What changed in this filing

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Item 9A. Controls and Procedures

2022-03-02 compared with 2021-03-09 · 32 added, 33 removed, 191 unchanged (25% of the section changed)

4 unchanged sentences

Changes in Internal Control Over Financial Reporting.

Beginning January 1, 2018, we implemented ASC 606, Revenue from Contracts with Customers .

Although the new revenue standard has had an immaterial impact on our ongoing revenue and net income, we implemented changes to our processes related to revenue recognition and the related control activities.

These included the development of new policies based on the five-step model provided in the new revenue standard, new training, ongoing contract review requirements, and gathering information provided for disclosures.

Beginning January 1, 2019, we implemented ASC 842, Leases .

We implemented changes to our processes related to contract evaluations, operating lease asset and liability recognition, and the related control activities.

These included the development of new policies, training, ongoing contract review requirements, and gathering information provided for disclosures.

There were no other changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the fourth quarter of 2020 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

Beginning in March 2020, in response to the COVID-19 pandemic, we implemented our business continuity plan and transitioned to a remote workforce at APEI and APUS and moved to a blended work model at HCN.

Although the impacts of the COVID-19 pandemic have not resulted in any changes in our internal control that have materially affected or are reasonably likely to materially affect our internal control over financial reporting, we are continually monitoring and assessing the COVID-19 pandemic and the impact it may have on our operations, including our internal control.

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the fourth quarter of 2021 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

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Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In accordance with guidance issued by the Securities and Exchange Commission, companies are permitted to exclude acquisitions from their final assessment of internal control over financial reporting for the first fiscal year in which the acquisition occurred.

Our management’s evaluation of internal control over financial reporting excluded the internal control activities of RU, which we acquired on September 1, 2021, as discussed in “Note 3.

Acquisition Activity”, included in the Consolidated Financial Statements in this Annual Report.

We have included the financial results of this acquisition in the consolidated financial statements from the date of acquisition.

RU’s assets excluded from this assessment was $429.3 million, representing 59.2% of the Company’s consolidated total assets as of December 31, 2021, and Rasmussen University’s total revenue of $89.5 million represented 21.4% of the Company’s consolidated revenue for the year ended December 31, 2021.

Under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021.

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We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2021, of the Company and our report dated March 2, 2022, expressed an unqualified opinion on those financial statements.

As described in management’s annual report on internal control over financial reporting, management excluded from its assessment the internal control over financial reporting at Rasmussen University, LLC, which was acquired on September 1, 2021, and whose financial statements constitute 59.2% of total assets and 21.4% of net revenue of the consolidated financial statement amount for the year ended December 31, 2021.

Accordingly, our audit did not include the internal control over financial reporting at Rasmussen University, LLC.

Basis for Opinion

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OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

2 unchanged sentences

Code of Ethics

As part of our system of corporate governance, our Board of Directors has adopted a Code of Business Conduct and Ethics that is applicable to all of our employees, officers and directors and also contains provisions only applicable to our principal executive officer and senior financial officers.

Our Code of Business Conduct and Ethics is available on the Governance page of our website at http://www.apei.com.

We intend to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the Code of Business Conduct and Ethics that applies to our principal executive officer or senior financial officers, by posting such information on our website at the address above.

The information on our website is expressly not incorporated by reference in this Annual Report on Form 10-K.

As part of our system of corporate governance, our Board of Directors has adopted a Code of Ethics for Principal Officers that is applicable to our principal executive officer and senior financial officers.

Our Code of Ethics for Principal Officers is available on the Governance page of our website at www.apei.com.

We intend to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the Code of Ethics for Principal Officers that applies to our principal executive officer or senior financial officers by posting such information on our website at the address above.

The information on or available through our website is expressly not incorporated by reference in this Annual Report on Form 10-K, and any reference to our website is intended to be an inactive textual reference only.

Additional Information

43 unchanged sentences

and Angela Selden (12)

10.11+ Amended and Restated Employment Agreement, dated August 21, 2019, by and among American Public University System, Inc., American Public Education, Inc.

and Wallace E.

10.12+ Amendment to Amended and Restated Employment Agreement dated June 30, 2020, by and among American Public University System, Inc., American Public Education, Inc., and Wallace E.

10.11+ Employment Agreement dated August 1, 2014, by and among American Public University System, Inc., American Public Education, Inc.

4 unchanged sentences

10.13+ Executive Employment Agreement, dated June 29, 2020 by and among American Public University System, Inc., American Public Education, Inc.

10.16 Commitment Letter, dated October 28, 2020, by and among American Public Education, Inc., Macquarie Capital (USA) Inc.

and Macquarie Capital Funding LLC.

10.14* D2L Master Terms and Conditions Agreement, dated as of October 31, 2019 by and between American Public University System, Inc.

and D2L Ltd (filed herewith)

and D2L Ltd (14)

10.15 Credit Agreement, dated September 1, 2021, by and among American Public Education, Inc., the Lenders and Issuing Banks from time to time party thereto, Macquarie Capital Funding LLC, Macquarie Capital (USA) Inc., and Truist Securities, Inc.

10.16 Collateral Agreement, dated September 1, 2021, by and among American Public Education, Inc., Macquarie Capital Funding LLC, as administrative agent and collateral agent and the Guarantors from time to time party thereto.

10.17* Third Amended and Restated Information Technology Services Agreement, dated October 1, 2016, by and between Rasmussen College Inc.

and Collegis LLC (16)

10.18* Statement of Work #4, dated March 15, 2019, by and between Collegis, LLC, and Rasmussen College, LLC, subject to the terms of the Third Amended and Restated Information Technology Services Agreement, dated October 1, 2016.

21.1 List of Subsidiaries (filed herewith)

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001-33810), filed with the Commission on August 10, 2020.

(15) Incorporated by reference to exhibit filed with the Registrant’s Annual Report on Form 10-K (File No.

001-33810) filed with the Commission on March 9, 2021.

(16) Incorporated by reference to exhibit filed with the registrant’s Current Report on Form 8-K (File No.

001-33810) filed with the Commission on October 29, 2020.

001-33810) filed with the Commission on September 2, 2021.

(17) Incorporated by reference to exhibit filed with the Registrant’s Quarterly Report on Form 10-Q (File No.

001-33810) filed with the Commission on November 8, 2021.

AMERICAN PUBLIC EDUCATION, INC.

4 unchanged sentences

Year ended December 31, 2021:

American Public Education Segment

American Public University System Segment $ 2,196 $ 1,693 $ ( 2,139 ) $ 1,750

Rasmussen University Segment 1

— 5,902 ( 2,458 ) 3,444

Hondros College of Nursing Segment 3,787 4,293 ( 1,878 ) 6,202

3,934 2,526 ( 2,673 ) 3,787

Allowance for receivables $ 5,983 $ 11,888 $ ( 6,475 ) $ 11,396

$ 6,174 $ 3,802 $ ( 3,993 ) $ 5,983

Year ended December 31, 2020:

American Public Education Segment

$ 2,669 $ 2,004 $ ( 2,433 ) $ 2,240

American Public University System Segment $ 2,240 $ 1,276 $ ( 1,320 ) $ 2,196

Hondros College of Nursing Segment 3,934 2,526 ( 2,673 ) 3,787

3,979 2,174 ( 2,219 ) 3,934

Allowance for receivables $ 6,174 $ 3,802 $ ( 3,993 ) $ 5,983

$ 6,648 $ 4,178 $ ( 4,652 ) $ 6,174

Year ended December 31, 2019:

American Public Education Segment

$ 3,253 $ 1,937 $ ( 2,521 ) $ 2,669

American Public University System Segment $ 2,669 $ 2,004 $ ( 2,433 ) $ 2,240

Hondros College of Nursing Segment 3,979 2,174 ( 2,219 ) 3,934

3,023 2,634 ( 1,678 ) 3,979

Allowance for receivables $ 6,648 $ 4,178 $ ( 4,652 ) $ 6,174

$ 6,276 $ 4,571 $ ( 4,199 ) $ 6,648

1 Rasmussen University Segment additions include $ 3.5 million beginning balance as of September 1, 2021.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

17 unchanged sentences

* March 2, 2022 Director

* March 9, 2021 Director

Barbara Kurshan

1 unchanged sentence

* March 2, 2022 Director

Daniel Pianko

* March 2, 2022 Director

Robinson, Jr.

* March 2, 2022 Director

Daniel Pianko

Sunderland, Jr., by signing his name hereto, does hereby sign this report on behalf of the directors of the Registrant above whose typed names asterisks appear, pursuant to powers of attorney duly executed by such directors and filed with the Securities and Exchange Commission.

4 unchanged sentences

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.

What changed 10-K

Item 9A. Controls and Procedures