3 unchanged sentences
With the exception of the following, there have been no material changes in the risk factors set forth in the Risk Factors section of our Annual Report.
−Removed: The Rasmussen Acquisition may not be completed on the anticipated timeline, or at all, and the failure to complete the Rasmussen Acquisition could adversely impact our business, results of operations, financial condition, and the market price of our common stock.
−Removed: The closing of the Rasmussen Acquisition is subject to a number of conditions as set forth in the Rasmussen Agreement that must be satisfied or waived, including among others, (i) regulatory review by the U.S.
−Removed: Department of Education, approval by the Higher Learning Commission, and approval of or notices to other regulatory and accrediting bodies, (ii) filings with and consents required to be made or obtained under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the expiration of any related waiting period, (iii) enrollment in Rasmussen’s nursing programs, in the term prior to closing, not having declined by more than five percent from enrollment as of the start of the same academic term in the prior academic year, and (iv) approval by the U.S.
−Removed: Department of Education of Rasmussen’s March 2019 change in ownership.
−Removed: There can be no assurance that all required approvals will be obtained or that all other closing conditions will otherwise be satisfied or waived, and, if all required approvals are obtained and all closing conditions are satisfied or waived, we can provide no assurance as to the terms, conditions and timing of such approvals or that the Rasmussen Acquisition will be completed in a timely manner or at all.
−Removed: Certain of the conditions to completion of the Rasmussen Acquisition are not within either our or Rasmussen’s control, and we cannot predict when or if these conditions will be satisfied or waived.
−Removed: Even if regulatory approval is obtained, it is possible conditions will be imposed that could result in a material delay in, or the abandonment of, the Rasmussen Acquisition or otherwise have an adverse effect on us.
−Removed: The Closing is also dependent on the accuracy of representations and warranties made by the parties to the Rasmussen Agreement (subject to customary materiality qualifiers and other customary exceptions) and the performance in all material respects by the parties of obligations imposed under the Rasmussen Agreement.
−Removed: If the Rasmussen Acquisition is not completed within the expected timeframe or at all, we may be subject to a number of material risks.
−Removed: The price of our common stock may decline to the extent that current market prices reflect a market assumption that the Rasmussen Acquisition will be completed.
−Removed: In addition, some costs related to the Rasmussen Acquisition must be paid whether or not the Rasmussen Acquisition is completed, and we have incurred, and will continue to incur, significant costs, expenses and fees for professional services and other transaction costs in connection with the proposed transaction, as well as the diversion of management and resources towards the Rasmussen Acquisition, for which we will have received little or no benefit if completion of the Rasmussen Acquisition does not occur.
−Removed: We may also experience negative reactions from our investors, students, and employees and faculty.
−Removed: We are relying on the availability of financing under a commitment letter for debt financing to fund a portion of the purchase price for the Rasmussen Acquisition.
−Removed: We plan to finance a portion of the aggregate purchase price for the Rasmussen Acquisition.
−Removed: In connection with the Rasmussen Acquisition, we entered into a commitment letter for (i) a senior secured term loan facility in the aggregate principal amount of $175 million, or the Term Facility, and (ii) a senior secured revolving loan facility in an aggregate commitment amount of $20 million, or together with the Term Facility, the Facilities, the terms of which are expected to be finalized on or prior to the Closing.
−Removed: The obligations of the lenders under the commitment letter are subject to conditions, which may not be met.
−Removed: We currently expect to pay up to $175 million of the cash consideration for the Rasmussen Acquisition with proceeds from the Facilities.
−Removed: There can be no guarantee that we will be able to close the Facilities or any alternative financing arrangements on commercially reasonable terms or at all.
−Removed: If the Facilities are not available, and alternative financing cannot be secured, we may not be able to pay the cash consideration for the Rasmussen Acquisition, in which case the Rasmussen Acquisition would not be completed.
−Removed: We have incurred, and will continue to incur, significant transaction costs and integration costs in connection with the Rasmussen Acquisition.
−Removed: We have incurred, and will continue to incur, significant costs, expenses and fees, including fees for professional services and other transaction costs, in connection with the Rasmussen Acquisition, including costs that we may not currently expect.
−Removed: We must pay many of these costs and expenses whether or not the transaction is completed.
−Removed: In addition, we expect to incur significant integration costs after the Closing.
−Removed: There are a number of factors beyond our control that could affect the total amount or the timing of these costs and expenses.
−Removed: Integrating our business with Rasmussen’s business may be more difficult, costly or time-consuming than expected, and we may not realize the expected benefits of the Rasmussen Acquisition, which may adversely affect our business results.
−Removed: If we experience greater than anticipated costs to integrate or are not able to successfully integrate Rasmussen into our existing operations, we may not be able to achieve the anticipated benefits of the Rasmussen Acquisition, including cost savings and other synergies and growth opportunities.
−Removed: Even if the integration of Rasmussen’s business is successful, we may not realize all of the anticipated benefits of the Rasmussen Acquisition during the anticipated time frame, or at all.
−Removed: For example, events outside our control, such as changes in regulation and laws, as well as economic trends, including as a result of the COVID-19 pandemic, could adversely affect our ability to realize the expected benefits from this acquisition.
−Removed: In addition, Rasmussen is a privately held company and has not been required to maintain an internal control infrastructure that would meet the standards of a public company, including the requirements of the Sarbanes-Oxley Act of 2002.
−Removed: The costs that we may incur to implement such controls and procedures may be substantial and we could encounter unexpected delays and challenges in this implementation.
−Removed: In addition, we may discover significant deficiencies or material weaknesses in the quality of Rasmussen’s financial and disclosure controls and procedures
−Removed: An inability to realize the full extent of the anticipated benefits of the Rasmussen Acquisition, as well as any delays encountered in the integration process, could have an adverse effect upon our revenues, level of expenses and operating results, which may adversely affect the value of our common stock after the completion of the Rasmussen Acquisition.
−Removed: In addition, it is possible that the integration process could result in the loss of key employees, errors or delays in the implementation of shared services, the disruption of our ongoing business or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with students, faculty and other employees or to achieve the anticipated benefits of the Rasmussen Acquisition.
−Removed: Integration efforts also may divert management attention and resources.
−Removed: Rasmussen may have liabilities that are not known to us.
−Removed: Rasmussen may have liabilities that we failed, or were unable, to discover in the course of performing our due diligence investigations.
−Removed: Following the completion of the Rasmussen Acquisition, we may learn additional information about Rasmussen that materially adversely affects us, such as unknown or contingent liabilities and liabilities related to compliance with applicable laws.
−Removed: Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations.
−Removed: We expect to incur substantial indebtedness under the Facilities, 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.
−Removed: Our ability to make scheduled payments on or to refinance our obligations under the Facilities or any alternative debt financing arrangements will depend on our financial and operating performance, which will be affected by economic, financial,
−Removed: competitive, business, and other factors, some of which are beyond our control.
−Removed: The indebtedness we expect to incur in connection with the Rasmussen Acquisition will require us to dedicate a substantial portion of our cash flow to servicing this debt, thereby reducing the availability of cash to fund other business initiatives.
−Removed: There can be no assurance that our business will generate sufficient cash flow from operations to service our indebtedness or to fund our other liquidity needs.
−Removed: 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.
−Removed: There can be no assurance that we will be able to restructure or refinance any of our indebtedness on commercially reasonable terms, if at all, which could cause us to default on our debt obligations and impair our liquidity.
−Removed: In addition, upon the occurrence of certain events, such as a change of control, we could be required to repay or refinance our indebtedness.
−Removed: 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.
−Removed: There can be no assurance that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all.
−Removed: 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.
−Removed: The COVID-19 pandemic has caused us to have to adjust our operations, which could adversely affect the student experience, particularly at HCN, and could have additional adverse effects on our business, financial condition, or results of operations.
−Removed: The ongoing COVID-19 pandemic required us to shift from campus-based to a blended model at HCN with online delivery of its courses and limited in person interactions, have nearly all of our employees work remotely, and implement business continuity processes.
−Removed: Ongoing impacts could also cause a disruption of educational services provided to students and increase costs for HCN to continue to deliver courses in person and online.
−Removed: HCN has fully reopened its campuses, using smaller in person classes with screening, social distancing and masking requirements while continuing to offer courses in a virtual setting for those that prefer remote course learning.
−Removed: There can be no assurance that these and other protective measures we have implemented or may put in place will be successful in preventing cases of COVID-19 among our employees and students, or that HCN will not need to again further limit campus interactions or close its campuses.
−Removed: Furthermore, we have limited experience delivering HCN’s curriculum online, and to the extent HCN utilizes online learning, HCN’s students may not experience the same level of success in coursework or with NCLEX scores as they would in a traditional campus environment.
−Removed: If HCN is unable to continue to deliver instruction on campus or to effectively create and manage online or blended versions, or otherwise arrange for delivery of all of the required elements of HCN’s academic programs, HCN’s students may not be able to complete their studies with HCN, impacting their ability to graduate and obtain licensure, employment or their other desired outcomes.
−Removed: This would likely have a material adverse effect on our business, financial condition or results of operations.
−Removed: Furthermore, the need to practice social distancing increases the need for space in HCN’s facilities and therefore HCN has temporarily obtained and may need to obtain further additional facilities.
−Removed: For example, in October 2020, HCN began temporarily expanding certain campuses through short-term leases of additional space to be used as lab space in order to accommodate student demand in compliance with COVID-related public health measures that effectively limit the number of students in each lab class.
−Removed: HCN may also need to place restrictions on program size, which may adversely impact our results of operations.
−Removed: While we have not experienced significant changes in interactions with students other than by temporarily shifting to online and then blended in person and online learning at HCN, we may experience such impacts in the future if the COVID-19 pandemic and its effects are prolonged or increase in scope.
−Removed: For example, APUS faculty, substantially all of whom work remotely in ordinary circumstances, and our student support services teams, many of whom routinely work in our offices, may experience increasing difficulty in continuing to provide quality instruction and support to our students if current social distancing and future “stay-at-home” orders impact the communities in which they live, causing disruption in their lives that could impact their ability to provide a quality product, lead to increase absenteeism, or impact their ability to continue working.
−Removed: Almost all of the remainder of our workforce is working remotely, and we have implemented business continuity processes, which may lead to decreased operational efficiency and other challenges inherent in doing things in a manner different than our ordinary course operations.
−Removed: If faculty, student support services staff, administrators, or other skilled personnel cease working or are unable to work as efficiently or effectively due to the effects of the COVID-19 pandemic, we could lose capacity and expertise critical to our operations and the delivery of instruction and services to students.
−Removed: Over time, any reduction in operating efficiencies or other business challenges could compound or worsen, adversely impacting our operations and our ability to provide services to our students.
−Removed: For example, the economic downturn, restrictions on business activities, and other effects of the COVID-19 pandemic could result in the inability of our third-party vendors to serve us, which could disrupt integral business processes.
−Removed: Remote working and the implementation of business continuity processes also generally create operational challenges around information technology matters, including, for example, an enhanced risk of cyber events and more difficulty in responding to them.
−Removed: It is not practical to estimate or identify all potential risks that could arise from having substantially all of our workforce working remotely or other impacts of the COVID-19 pandemic and there may be risks that are not reasonably
−Removed: There could be significant adverse effects on our business, financial condition, and results of operations that we have not identified or that we do not currently expect will be material.
−Removed: The ongoing COVID-19 pandemic and resulting changes to our teaching methodology at HCN could have an adverse impact on the ability of HCN’s graduates to obtain professional licensure, employment, or other outcomes, which could reduce our enrollments and revenue, limit our ability to offer educational programs, and potentially lead to litigation that could be costly to us.
−Removed: To apply for licensure to practice nursing in Ohio, an applicant must have successfully completed a nursing education program that is approved by the OBN.
−Removed: The OBN requires that nursing education programs such as HCN’s PN and ADN Programs have a pass rate on the relevant NCLEX that is at least 95% of the national average for first-time candidates in a calendar year.
−Removed: As discussed more fully in “Regulatory Environment - State Authorization/Licensure of Our Institutions” in Part I, Item 1 of our Annual Report, failure to satisfy that requirement can result in the OBN taking certain adverse actions, including placement of a program on provisional status or withdrawal of approval pursuant to an adjudication proceeding.
−Removed: In March 2017, the OBN placed HCN’s ADN Program on provisional approval because the ADN Program has not met the OBN pass rate standard for four consecutive years.
−Removed: In March 2020, the OBN found that HCN’s ADN Program did not meet the OBN pass rate standard in 2019 for a seventh consecutive year.
−Removed: HCN has been implementing changes, including curriculum, admissions, and academic achievement and course retake policy changes that are designed to improve NCLEX scores over time, but there is no assurance that these changes will be successful or will not have negative effects on HCN’s enrollment.
−Removed: In addition, we cannot be certain that factors beyond our control, such as the ongoing COVID-19 pandemic, which previously led to the temporary shifting of HCN’s courses to online delivery and then to a blended model of in person and online, will not have a negative impact on the student experience, student outcomes and NCLEX scores.
−Removed: If HCN is unable to improve NCLEX scores over time, this situation could have an adverse impact on our ability to enroll students and eventually our ability to continue HCN’s ADN Program, any of which would have an adverse effect on our results of operations, cash flows, and financial condition.
−Removed: On March 27, 2020, Ohio enacted a COVID-19 emergency relief law that allows individuals who have successfully completed a nursing education program approved by OBN to receive a temporary license to practice as an RN or LPN before taking the NCLEX.
−Removed: Graduates of OBN-approved nursing education programs, such as HCN’s programs, may apply for a temporary license that would be valid until of the earlier of March 1, 2021 and 90 days after the period of emergency ends.
−Removed: However, the length of the emergency period remains unclear, and we cannot predict the effect Ohio’s emergency relief law will have on our NCLEX scores, if any.
−Removed: If HCN’s graduates fail to obtain professional licensure or employment or experience other negative outcomes in their chosen fields of study, including as a result of the COVID-19 pandemic and the resulting changes to our academic program, 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.
−Removed: Adverse impacts on HCN resulting from the COVID-19 pandemic could also lead to an impairment of goodwill.
−Removed: Our success and financial performance depend on the effectiveness of our ability to attract students who persist in our institutions’ programs.
−Removed: A variety of factors impact our ability to attract new, qualified students in a cost-effective manner, and these students must remain active in our institutions’ programs.
−Removed: In 2020, we launched a new marketing campaign focusing on affordability and return on investment for learners.
−Removed: Our marketing efforts, including our new campaign, may be less successful than we anticipate in attracting qualified students.
−Removed: It may also be difficult to assess the value of our efforts if we are unable to ascertain whether and to what extent these efforts are impacted by extrinsic events, including the ongoing COVID-19 pandemic and the related economic downturn.
−Removed: More generally, we are unable to estimate the level of disruption that the ongoing COVID-19 pandemic and the related economic downturn will have on our business, including our ability to attract new, qualified students and the ability of our existing students to continue to persist in our programs.
−Removed: For example, the pandemic could have an adverse effect on student enrollment if current or prospective students are unable to pay for tuition or related costs of postsecondary education, or otherwise decide not to pursue postsecondary education in light of the COVID-19 pandemic and related economic, health, family, or other hardships they are facing.
−Removed: If we are unable to successfully pursue HCN’s program initiatives and expansions, including opening new HCN campuses, our future growth may be impaired.
−Removed: We experienced decreases in enrollment at HCN in 2019, which resulted in a significant decline in revenue in our HCN Segment.
−Removed: The success of HCN will depend on our ability to maintain and increase student enrollments in HCN’s programs and grow HCN’s on-campus offerings.
−Removed: As part of our strategy, we intend to open new campuses for HCN, such as the new campus in suburban Toledo, Ohio that began operations in early 2017, our new campus in Indianapolis, Indiana that began courses in April 2020, and our planned additional campus in Akron, Ohio.
−Removed: Such actions require us to obtain appropriate federal, state, and accrediting agency approvals and to comply with any requirements from those agencies related to a new location.
−Removed: Adding new locations may also require significant financial investments, human resource capabilities, and new clinical placement relationships.
−Removed: In addition, regulatory authorities may place limitations or restrictions on new programs or campuses, including by only provisionally accrediting programs or limiting the number of initial enrollees.
−Removed: For example, in November 2019, the Indiana State Board of Nursing voted to grant initial accreditation for a PN Program at HCN’s Indianapolis campus, but growth beyond an initial cohort of up to 30 students for the first year is subject to HCN’s ability to petition to increase the number of admissions after a site visit that will occur upon graduation of the first cohort.
−Removed: The Indiana State Board of Nursing will not grant the Indianapolis campus full accreditation status until the first cohort graduates, and may not grant full accreditation at that time if the program has a pass rate lower than one standard deviation below the average national pass rate.
−Removed: The increase of student enrollments and growth of HCN’s on-campus offerings, including through opening of new campuses and full accreditation of those campuses, may be adversely affected by events beyond our control.
−Removed: If we are unable to, or suffer any delay in our ability to, obtain appropriate approvals, open, accredit and attract additional students to new campus locations, offer programs at new campuses in a cost-effective manner, identify appropriate clinical placements, or otherwise manage effectively the operations of newly established campuses, our results of operations and financial condition could be adversely affected.
−Removed: In addition, the inability to expand existing programs efficiently, or successfully, including as a result of constraints on our operations due to COVID-19, pursue new program initiatives, and add new campuses would harm our ability to grow our business and could have an adverse impact on our financial condition.
−Removed: Economic and market conditions in the U.S.
−Removed: or abroad could affect our enrollments, success with placement and persistence and cohort default rates.
−Removed: Our business has been in the past and may in the future be adversely affected by a general economic slowdown or recession in the U.S.
−Removed: or abroad, such as the economic downturn associated with the COVID-19 pandemic.
−Removed: Adverse economic developments could 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.
−Removed: 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, require increased time, attention, and resources to manage these defaults, adversely affect the recoverability of receivables, and increase our bad debt expense, among other impacts.
−Removed: Higher default rates may also adversely impact our eligibility to participate in some Title IV programs, which could adversely impact our operations and financial condition.
−Removed: The CARES Act provided temporary relief for federal student loan borrowers by suspending payments on federal student loans until September 30, 2020, and an executive order extended this relief until December 31, 2020 .
−Removed: During this period, interest will not accrue and involuntary collection procedures will be suspended.
−Removed: However, this relief is not permanent and we cannot predict whether additional relief will be granted or what the impact of the end of this temporary relief will be.
−Removed: Our institutions’ students are able to borrow Title IV loans in excess of their tuition and fees.
−Removed: The excess is received by such students as a credit balance payment.
−Removed: Normally, if a student withdraws, our institutions must return any unearned Title IV funds, which may include a portion of the credit balance payment, and must seek to collect from the student any resulting amounts owed to the institution.
−Removed: The CARES Act provides that institutions are not required to return Title IV funds to ED in connection with a student who withdraws from the institution during the payment period or period of enrollment as a result of a government-declared COVID-19-related emergency.
−Removed: However, a protracted economic slowdown could negatively impact such students’ ability to satisfy debts to the institution, including debts that result from returns of unearned Title IV amounts.
−Removed: 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.
−Removed: The CARES Act and COVID-19-related regulatory guidance may contain provisions that could benefit some institutions more than others, their provisions may be ambiguous or subject to change, we may have difficulty adjusting our systems to comply, and failure to comply could subject us to penalties.
−Removed: As more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview - Regulatory and Legislative Activity,” in March 2020, Congress passed the CARES Act in response to COVID-19 and its related effects.
−Removed: Wholly online institutions are effectively ineligible for any of the $12.6 billion in funding from ED
−Removed: available to higher education institutions under the Higher Education Emergency Relief Fund, or HEERF, established by the CARES Act.
−Removed: ED allocated $3.1 million for HCN and in May 2020, HCN received its HEERF allocation.
−Removed: No allocation of HEERF funds was made to APUS by ED.
−Removed: As part of the process to receive its allocation, HCN signed a funding certification and agreement setting forth terms and conditions, including compliance with relevant CARES Act provisions and applicable law.
−Removed: The CARES Act requires recipient institutions to use at least 50% of their HEERF funds to provide emergency grants to students for expenses related to the disruption of campus operations due to COVID-19.
−Removed: The CARES Act also permits institutions to use up to 50% of their HEERF funds to cover any costs associated with significant changes to the delivery of instruction due to COVID-19, so long as such costs do not include payment to contractors for the provision of pre-enrollment recruitment activities, endowments, or capital outlays associated with facilities related to athletics, sectarian instruction, or religious worship.
−Removed: Although HCN incurred costs to shift its delivery of instructions and operations due to COVID-19, it chose to distribute its entire HEERF allocation directly to eligible students.
−Removed: Our institutions’ failure to comply with applicable CARES Act provisions, including provisions related to funding and waivers of Title IV requirements, or with ED guidance related to the COVID-19 pandemic, both of which contain ambiguities, could result in administrative sanctions including fines, restrictions on our ability to participate in Title IV programs, debarment and suspension, and liabilities under applicable law, such as the False Claims Act.
−Removed: The CARES Act and related ED guidance waive certain federal student financial aid requirements in connection with COVID-19 developments and, to the extent such waivers apply to our institutions, we may have difficulty adjusting our systems to comply with those waivers and our institutions’ failure to comply with those waivers.
−Removed: In addition, ED guidance related to the COVID-19 pandemic may change as the pandemic continues.
−Removed: We cannot predict what additional regulatory actions may be taken or legislation put in place in connection with the COVID-19 pandemic or what impact such regulations or legislation may have on us or our institutions, if any.
−Removed: Our institutions’ failure to comply with ED’s regulations related to distance education could result in actions that would have a material adverse effect on our enrollments, revenue, and results of operations.
−Removed: In October 2018, ED announced the Accreditation and Innovation Committee would prepare proposed regulations related to, among other things, courses offered through distance education.
−Removed: ED published a notice of proposed rulemaking in April 2020 based on consensus language agreed to by the Accreditation and Innovation Committee.
−Removed: On August 24, 2020, ED released the final rule, which goes into effect on July 1, 2021.
−Removed: The rulemaking on distance education provides institutions additional flexibility in offering distance education and competency-based education programs.
−Removed: New definitions related to “academic engagement,” “distance education,” and “regular and substantive interaction” provide further clarity regarding the instructional requirements that distance education programs must abide by in order to remain eligible for Title IV disbursements.
−Removed: Failure to comply with these standards could lead to adverse actions by ED.
−Removed: The postsecondary education regulatory environment may change in the future as a result of the U.S.
−Removed: federal election in November 2020 and any related run-off elections.
−Removed: A change in the Presidential Administration or Congress may result in changes to, or elimination of, currently effective ED regulations, or the implementation of new ED regulations.
−Removed: For example, a new Congress could seek to act under the Congressional Review Act, which establishes legislative procedures through which Congress may adopt a joint resolution of disapproval to nullify certain agency final regulations within a certain time period after the regulations are finalized by the agency.
−Removed: ED, under new leadership, could also initiate new rulemaking processes to alter existing regulations and could act to change existing ED policies and practices with respect to matters related to postsecondary education institutions.
−Removed: We cannot predict the extent to which a new Presidential Administration or Congress will act to change or elimina te or to implement new ED regulations, policies, and practices, nor can we predict the form that new regulations, policies, or practices may take.
−Removed: We also cannot predict the extent any other potential regulatory or legislative activity as a result of the U.S.
−Removed: federal elections may impact us or our institutions, nor can we predict the possible associated burdens and costs.
+Added: Our student registrations and revenue have been adversely impacted and we could continue to experience adverse impacts as a result of the Army’s transition from GoArmyEd to ArmyIgnitED.
+Added: Army service members participating in TA programs constituted approximately 22.9% of APUS’s adjusted net course registrations for 2020.
+Added: APUS relies on the ability of the Army, and the other branches 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 programs.
+Added: For example, the Army previously announced that it would transition from its legacy system, GoArmyEd, to a new system, ArmyIgnitED, that soldiers could use to apply for TA.
+Added: As described more fully in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview,” this transition has been beset by delays and resulted in temporary suspension and disruption of the Army’s TA programs, including the issuance and subsequent rescission of guidance that courses beginning on or after April 23, 2021 would not be eligible for retroactive TA.
+Added: While soldiers can continue to directly register for courses with the expectation that they can retroactively apply for TA, on May 2, 2021, the Army announced that in order to test functionality, ArmyIgnitED would undergo a limited user test for certain units and bases for a two-week period ending on May 19, 2021.
+Added: However, there is no assurance when the new portal will be fully operational, or that if operational it will work correctly or efficiently or will not have other impacts on soldiers’ ability to participate in the TA programs or receive funds under those programs.
+Added: While the transition did not adversely affect revenue for the quarter ended March 31, 2021, Army enrollments at APUS subsequent to March 31, 2021 have been adversely impacted by this transition.
+Added: We expect the continued disruption to Army TA and resulting decreases in Army registrations to have an adverse impact on revenue for the quarter ending June 30, 2021, which could worsen if the Army again announces that soldiers will not be able to retroactively seek TA.
+Added: The inability of soldiers to participate in TA 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, particularly because soldiers make up the largest group of TA participants at APUS.
+Added: In addition, for the period beginning March 8, 2021, soldiers that registered for courses other than through the two-week limited user test of ArmyIgnitED ending on May 19, 2021 will have to retroactively apply for TA.
+Added: As a result, it is possible that we could incur bad debt expenses if soldiers who expect to receive TA do not receive it and do not otherwise pay the tuition for their courses.
+Added: The disruption to the Army’s systems has also adversely impacted APUS’s ability to invoice the Army for Army registrations and may impact future accounts receivable balances and cash flow from operations.
+Added: Moderating or decreased demand for online education or nursing education as a result of the abatement of the COVID-19 pandemic could adversely affect our business, financial condition, and results of operations.
+Added: In 2020, we experienced an increase in net course registrations at APUS and an increase in student enrollment at HCN.
+Added: We believe the increase in net course registrations at APUS may have in part been due to the impact of the COVID-19 pandemic, and that the increase in new student enrollment at HCN was due in part to an increase in demand for nursing education and a change in the competitive environment due to COVID-19.
+Added: There is no assurance that the increases will be sustained, and as the pandemic abates, we believe demand for our online education programs will moderate and could decrease, and the demand for our nursing education programs could also moderate or decrease.
+Added: Congressional and administrative examination of for-profit institutions has resulted in and could result in further legislative and regulatory changes that may materially and adversely affect our business.
+Added: ARPA modifies the 90/10 Rule to require that a for-profit institution derive not less than 10 percent of its revenue from sources other than “federal education assistance funds”.
+Added: Prior to going into effect, the provisions of ARPA related to the 90/10 Rule are required to go through a negotiated rulemaking process.
+Added: An ED final rule to implement the ARPA provision is not expected to go into effect until July 1, 2023 at the earliest, and we cannot predict to what extent ARPA and the final rule will affect us and our institutions.
+Added: ARPA does not define “federal education assistance funds”.
+Added: However, we expect such definition to be developed as part of the required negotiated rulemaking and anticipate that ED would seek to include TA and VA education benefits in the scope of the definition.
+Added: If the rulemaking process results in TA and VA being included in the “90%” side of the ratio, our institutions’ 90/10 Rule percentage will increase.
+Added: This change, and any resulting actions we take to adjust the operations of our institutions to comply with the rule, could have a material adverse impact on the financial condition and operations of our institutions.
+Added: We also cannot predict the likelihood that Congress or the President will continue to modify the 90/10 Rule with respect to relevant sources of funds or other aspects of the calculation.
+Added: 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%.
+Added: Such proposals, or other similar legislation, should they become law, could have a material adverse impact on the operations of our institutions.
+Added: To the extent that any additional laws or regulations, including regulations under ARPA, are adopted that limit or condition the participation of for-profit schools or distance education programs in TA or in Title IV programs, or that limit or condition the amount of TA 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.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.