Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
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 Exchange Act), as of December 31, 2024. 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 2024 that have materially affected or is reasonably likely to materially affect our internal control over financial reporting.
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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 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; and
• 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.
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, 2024. In making this assessment, our management used the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.
Based on its assessment, management concluded that, as of December 31, 2024, our internal control over financial reporting is effective based on those criteria. 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, 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, 2024, as stated in its report that appears below.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of American Public Education Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of American Public Education, Inc. and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
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, 2024, of the Company and our report dated March 6, 2025, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) 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; and (3) 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.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 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.
/s/ Deloitte & Touche LLP
McLean, Virginia
March 6, 2025
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ITEM 9B. OTHER INFORMATION
During the three months ended December 31, 2024, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
On March 4, 2025, the Board of Directors of the Company, or the Board, appointed Richard J. Statuto to serve as a director of the Company, effective as of immediately following the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, to hold office for a term expiring at the 2025 Annual Meeting of Stockholders, or the 2025 Annual Meeting, and until a successor is duly elected and qualified or until Mr. Statuto’s earlier death, resignation, or removal. Mr. Statuto has also been appointed as a member of the Audit Committee and Management Development and Compensation Committee of the Board.
Also, on March 6, 2025, Eric “Ric” C. Andersen and William G. Robinson, Jr. each informed the Company that they will not stand for re-election to the Board at the 2025 Annual Meeting. Mr. Andersen’s and Mr. Robinson’s terms will therefore expire at the conclusion of the 2025 Annual Meeting. The Board intends to reduce the size of the Board effective as of that time, rather than filling the resulting vacancies.
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ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Executive Officers
Pursuant to General Instruction G(3) of Form 10-K and the Instruction to Item 401 of Regulation S-K, information regarding our executive officers is set forth in Item 1 of Part I of this Annual Report under the caption “Information About our Executive Officers”.
Code of Ethics
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
The additional information required by this Item is hereby incorporated by reference from the information contained under the sections titled “Proposal No. 1 – Election of Directors”, “Delinquent Section 16(a) Reports”, “Composition and Meetings of the Board and its Committees – The Board of Directors and its Committees”, and “Corporate Governance – Corporate Governance Best Practices” in our Proxy Statement with respect to our 2025 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, 2024.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is hereby incorporated by reference from the information contained under the sections titled “Executive Compensation”, “Management Development & Compensation Committee Report”, and “Compensation Tables and Disclosures” in our Proxy Statement, which will be filed with the SEC no later than 120 days following December 31, 2024.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this Item is hereby incorporated by reference from the information contained under the sections titled “Compensation Tables and Disclosures – Equity Compensation Plan Information” and “Beneficial Ownership of Common Stock” in our Proxy Statement, which will be filed with the SEC no later than 120 days following December 31, 2024.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this Item is hereby incorporated by reference from the information contained under the section titled “Corporate Governance – Certain Relationships and Related Person Transactions” in our Proxy Statement, which will be filed with the SEC no later than 120 days following December 31, 2024.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this Item is hereby incorporated by reference from the information contained under the section titled, “Proposal No. 4 Ratification of Appointment of Independent Registered Public Accounting Firm” in our Proxy Statement, which will be filed with the SEC no later than 120 days following December 31, 2024.
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) List of documents filed as part of this Annual Report:
(i) The required financial statements are included in Item 8 of Part II of this Annual Report.
(ii) The required financial statement schedules are included in Item 8 of Part II of this Annual Report.
(iii) See the Index to Exhibits included in this Annual Report and incorporated herein by reference.
(b) See the Index to Exhibits included in this Annual Report and incorporated herein by reference.
(c) See Schedule II: Valuation and Qualifying Accounts included in this Annual Report and incorporated herein by reference.
Other schedules are omitted because they are not required.
ITEM 16. FORM 10-K SUMMARY
None.
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INDEX TO EXHIBITS
Exhibit No. Exhibit Description
3.1 Fifth Amended and Restated Certificate of Incorporation of the Company (1)
3.2 Fifth Amended and Restated Bylaws of the Company (13)
3.3 Certificate of Designation of Series A Senior Preferred Stock (14)
4.1 Form of certificate representing the Common Stock, $0.01 par value per share, of the Company (2)
4.2 Description of Securities (15)
10.1+ American Public Education, Inc. 2017 Omnibus Incentive Plan (6)
10.2+ Amendment Number One to the American Public Education, Inc. 2017 Omnibus Incentive Plan (8)
10.3+ Amendment Number Two to the American Public Education, Inc. 2017 Omnibus Incentive Plan (12)
10.4+ Amendment Number Three to the American Public Education, Inc. 2017 Omnibus Incentive Plan (16)
10.5+ American Public Education, Inc. Executive Severance Plan (6)
10.6+ American Public Education, Inc. Employee Stock Purchase Plan (2)
10.7+ Amendment to the American Public Education, Inc. Employee Stock Purchase Plan (4)
10.8+ Amendment Number Two to the American Public Education, Inc. Employee Stock Purchase Plan (8)
10.9+ Amendment Number Three to the American Public Education, Inc. Employee Stock Purchase Plan (17)
10.10+ APUS Non-Qualified Plan (5)
10.11+ Form of Indemnification Agreement with directors and executive officers (2)
10.12+ Executive Employment Agreement, dated August 21, 2019, by and between American Public Education, Inc. and Angela Selden (7)
10.13+ Amendment to Executive Employment Agreement, dated September 23, 2020, by and between American Public Education, Inc. and Angela Selden (9)
10.14+ Employment Agreement dated August 1, 2014, by and among American Public University System, Inc., American Public Education, Inc. and Richard W. Sunderland, Jr. (3)
10.15+ Transition and Release Agreement, dated June 13, 2024, by and among American Public Education, Inc., American Public University System, Inc. and Richard W. Sunderland, Jr. (20)
10.16* D2L Master Terms and Conditions Agreement, dated as of October 31, 2019 by and between American Public University System, Inc. and D2L Ltd (10)
10.17 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. (11)
10.18 Amendment No. 1 to Credit Agreement, dated June 12, 2023, by and among American Public Education, Inc., Macquarie Capital Funding LLC, as administrative agent for the Lenders (18)
10.19 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. (11)
10.20* 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. (14)
10.21* Cooperation Agreement, dated March 20, 2023, by and among 325 Capital LLC, 325 Capital Master Fund LP, 325 Capital GP LLC, Daniel M. Friedberg, Anil K. Shrivastava, and Michael D. Braner (19)
19.1 Amended and Restated Policy on Insider Trading (filed herewith)
21.1 List of Subsidiaries (filed herewith)
23.1 Consent of Deloitte & Touche LLP (filed herewith)
24 Power of Attorney (filed herewith)
31.1 Certification of Chief Executive officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
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31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
97 Incentive Compensation Recovery Policy (21)
EX-101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
EX-101.SCH Inline XBRL Taxonomy Extension Schema Document
EX-101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
EX-101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
EX-101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
EX-101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
148
+ Management contract or compensatory plan or arrangement.
* Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10).
(1) Incorporated by reference to exhibit filed with Registrant’s Current Report on Form 8-K (File No. 001-33810), filed with the SEC on November 14, 2007.
(2) Incorporated by reference to exhibit filed with Registrant’s Registration Statement on Form S-1 (File No. 333-145185).
(3) Incorporated by reference to exhibit filed with Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014 (File No. 001-33810), filed with the SEC on August 5, 2014.
(4) Incorporated by reference to exhibit filed with Registrant’s Current Report on Form 8-K (File No. 001-33810), filed with the SEC on June 17, 2014.
(5) 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 SEC on February 27, 2014.
(6) Incorporated by reference to exhibit filed with Registrant’s Current Report on Form 8-K (File No. 001-33810), filed with the SEC on May 15, 2017.
(7) Incorporated by reference to exhibit filed with Registrant’s Current Report on Form 8-K (File No. 001-33810), filed with the SEC on August 22, 2019.
(8) Incorporated by reference to exhibit filed with Registrant’s Current Report on Form 8-K (File No. 001-33810), filed with the SEC on May 18, 2020.
(9) Incorporated by reference to exhibit filed with Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 (File No. 001-33810), filed with the SEC on November 9, 2020.
(10) 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 SEC on March 9, 2021.
(11) Incorporated by reference to exhibit filed with the Registrant’s Current Report on Form 8-K (File No. 001-33810) filed with the SEC on September 2, 2021.
(12) Incorporated by reference to exhibit filed with the Registrant’s Current Report on Form 8-K (File No. 001-33810) filed with the SEC on May 24, 2022.
(13) Incorporated by reference to exhibit filed with the Registrant’s Current Report on Form 8-K (File No. 001-33810) filed with the SEC on December 23, 2022.
(14) Incorporated by reference to exhibit filed with the Registrant’s Current Report on Form 8-K (File No. 001-33810) filed with the SEC on December 28, 2022.
(15) Incorporated by reference to exhibit filed with the Registrant’s Annual Report on Form 10-K (File No. 001-33810) filed with the SEC on March 14, 2023.
(16) Incorporated by reference to exhibit filed with the Registrant’s Current Report on Form 8-K (File No. 001-33810) filed with the SEC on May 22, 2023.
(17) Incorporated by reference to exhibit filed with the Registrant’s Registration Statement on Form S-8 (File No. 001-33810) filed with the SEC on June 7, 2023.
(18) Incorporated by reference to exhibit filed with the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 (File No. 001-33810) filed with the SEC on August 8, 2023.
(19) Incorporated by reference to exhibit filed with the Registrant’s Current Report on Form 8-K (File No. 001-33810) filed with the SEC on March 20, 2023.
(20) Incorporated by reference to exhibit filed with the Registrant’s Current Report on Form 8-K (File No. 001-33810) filed with the SEC on June 17, 2024.
(21) Incorporated by reference to exhibit filed with the Registrant’s Annual Report on Form 10-K (File No. 001-33810) filed with the SEC on March 5, 2024.
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AMERICAN PUBLIC EDUCATION, INC.
Schedule II
Valuation and Qualifying Accounts
Balance at
Beginning of
Period Additions/ (Reductions) Write-Offs Balance at
End of Period
(in thousands)
Year ended December 31, 2024:
American Public University System Segment $ 2,770 $ 2,281 $ ( 2,058 ) $ 2,993
Rasmussen University Segment 3,922 8,348 ( 7,626 ) 4,644
Hondros College of Nursing Segment 8,130 7,211 ( 4,963 ) 10,378
Corporate and Other 537 728 — 1,265
Allowance for receivables $ 15,359 $ 18,568 $ ( 14,647 ) $ 19,280
Year ended December 31, 2023:
American Public University System Segment $ 1,711 $ 2,694 $ ( 1,635 ) $ 2,770
Rasmussen University Segment 4,547 8,694 ( 9,319 ) 3,922
Hondros College of Nursing Segment 6,938 5,691 ( 4,499 ) 8,130
Corporate and Other 132 405 — 537
Allowance for receivables $ 13,328 $ 17,484 $ ( 15,453 ) $ 15,359
Year ended December 31, 2022:
American Public University System Segment $ 1,750 $ 1,658 $ ( 1,697 ) $ 1,711
Rasmussen University Segment 3,444 8,657 ( 7,554 ) 4,547
Hondros College of Nursing Segment 6,202 4,706 ( 3,970 ) 6,938
Corporate and Other 1
— 132 — 132
Allowance for receivables $ 11,396 $ 15,153 $ ( 13,221 ) $ 13,328
1 Corporate and Other includes activity for GSUSA as of January 1, 2022.
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SIGNATURES
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.
AMERICAN PUBLIC EDUCATION, INC.
Date: March 6, 2025 By: /s/ Angela K. Selden
Name: Angela K. Selden
Title: President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
Name Date Title
/s/ Angela K. Selden March 6, 2025 President, Chief Executive Officer and Director
Angela K. Selden (Principal Executive Officer)
/s/ Richard W. Sunderland, Jr., CPA March 6, 2025 Executive Vice President and
Richard W. Sunderland, Jr., CPA Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
* March 6, 2025 Chairperson of the Board of Directors
Eric C. Andersen
* March 6, 2025 Director
Granetta B. Blevins
* March 6, 2025 Director
Michael D. Braner
* March 6, 2025 Director
Anna M. Fabrega
* March 6, 2025 Director
James Kenigsberg
* March 6, 2025 Director
Daniel S. Pianko
* March 6, 2025 Director
William G. Robinson, Jr.
* Richard W. 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.
151
By:
/s/ Richard W. Sunderland, Jr.
Richard W. Sunderland, Jr.
Attorney in Fact
152