the aggregate, in 2023 we repurchased 1,515,766 shares of our common stock for $9.7 million. In January 2024, we repurchased an additional 251,146 shares of our common stock under the November 2023 purchase authorization for an aggregate purchase amount of $2.8 million. Effective February 1, 2024, the Company ceased purchases under this purchase authorization.

As of December 31, 2025, approximately $6.0 million remained available under the November 2023 purchase authorization. Our credit agreement includes restrictions on our ability to repurchase our common stock.

On March 10, 2026, our Board of Directors authorized a common stock repurchase program of up to $50 million in the aggregate. The program replaces our prior repurchase authorizations, including the November 2023 purchase authorization and our prior repurchase authorization, pursuant to which we were authorized to purchase up to the cumulative number of shares issued or deemed issued in a given year under our equity incentive and stock purchase plans.

There were no share repurchases during the three months ended December 31, 2025. For additional information regarding our share repurchases, please refer to “Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 11. Stockholders’ Equity – Repurchase”.

Period

Total Number of Shares Purchased

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