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Item 9A. Controls and Procedures

2023-03-14 compared with 2022-03-02 · 39 added, 38 removed, 185 unchanged (29% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

We have carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Securities Exchange Act), as of December 31, 2021.

Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of that period, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting.

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.

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 2022 that have 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

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.

Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the Company;

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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, 2022.

2 unchanged sentences

Management reviewed the results of its assessment with the Audit Committee of our Board of Directors.

Our independent registered public accounting firm, Deloitte & Touche LLP, who audited and reported on the Consolidated Financial Statements of the Company included in this Annual Report, have also audited the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021, as stated in its report that appears below.

Our independent registered public accounting firm, Deloitte & Touche LLP, which audited and reported on our Consolidated Financial Statements included in this Annual Report, has also audited the effectiveness of our internal control over financial reporting as of December 31, 2022, as stated in its report that appears below.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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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, 2022, of the Company and our report dated March 14, 2023, 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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Additional Information

The additional information regarding directors, executive officers, and corporate governance required by this Item is hereby incorporated by reference from the information contained in our Proxy Statement, which will be filed with the SEC no later than 120 days following December 31, 2021 with respect to our 2022 Annual Meeting of Stockholders.

The additional information regarding directors, executive officers, and corporate governance required by this Item is hereby incorporated by reference from the information contained in our Proxy Statement with respect to our 2023 Annual Meeting of Stockholders, or our Proxy Statement, which will be filed with the Securities and Exchange Commission, or the SEC, no later than 120 days following December 31, 2022.

EXECUTIVE COMPENSATION

The information required by this Item is hereby incorporated by reference from the information contained in our Proxy Statement, which will be filed with the Securities and Exchange Commission no later than 120 days following December 31, 2021 with respect to our 2022 Annual Meeting of Stockholders.

The information required by this Item is hereby incorporated by reference from the information contained in our Proxy Statement, which will be filed with the SEC no later than 120 days following December 31, 2022.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE

PRINCIPAL ACCOUNTANT FEES AND SERVICES

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

12 unchanged sentences

3.1 Fifth Amended and Restated Certificate of Incorporation of the Company (1)

3.2 Fourth Amended and Restated Bylaws of the Company (6)

3.2 Fifth Amended and Restated Bylaws of the Company (15)

3.3 Certificate of Designation of Series A Senior Preferred Stock (16)

4.1 Form of certificate representing the Common Stock, $0.01 par value per share, of the Company (2)

4.2 Description of Securities (10)

4.2 Description of Securities (filed herewith)

10.1+ American Public Education, Inc.

2 unchanged sentences

2017 Omnibus Incentive Plan (9)

10.3+ Amendment Number Two to the American Public Education, Inc.

2017 Omnibus Incentive Plan (14)

10.4+ American Public Education, Inc.

17 unchanged sentences

and Patrik Dyberg (17)

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

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

5 unchanged sentences

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.

10.19* Series A Senior Preferred Stock Purchase Agreement, dated December 28, 2022, by and between American Public Education, Inc.

and Redwood Master Fund, Ltd., Redwood Drawdown Master Fund III, L.P., MSD SIF Holdings II, L.P.

and MSD Special Investments Fund II, L.P.

21.1 List of Subsidiaries (filed herewith)

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

001-33810), filed with the Commission on May 10, 2011.

(6) Incorporated by reference to exhibit filed with Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013 (File No.

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

(6) Incorporated by reference to exhibit filed with Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (File No.

001-33810), filed with the Commission on February 27, 2014.

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

001-33810), filed with the Commission on December 15, 2016.

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

001-33810), filed with the Commission on May 15, 2017.

(9) Incorporated by reference to exhibit filed with Registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018 (File No.

001-33810), filed with the Commission on August 8, 2018.

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

001-33810), filed with the Commission on August 22, 2019.

(11) Incorporated by reference to exhibit filed with Registrant’s Annual Report on Form 10-K/A for the year ended December 31, 2019 (File No.

001-33810), filed with the Commission on March 11, 2020.

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

2 unchanged sentences

001-33810), filed with the Commission on November 9, 2020.

(14) Incorporated by reference to exhibit filed with Registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020 (File No.

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.

(11) Incorporated by reference to exhibit filed with the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (File No.

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

1 unchanged sentence

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.

(13) Incorporated by reference to exhibit filed with the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 (File No.

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

(14) 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 May 24, 2022.

(15) 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 December 23, 2022.

(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 December 28, 2022.

(17) Incorporated by reference to exhibit filed with Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018 (File No.

001-33810), filed with the Commission on August 8, 2018.

AMERICAN PUBLIC EDUCATION, INC.

6 unchanged sentences

Rasmussen University Segment 3,444 8,657 ( 7,554 ) 4,547

— 5,902 ( 2,458 ) 3,444

Hondros College of Nursing Segment 6,202 4,706 ( 3,970 ) 6,938

Corporate and Other 2

Allowance for receivables $ 11,396 $ 15,153 $ ( 13,221 ) $ 13,328

1 unchanged sentence

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

5 unchanged sentences

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

2 Corporate and Other includes activity for GSUSA as of January 1, 2022.

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.

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* March 14, 2023 Director

Barbara Kurshan

* March 14, 2023 Director

James Kenigsberg

* March 14, 2023 Director

Daniel Pianko

Barbara Kurshan

* March 14, 2023 Director

Robinson, Jr.

* March 14, 2023 Director

Robinson, Jr.

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