What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-12 compared with 2025-03-06 · 258 added, 354 removed, 917 unchanged (40% of the section changed)

39 unchanged sentences

The Company annually assesses goodwill and indefinite-lived intangible assets, or more frequently if events and circumstances indicate that the estimated fair value may no longer exceed its carrying value.

Such factors considered in the Company’s

assessment include, but are not limited to, enrollment trends, financial performance, macroeconomic conditions, regulatory environment, as well as industry and market considerations.

When a quantitative impairment test is performed, if the fair value of the reporting unit or indefinite-lived intangible assets is less than its carrying amount, an impairment loss is recorded for the excess of the carrying value over the fair value.

Such factors considered in the Company’s assessment include, but are not limited to, enrollment trends, financial performance, macroeconomic conditions, regulatory environment, as well as industry and market considerations.

When a quantitative impairment test is performed, if the fair value

of the reporting unit or indefinite-lived intangible assets is less than its carrying amount, an impairment loss is recorded for the excess of the carrying value over the fair value.

During the fourth quarter of 2025, the Company completed their annual assessment of goodwill and indefinite-lived intangibles for the RU reporting unit.

4 unchanged sentences

Our audit procedures related to the revenue projections, EBITDA margin, discount rate and royalty rate included the following, among others:

• We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the RU reporting unit, such as controls related to management’s forecasts of future revenues, EBITDA margin, the selection of the discount rate and selection of the royalty rate.

• We tested the effectiveness of controls over management’s goodwill and indefinite-live intangible assets impairment evaluation, including those over the determination of the fair value of the RU reporting unit, such as controls related to management’s forecasts of future revenues, EBITDA margin, the selection of the discount rate and selection of the royalty rate.

• We evaluated the reasonableness of management’s revenue and EBITDA margin forecasts by comparing management’s forecasts to:

46 unchanged sentences

authorized shares – 10,000,000 ;

Series A Senior Preferred Stock, 400 shares issued or outstanding in 2023 and 2024, respectively.

($ 138,132 and $ 117,439 liquidation preference per share, $ 55,253 and $ 46,976 in aggregate, for 2023 and 2024, respectively) (Note 13)

39,691 39,691

Series A Senior Preferred Stock, 400 shares issued or outstanding in 2024, respectively.

($ 117,439 liquidation preference per share, $ 46,976 in aggregate, for 2024, respectively) (Note 12)

Common Stock, $ .01 par value;

3 unchanged sentences

Additional paid-in capital 305,823 311,119

Accumulated other comprehensive income 1,644 ( 7 )

Accumulated other comprehensive loss ( 7 ) ( 18 )

Accumulated deficit ( 41,805 ) ( 16,500 )

14 unchanged sentences

Impairment of goodwill and intangible assets 64,000 — —

Loss on sale of subsidiary (Note 2) — — 3,877

Loss on assets held for sale (Note 5) 2,425 1,618 1,527

3 unchanged sentences

(Loss) income from operations before interest and income taxes ( 48,306 ) 33,066 47,935

Gain on acquisition (Note 3) 3,828 — —

Interest expense, net ( 4,459 ) ( 2,127 ) ( 4,230 )

4 unchanged sentences

Preferred stock dividends 6,008 6,056 2,751

Loss on redemption of preferred stock — — 3,501

Net (loss) income available to common stockholders $ ( 53,294 ) $ 10,057 $ 25,305

12 unchanged sentences

Other comprehensive (loss) income, net of tax:

Unrealized gain on hedging derivatives 4,429 924 839

Unrealized gain (loss) on hedging derivatives 924 839 ( 24 )

Tax effect ( 227 ) ( 207 ) 8

Unrealized gain on hedging derivatives, net of taxes 3,335 697 632

Reclassifications of gains to net income ( 453 ) ( 2,857 ) ( 3,031 )

Unrealized gain (loss) on hedging derivatives, net of taxes 697 632 ( 16 )

Reclassifications of (gains) loss to net income ( 2,857 ) ( 3,031 ) 7

Tax effect 702 748 ( 2 )

Reclassifications of gains to net income, net of taxes ( 341 ) ( 2,155 ) ( 2,283 )

Total other comprehensive income (loss) $ 2,994 $ ( 1,458 ) $ ( 1,651 )

Reclassifications of (gains) loss to net income, net of taxes ( 2,155 ) ( 2,283 ) 5

Total other comprehensive loss $ ( 1,458 ) $ ( 1,651 ) $ ( 11 )

Comprehensive (loss) income $ ( 48,744 ) $ 14,462 $ 31,546

8 unchanged sentences

400 $ 39,691 18,892,791 $ 189 $ 292,854 $ 3,102 $ 13,891 $ 349,727

Issuance of preferred stock in private offering 400 39,691 — — — — — 39,691

Preferred Stock Dividends — — — — — — ( 6,008 ) ( 6,008 )

2 unchanged sentences

Stock-based compensation — — — — 7,740 — — 7,740

Other comprehensive income — — — — — 2,994 — 2,994

Net income — — — — — — ( 114,993 ) ( 114,993 )

Repurchased and retired shares of common stock — — ( 1,515,766 ) ( 15 ) — — ( 9,693 ) ( 9,708 )

Other comprehensive loss — — — — — ( 1,458 ) — ( 1,458 )

Net loss — — — — — — ( 47,286 ) ( 47,286 )

Balance as of December 31, 2023

1 unchanged sentence

Preferred Stock Dividends — — — — — — ( 6,056 ) ( 6,056 )

Exercise of stock options — — 5,796 — 67 — — 67

Issuance of common stock under employee benefit plans — — 475,740 4 ( 4 ) — — —

3 unchanged sentences

Other comprehensive loss — — — ( 1,651 ) — ( 1,651 )

Net loss — — — — — — ( 47,286 ) ( 47,286 )

Net income — — — — — — 16,113 16,113

Balance as of December 31, 2024

1 unchanged sentence

Preferred Stock Dividends — — — — — — ( 2,751 ) ( 2,751 )

Redemption of preferred stock ( 400 ) ( 39,691 ) — — — — — ( 39,691 )

Loss on redemption of preferred stock — — — — — — ( 3,501 ) ( 3,501 )

Exercise of stock options — — 68,813 — 1,210 — — 1,210

2 unchanged sentences

Stock-based compensation — — — — 8,352 — — 8,352

Repurchased and retired shares of common stock — — ( 251,146 ) ( 2 ) — — ( 2,766 ) ( 2,768 )

Other comprehensive loss — — — ( 11 ) — ( 11 )

9 unchanged sentences

Net (loss) income $ ( 47,286 ) $ 16,113 $ 31,557

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization 27,816 19,303 16,148

5 unchanged sentences

Loss on disposal of long-lived assets 554 383 444

Gain on acquisition ( 3,828 ) — —

Loss on sale of subsidiary — — 2,550

Impairment of goodwill and intangible assets 64,000 — —

11 unchanged sentences

Investing activities

Cash paid for acquisition, net of cash acquired 1,951 — —

Cash outlay from sale of subsidiary — — ( 2,294 )

Capital expenditures ( 13,895 ) ( 21,082 ) ( 15,864 )

Proceeds from the sale of real property 123 — 22,959

Net cash used in investing activities ( 13,673 ) ( 13,772 ) ( 21,082 )

Net cash (used in) provided by investing activities ( 13,772 ) ( 21,082 ) 4,801

Financing activities

2 unchanged sentences

Cash received from exercise of stock options — 67 1,210

Cash received from issuance of preferred stock 39,691 — —

Cash paid for redemption of preferred stock — — ( 43,192 )

Cash paid for principal on borrowings and finance leases ( 114 ) ( 2,964 ) ( 213 )

Net cash used in financing activities ( 16,858 ) ( 13,191 ) ( 49,208 )

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 20,169 ) 14,884 14,599

Net increase in cash, cash equivalents, and restricted cash 14,884 14,599 17,558

Cash, cash equivalents, and restricted cash at beginning of period 129,458 144,342 158,941

6 unchanged sentences

Nature of the Business

American Public Education, Inc., or APEI, which together with its subsidiaries is referred to as the “Company,” is a provider of online and campus-based postsecondary education and career learning to students through the following subsidiary institutions:

American Public Education, Inc., or APEI, which together with its subsidiaries is referred to as the “Company,” is a provider of online and campus-based postsecondary education to students through the following subsidiary institutions:

• American Public University System, Inc., or APUS, provides online postsecondary education directed primarily at the needs of the military, veterans, extended military families, and other public service and service-minded communities, through American Military University, or AMU, and American Public University, or APU.

APUS is institutionally accredited by the Higher Learning Commission, or HLC.

• Rasmussen College, LLC, which is referred to herein as Rasmussen University, or RU, a nursing- and health sciences-focused institution, provides postsecondary education to students at 20 campuses in six states and online.

RU is institutionally accredited by HLC.

2 unchanged sentences

• American Public Training LLC, which is referred to herein as Graduate School USA, or GSUSA, provides career learning and leadership training in-person and online to the federal workforce.

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

The Company’s subsidiary institutions are licensed or otherwise authorized by state authorities to offer education programs to the extent the institutions believe such licenses or authorizations are required, and APUS, RU, and HCN are certified by the United States Department of Education, or ED, to participate in student financial aid programs authorized under Title IV of the Higher Education Act of 1965, as amended, or Title IV programs.

The Company’s operations are organized into the following three reportable segments:

On July 25, 2025, or the GSUSA Sale Date, APEI completed the sale of its membership interest in GSUSA;

therefore, the Consolidated Balance Sheet as of December 31, 2025, no longer includes the accounts of GSUSA.

The accompanying Consolidated Financial Statements include the operations of GSUSA through the GSUSA Sale Date in Corporate and Other.

Please refer to “Note 2.

Significant Accounting Policies” for more information on APEI’s sale of its membership interest in GSUSA.

Department of Education, or ED, to participate in student financial aid programs authorized under Title IV of the Higher Education Act of 1965, as amended, or Title IV programs.

The Company’s operations for the periods covered by this Annual Report are organized into the following three reportable segments:

• American Public University System Segment, or APUS Segment.

5 unchanged sentences

Adjustments to reconcile segment results to the Consolidated Financial Statements are included in Corporate and Other.

These adjustments include unallocated corporate activity and eliminations, and the operational activities of GSUSA.

GSUSA operates as a stand-alone subsidiary of APEI but does not meet the quantitative thresholds to qualify as a reportable segment, and does not have other requisite characteristics as a reportable segment.

Therefore, GSUSA’s results are combined and presented within “Corporate and Other”.

These adjustments include unallocated corporate activity and eliminations, and, prior to the GSUSA Sale Date, the operational activities of GSUSA.

Prior to the GSUSA Sale Date, GSUSA operated as a stand-alone subsidiary of APEI but did not meet the quantitative thresholds to qualify as a reportable segment and did not have other requisite characteristics as a reportable segment.

Therefore, GSUSA’s results prior to the GSUSA Sale Date were combined with and presented within Corporate and Other.

Please refer to “Note 15.

5 unchanged sentences

Business combinations.

The Company accounts for business combinations in accordance with Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations , or FASB ASC 805, which requires the acquisition method to be used for all business combinations.

acquisition method to be used for all business combinations.

Under ASC 805, the assets and liabilities of an acquired company are reported at business fair value along with the fair value of acquired intangible assets at the date of acquisition.

represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed, and the fair value assigned to identifiable intangible assets.

Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed, and the fair value assigned to identifiable intangible assets.

Business Divestitures.

The Company accounts for business divestitures in accordance with FASB ASC 810, Consolidation.

On the GSUSA Sale Date, APEI completed the sale of its membership interest in its wholly owned subsidiary, GSUSA, for $ 0.5 million, subject to customary adjustments, including for net working capital and cash, and recorded a $ 3.9 million loss on sale of subsidiary.

Subsequent to the GSUSA Sale Date, APEI has no continuing involvement in GSUSA.

The sale of its membership interest in GSUSA is not considered a significant shift in the strategic focus of APEI, nor is it considered material to APEI’s operations, cash flows, and financial position, and therefore the sale of GSUSA is not accounted for as a discontinued operation.

Principles of consolidation.

13 unchanged sentences

As a trustee of these Title IV program funds, the Company is required to maintain and restrict these funds pursuant to the terms of the program participation agreement with ED.

Restricted cash also includes a $ 24.3 million restricted certificate of deposit to secure a letter of credit for the benefit of ED on behalf of RU in connection with RU’s 2020 composite score, which is used by ED for determining compliance with financial responsibility standards, being below the minimum required.

Restricted cash on the Consolidated Balance Sheets as of December 31, 2023 and 2024, excluding the restricted certificate of deposit, was $ 2.7 million and $ 1.5 million, respectively.

As of December 31, 2024, restricted cash included a $ 25.4 million restricted certificate of deposit to secure a letter of credit for the benefit of ED on behalf of RU in connection with RU’s 2020 composite score, which was used by ED for determining compliance with financial responsibility standards, being below the minimum required.

In May 2025, the letter of credit was released by ED, and the cash was thereafter no longer restricted.

Restricted cash on the Consolidated Balance Sheets as of December 31, 2024 and 2025, excluding the restricted certificate of deposit at December 31, 2024, was $ 1.5 million and $ 2.4 million, respectively.

Total restricted cash as of December 31, 2024, and 2025, was $ 27.0 million and $ 2.4 million, respectively.

8 unchanged sentences

Students may remit tuition payments upon enrollment in a course or term, or they may elect various other payment options with payment terms extending beyond the start of the course or term.

These other payment options include payments by sponsors, financial aid, alternative loans, or tuition assistance, or TA, programs, that remit payments directly to the subsidiary institution.

These other payment options include ED Title IV programs, U.S.

Department of Defense, or DoD, tuition assistance, or TA, programs, U.S.

Department of Veterans Affairs, or VA, education benefits programs, payments by sponsors, or alternative loans, that remit payments directly to the subsidiary institution.

HCN also offers extended payment plan options.

When a student remits payment after a course or term has begun, accounts receivable is reduced.

If payment is made prior to the start of a course or term, the payment is recorded as a student deposit, and the student is provided access to the course when courses start, in the case of APUS and GSUSA, or allowed to start the term, in the case of RU and HCN.

If a payment option is confirmed, the student is allowed to start the course or term.

When a student or third-party remits payment after a course or term has begun, accounts receivable is reduced.

If payment is made prior to the start of a course or term, the payment is recorded as a student deposit, and the student is provided access to the course when courses start, in the case of APUS, or allowed to start the term, in the case of RU and HCN.

payment option is confirmed, the student is allowed to start the course or term.

Generally, if no receipt is confirmed or payment option secured, the student will be dropped from the course or not allowed to start the term.

8 unchanged sentences

Recoveries of receivables previously written off are recorded when received.

APUS, RU, and GSUSA do not charge interest on past due accounts receivable.

APUS and RU do not charge interest on past due accounts receivable.

HCN charges interest on payment plans when a student leaves the payment plan program upon graduation or exits the program.

1 unchanged sentence

Assets held for sale.

Assets held for sale represent excess real property located in Charles Town, West Virginia for the Company’s APUS Segment.

Assets held for sale at December 31, 2024, represented excess real property located in Charles Town, West Virginia for the Company’s APUS Segment.

Long-lived assets are classified as held for sale when the assets are expected to be sold within the next 12 months and meet the other relevant held for sale criteria.

3 unchanged sentences

Property and equipment.

All property and equipment is carried at cost less accumulated depreciation, except the acquired assets of RU and GSUSA, which were recorded at fair value at the respective closing dates of the acquisitions.

All property and equipment is carried at cost less accumulated depreciation.

Depreciation and amortization are calculated on a straight-line basis over the estimated useful lives of the assets.

17 unchanged sentences

Goodwill and intangible assets.

Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed.

Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed, and the fair value of acquired intangible assets at the date of acquisition.

Goodwill is not amortized.

3 unchanged sentences

The Company annually assesses goodwill for impairment, or more frequently if events and circumstances indicate that goodwill might be impaired.

Goodwill impairment testing consists of an optional qualitative assessment as well as a quantitative test.

Goodwill impairment testing consists of an optional qualitative assessment as well as a

quantitative test.

The quantitative test compares the fair value of a reporting unit to its carrying value.

3 unchanged sentences

Finite-lived intangible assets are amortized on a straight-line basis over the estimated useful life of the asset.

The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The Company reviews its indefinite-lived and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

If such assets are not recoverable, a potential impairment loss is recognized to the extent the carrying amount of the assets exceeds the fair value of the assets.

7 unchanged sentences

Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell.

The Company accounts for its investments in less than majority owned companies in accordance with FASB ASC 323, Investments – Equity Method and Joint Ventures and FASB ASC 321, Investments - Equity Securities.

Prior to December 31, 2024, the Company accounted for its investments in less than majority owned companies in accordance with FASB ASC 323, Investments – Equity Method and Joint Ventures and FASB ASC 321, Investments - Equity Securities.

The Company applies ASC 323 to investments w hen it has the ability to exercise significant influence but does not control the operating and financial policies of the company.

3 unchanged sentences

Investments that do not meet the equity method requirements are accounted for using the cost method under ASC 321 with changes in the fair value of the investment reported in the Consolidated Statements of Income as equity investment income or loss.

The Company periodically evaluates its equity method investment for indicators of other-than-temporary impairments.

Factors the Company considers when evaluating for other-than-temporary impairments include the duration and severity of the impairment, the reasons for the decline in value, and the potential recovery period.

For an investee with impairment indicators, the Company measures fair value on the basis of discounted cash flows or other appropriate valuation methods.

If it is probable that the Company will not recover the carrying amount of the investment, the impairment is considered other-than-temporary and recorded in equity investment loss, and the equity investment balance is reduced to its fair value accordingly.

In each reporting period, the Company evaluates its cost method investments for observable prices changes.

Factors the Company may consider when evaluating an observable price may include significant changes in the regulatory, economic, or technological environment, changes in the general market condition, bona fide offers to purchase or sell similar investments, and other criteria.

Management must exercise significant judgment in evaluating the potential impairment of its equity investments.

During the third quarter of 2023, the Company evaluated its equity investments for indicators of impairment and concluded the fair value of a cost method investment was less than its carrying amount.

As a result, the Company recorded an investment loss of $ 5.2 million during the third quarter of 2023, on a 2012 cost method investment.

During the third quarter of 2023, the Company evaluated its equity investments for indicators of impairment and concluded the fair value of a cost method investment was less than its carrying amount and recorded an investment loss of $ 5.2 million in the same period, on a 2012 cost method investment.

This investment loss was due to the investee entering into an agreement to be sold which resulted in no sales proceeds to the Company, and the loss reduced the book value of the cost method investment to zero .

During the first quarter of 2024, the Company evaluated its equity investments for indicators of impairment and concluded the fair value of a cost method investment was less than its carrying amount.

As a result, the Company recorded an investment loss of $ 3.3 million during the first quarter of 2024, on a 2015 cost method investment.

During the first quarter of 2024, the Company evaluated its equity investments for indicators of impairment and concluded the fair value of a cost method investment was less than its carrying amount and recorded an investment loss of $ 3.3 million in the same period, on a 2015 cost method investment.

This investment loss was due to the investee entering into a new convertible debt agreement that resulted in the conversion of the Company’s preferred stock holdings in the investee into common shares, and the dilution of the Company’s ownership percentage.

The investment loss recorded reduced the book value of the cost method investment to zero .

During the second quarter of 2024, the Company sold its remaining equity method investment back to the investee, as it was no longer considered a strategic investment.

As a result, the Company recorded an investment loss of $ 1.1 million, during the second quarter of 2024, on a 2013 equity method investment.

During the second quarter of 2024, the Company sold its remaining equity method investment back to the investee, as it was no longer considered a strategic investment and recorded an investment loss of $ 1.1 million in the same period, on a 2013 equity method investment.

The investment loss recorded reduced the book value of the equity method investment to zero .

2 unchanged sentences

Prior to December 31, 2024, the Company’s equity method and cost method investments were included in Other assets, net on the accompanying Consolidated Balance Sheets.

As of December 31, 2024, the Company no longer has any investments accounted for under ASC 323 and ASC 321.

As of December 31, 2024, and 2025, the Company no longer has any investments accounted for under ASC 323 and ASC 321.

Derivatives and hedging.

3 unchanged sentences

Deferred revenue and student deposits at December 31, 2024, and 2025, was $ 23.5 million and $ 23.0 million, respectively.

Deferred revenue includes payments that have been received from students for courses or terms that are still in process and student deposits represent cash received from students prior to the commencement of a course or term and are refundable to the student in the event the student withdrawals before the start of the course or term.

Deferred revenue includes payments that have been received from students for courses or terms that are in process, and student deposits represent cash received from students prior to the commencement of a course or term and are refundable to the student in the event the student withdrawals before the start of the course or term.

Series A Senior Preferred Stock.

The Company accounts for preferred equity in accordance with FASB ASC 480, Distinguishing Liabilities from Equity, and has classified its Series A Senior Preferred Stock as permanent equity on the accompanying Consolidated Balance Sheets.

The Series A Senior Preferred Stock is recorded net of issuance costs.

Prior to the redemption of all 400 outstanding shares of the Series A Senior Preferred Stock in June 2025, the Company accounted for preferred equity in accordance with FASB ASC 480, Distinguishing Liabilities from Equity, and classified its Series A Senior Preferred Stock as permanent equity on the accompanying Consolidated Balance Sheets.

The Series A Senior Preferred Stock was recorded net of issuance costs.

Dividends on the Series A Senior Preferred Stock are presented in preferred stock dividends on the Consolidated Statements of Income.

The Series A Senior Preferred Stock is a cumulative, perpetual, redeemable instrument.

Dividends will be accrued as contractually obligated and paid upon approval by the Company’s Board of Directors.

The Series A Senior Preferred Stock was a cumulative, perpetual, redeemable instrument.

Dividends accrued as contractually obligated and were paid upon approval by the Company’s Board of Directors.

Please refer to “Note 12.

Preferred Stock” in these Consolidated Financial Statements.

Revenue recognition.

16 unchanged sentences

Uncertain tax positions are recognized when a tax position, based solely on its technical merits, is determined more likely than not to not be sustained upon examination.

Upon determination, uncertain tax positions are measured to determine the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

Upon determination, uncertain tax positions are recorded in the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

An uncertain tax position is reversed if it no longer meets the more likely than not threshold of being sustained.

There were no material uncertain tax positions as of December 31, 2023, or 2024.

The Company has not recorded any material interest or penalties during any of the years presented.

Stock-based compensation.

4 unchanged sentences

It is measured using the Company’s closing stock price on the date of the grant.

An accelerated one-year period is used to recognize stock-

based compensation cost for employees who have reached certain service and retirement eligibility criteria on the date of grant.

The fair value of each option award is estimated at the date of grant using a Black-Scholes option-pricing model that uses certain assumptions.

An accelerated one-year period is used to recognize stock-based compensation cost for employees who have reached certain service and retirement eligibility criteria on the date of grant.

The fair value of each option award is estimated at the date of grant using a Black-Scholes option-pricing model that uses

certain assumptions.

The Company makes assumptions with respect to expected stock price volatility based on the average historical volatility of the Company’s common stock.

9 unchanged sentences

Net (loss) income per common share.

Net income (loss) per common share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding during the period.

Net income (loss) available to common stockholders is net income (loss) adjusted for preferred stock dividends declared.

Diluted loss per common share is calculated by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding, increased by the shares used in the per share calculation by the dilutive effects of restricted stock and option awards.

Net (loss) income per common share is calculated by dividing net (loss) income available to common stockholders by the weighted average number of shares of common stock outstanding during the period.

Net (loss) income available to common stockholders is net (loss) income adjusted for preferred stock dividends declared.

Diluted (loss) income per common share is calculated by dividing net (loss) income available to common stockholders by the weighted average number of shares of common stock outstanding, increased by the shares used in the per share calculation by the dilutive effects of restricted stock and option awards.

Fair value of financial instruments.

20 unchanged sentences

ASUs issued but not listed were assessed and determined to be either not applicable or expected to have minimal impact on the Company’s consolidated financial position and/or results of operations.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

This standard requires the Company to disclose significant segment expenses that are regularly provided

to the chief operating decision-maker, or CODM, and are included within each reported segments operating results.

The standard also requires the Company to disclose the total amount of any other items included in segment operating results which were not deemed to be significant expenses for separate disclosure, along with a qualitative description of the composition of these other items.

In addition, the standard also requires disclosure of the CODM’s title and position, as well as detail on how the CODM uses the reported measure of segment operating results to evaluate segment performance and allocate resources.

The Company adopted this standard effective January 1, 2024, using the retrospective approach.

Additional information regarding the Company’s adoption of this standard is located in “Note 16.

Segment Information” in these Consolidated Financial Statements.

In December 2023, the FASB issued ASU No.

4 unchanged sentences

and (iii) enhanced disclosures for income taxes paid, which includes federal, state, and foreign taxes, as well as for individual jurisdictions over a certain quantitative threshold.

The guidance is effective for the fiscal years beginning after December 15, 2024, including interim periods within those fiscal years and can be applied on either a prospective or retrospective basis.

Early adoption is permitted.

The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements and related disclosures.

The Company adopted this standard effective for the year ended December 31, 2025, using the retrospective approach.

The Company’s adoption of this ASU did not have a material impact on its consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU No.

2 unchanged sentences

Early adoption is permitted.

The Company is currently evaluating this ASU to determine the impact of adoption on its consolidated financial statements and related disclosures.

Acquisition Activity

On January 1, 2022, the GSUSA Closing Date, the Company completed the GSUSA Acquisition pursuant to an Asset Purchase Agreement dated August 10, 2021, by and among American Public Training LLC, and Graduate School USA, or the Seller, for an aggregate purchase price of $ 1.0 million, subject to working capital adjustments.

At closing, the Company received approximately $ 1.9 million from the Seller, which represented the estimated net working capital at closing net of the initial cash payment to the Seller of $ 0.5 million which is the purchase price less $ 0.5 million retained by the Company to secure the indemnification obligations of the Seller.

The purchase price reflects the $ 0.5 million due to the Seller post-closing, and additional adjustments to the estimated net working capital at closing.

The Company applied the acquisition method of accounting to the GSUSA Acquisition, whereby the assets acquired and liabilities assumed were recognized at fair value on the GSUSA Closing Date.

There was no goodwill recorded as a result of the GSUSA Acquisition, but an approximate $ 3.8 million noncash, non-taxable gain on the acquisition was recorded and is included as a separate line item on the Consolidated Statements of Income for the year ended December 31, 2022 .

The preliminary opening balance sheet was subject to adjustment based on a final assessment of the fair values of certain acquired assets and liabilities assumed.

The Company had up to one year from the GSUSA Closing Date, or the measurement period, to complete the allocation of the purchase price.

The Company completed its assessment of the fair value of certain acquired assets and liabilities assumed during the measurement period, and, as a result, during the second quarter of 2022, the Company recorded a $ 0.7 million decrease in the gain on acquisition in connection with the GSUSA Acquisition based on the final working capital adjustment.

The following table summarizes the components of the consideration along with the purchase price allocation (in thousands):

Purchase Price Allocation Amount

Cash and cash equivalents $ 1,000

Working capital adjustment ( 2,450 )

Total consideration ( 1,450 )

Assets acquired:

Accounts receivable 4,282

Prepaid expenses 1,096

Property and equipment, net 400

Operating lease assets 31,635

Intangible assets 965

Total assets acquired 38,378

Liabilities assumed:

Accounts payable and accrued liabilities 810

Deferred revenue 1,969

Lease liabilities, current 1,179

Lease liabilities, long-term 30,779

Deferred income taxes 1,263

Total liabilities assumed 36,000

Net assets acquired 2,378

Gain on acquisition $ 3,828

The gain on acquisition represents the excess of the fair value of net assets acquired over consideration paid.

The consideration paid represents a substantial discount to the book value of GSUSA’s net assets at the GSUSA Closing Date, primarily due to the fair value adjustments related to the trade name, fixed assets, and right-of-use lease assets and liabilities compared to book value.

The gain on acquisition was primarily the result of prior financial results, a lack of access to capital by the Seller, and the agreed upon purchase price which reflected the fact that GSUSA needed additional capital to fund operating losses.

The fair value of the identified intangible assets, including customer contracts and relationships and trade name were determined using the income-based approach.

The fair value of curricula and accreditation and licensing identified intangible assets were determined using the cost approach.

The table below presents a summary of intangible assets acquired and the useful lives of these assets (in thousands):

Intangible Assets Useful life Amount

Customer contracts and relationships 2.5 years $ 744

Curricula 3 years 158

Trade name 1 year 35

Accreditation and licensing 2.5 years 28

Pro forma financial information relating to the GSUSA Acquisition is not presented because the GSUSA Acquisition did not represent a significant business acquisition for the Company.

For the year ended December 31, 2022, the Company incurred approximately $ 1.4 million of acquisition-related expenses related to GSUSA.

These expenses are included in general and administrative expenses on the Consolidated Statements of Income.

The Company is currently evaluating this ASU to determine the impact of adoption on its consolidated financial statements and disclosures.

The following is a description of principal activities from which the Company generates its revenue.

Instructional services.

Instructional services revenue includes tuition, contract training, and technology and laboratory fees.

The Company generally recognizes revenue ratably as instructional services are provided over the course or term, which is, for APUS, either an eight- or sixteen-week course, for RU and HCN, a quarterly term, and for GSUSA, the length of the training program.

Instructional services revenue includes tuition and technology and laboratory fees, and prior to the GSUSA Sale Date, contract training.

The Company generally recognizes revenue ratably as instructional services are provided over the course or term, which is, for APUS, either an eight- or sixteen-week course and for RU and HCN, a quarterly term, and for GSUSA, the length of the training program.

Tuition is charged by course or term, technology fees are charged to APUS students on a per course basis, and technology and laboratory fees are charged to RU and HCN students on a per term basis, when applicable.

3 unchanged sentences

APUS graduation fee revenue represents a one-time, non-refundable, fee per degree, charged to students upon submission of a program graduation application.

Effective April 2023, the fee was increased from $ 100 to $ 150 and was increased again in October 2024 from $ 150 to $ 250 per degree.

In April 2023, the fee was increased from $ 100 to $ 150 .

The graduation fee was increased to $ 250 in October 2024, and increased again to $ 350 in February 2026 for bachelor’s and master’s degrees.

This fee covers administrative costs associated with completing a review of the student’s academic and financial standing prior to graduation.

5 unchanged sentences

Payment is generally received within thirty days of the bill date.

Sales tax collected from students on the sale of textbooks and other course materials is excluded from revenue.

Sales tax collected on the sale of textbooks and other course materials is excluded from revenue.

Other fees revenue represents one-time, non-refundable fees such as application, enrollment, transcript, and other miscellaneous fees.

Generally, other fees revenue is recognized when the fee is charged to the student, which coincides with the completion of the specific performance obligation to the student.

Prior to September 2023, APUS provided an APUS-funded tuition grant for undergraduate and master’s students who are eligible for TA benefits and their spouses and dependents.

In September 2023, APUS removed these tuition grants and instead provided a Preferred Military Rate for undergraduate and master’s level courses for all U.S.

APUS provides a Preferred Military Rate of $ 250 per credit hour for undergraduate and master’s level courses for all U.S.

active-duty service members, National Guard members, Reservists, and military families.

In April 2023, coinciding with APUS tuition increases, APUS added a 10 % APUS-funded Veteran Grant for veterans and veteran’s family members, on standard undergraduate and master’s level courses, partially offsetting the tuition increases for veteran students.

In April 2024, APUS increased the Veteran Grant on master’s level courses to 15 %, and added a 10 % APUS-funded Opportunity Grant for veterans and veteran’s family members on standard undergraduate and master’s level courses.

Active-duty military students using TA at the undergraduate level are expected to generally have no out-of-pocket expenses.

In addition, APUS also provides an APUS-funded 10 % grant for veterans and veteran’s family members, or Veteran Grant, on standard undergraduate, a 15 % Veteran Grant on master’s level courses, and a 10 % Opportunity Grant for undergraduate and master’s level courses.

RU also provides an RU-funded tuition grant to support students who are U.S.

Military active-duty service members, National Guard, Reserve, retired military and veterans enrolling in a degree, Diploma or Certificate program.

active-duty military, National Guard, Reserve, retired military and veterans enrolling in a degree, diploma or certificate program.

RU also extends the grant to eligible spouses and dependents of active-duty military, retired military, and veterans.

HCN provides performance-based grants and offers an institutional affordability grant to students demonstrating financial need to cover the difference between the total cost of tuition and fees less the amount of all eligible financial aid resources.

The institutional affordability grant is designed to limit a student’s monthly payment to $ 200 through an award of up to $ 200 per month, or $ 600 per term after consideration of financial aid, employer tuition reimbursement, and other financial resources.

HCN provides HCN-funded performance-based grants and offers an HCN-funded institutional affordability grant to students demonstrating financial need to cover the difference between the total cost of tuition and fees less the amount of all eligible financial aid resources.

The institutional affordability grant is designed to limit a student’s monthly payment to $ 200

through an award of up to $ 200 per month, or $ 600 per term after consideration of financial aid, employer tuition reimbursement, and other financial resources.

APUS, RU, and HCN tuition grants and scholarships of $ 80.7 million, $ 29.9 million, and $ 36.5 million were provided for the years ended December 31, 2023, 2024, and 2025, respectively, and are included as a reduction to revenue in the accompanying Consolidated Statements of Income.

23 unchanged sentences

Total Revenue $ 319,842 $ 246,231 $ 74,983 $ 7,806 $ 648,862

Corporate and Other includes tuition and contract training revenue earned by GSUSA and the elimination of intersegment revenue.

The APUS Segment charges the HCN Segment and corporate employees for the value of courses taken at APUS by HCN Segment employees and corporate employees.

Corporate and Other includes tuition and contract training revenue earned by GSUSA through the GSUSA Sale date and the elimination of intersegment revenue for courses taken by employees of one segment at other segments.

Contract Balances and Performance Obligations

10 unchanged sentences

If a student withdraws during the academic term, the Company calculates the portion of tuition that is non-refundable based on the tuition refund policy and the applicable state laws and recognizes it as revenue in the period the withdrawal occurs.

For GSUSA, a refund is provided only if the student cancels before the start of a course.

For GSUSA, a refund was provided only if the student canceled before the start of a course.

Refund Liability

4 unchanged sentences

The Company includes this estimate in the transaction price.

The refund liabilities for APUS and GSUSA, which are included in deferred revenue, are not material for all periods presented.

APUS and GSUSA update the measurement of the refund liability at the end of each reporting period for changes in expectations, and if the reversal becomes significant, recognizes corresponding adjustments to revenue.

The refund liabilities for APUS, which are included in deferred revenue, are not material for all periods presented.

APUS updates the measurement of the refund liability at the end of each reporting period for changes in expectations, and if the reversal becomes significant, recognizes corresponding adjustments to revenue.

Because RU and HCN’s terms coincide with the Company’s fiscal quarter periods, there are no refund liabilities as of December 31, 2024, and 2025, for RU or HCN.

22 unchanged sentences

$ 73,383 $ 70,598

The Company disposed of long-lived assets resulting in a loss of $ 1.2 million, $ 0.6 million, and $ 0.4 million during the years ended December 31, 2022, 2023, and 2024, respectively.

During the years ended December 31, 2023, 2024, and 2025, the Company disposed of long-lived assets resulting in a loss of $ 0.6 million, $ 0.4 million, and $ 0.4 million, respectively.

The disposals and losses were primarily related to assets no longer in use.

The losses on long-lived assets are included as loss on disposals of long-lived assets in these Consolidated Financial Statements.

For the years ended December 31, 2022, and 2023, the APUS Segment sold certain excess real property and equipment located in Charles Town, West Virginia, for a net sales price of $ 0.8 million, and $ 0.1 million, respectively, resulting in a loss on disposals of long-lived assets of $ 0.4 million, and $ 0.1 million, respectively.

The loss is included in loss on disposals of long-lived assets in these Consolidated Financial Statements.

During the years ended December 31, 2023, 2024, and 2025, the Company recorded depreciation expense of $ 15.6 million, $ 16.0 million and $ 16.1 million, respectively.

Assets Held For Sale

Assets held for sale at December 31, 2023, and 2024, represents excess real properties located in Charles Town, West Virginia, for the Company’s APUS Segment.

Long-lived assets are classified as held for sale when the assets are expected to be sold within the next 12 months and meet the other relevant held for sale criteria.

As such, the property is recorded at the lower of the carrying value or fair value, less costs to sell, until such time the asset is sold.

For the year ended December 31, 2023, the Company estimated the fair value of a building and an undeveloped parcel of land designated as held for sale are $ 9.0 million, which, after reduction for the estimated cost to sell of approximately $ 0.4 million, resulted in a loss of $ 2.4 million.

The loss is included in loss on assets held for sale in these Consolidated Financial Statements for the year ended December 31, 2023.

During the three months ended December 31, 2024, APUS entered into an agreement to sell the undeveloped parcel of land for $ 0.5 million which approximates its carrying value.

The sale closed in the first quarter of 2025.

In the fourth quarter of 2024, APUS entered into an agreement to sell a building currently in use for $ 16.6 million.

As a result, the building was reclassified to held for sale as of December 31, 2024, resulting in a loss of $ 1.6 million based on the expected net proceeds from the sale, less estimated costs to sell.

Assets held for sale at December 31, 2024 represent excess real properties located in Charles Town, West Virginia, for the Company’s APUS Segment.

Assets are classified as held for sale when the assets are expected to be sold within the next 12 months and meet the other relevant held for sale criteria.

As such, property is recorded at the lower of the carrying value or fair value less the estimated cost to sell until such time the asset is sold.

For the year ended December 31, 2023, the Company estimated the fair value of a building and an undeveloped parcel of land designated as held for sale were $ 9.0 million, which, after reduction for the estimated cost to sell of approximately $ 0.4 million, resulted in a loss of $ 2.4 million.

The loss is included in loss on assets held for sale in these Consolidated Financial Statements for the year ended December 31, 2023.

The sale is expected to close in the third quarter of 2025.

In the fourth quarter of 2024, APUS entered into an agreement to sell a building previously in use for $ 16.6 million.

As a result, the building was reclassified to held for sale as of December 31, 2024, at the contract amount less estimated costs to sell of $ 0.7 million, or $ 15.9 million, and recorded a loss of $ 1.6 million.

The loss is included in loss on assets held for sale in these Consolidated Financials Statements for the year ended December 31, 2024.

APUS completed the sale in June 2025 for net sales proceeds of $ 15.9 million.

In the fourth quarter of 2024, APUS entered into an agreement to sell the undeveloped parcel of land classified as held for sale in 2023, for $ 0.5 million which approximated its carrying value.

APUS completed the sale in February 2025 for net sales proceeds of $ 0.5 million.

In the first quarter of 2025, APUS entered into an agreement to sell the building classified in assets held for sale in 2023, for $ 7.0 million, and recorded a loss of $ 1.5 million, based on the contract amount less estimated costs to sell of $ 0.4 million.

The loss is included in loss on assets held for sale in the accompanying Consolidated Statements of Income for the year ended December 31, 2025.

APUS completed the sale in June 2025 for net sales proceeds of $ 6.6 million.

Total cash received from the sale of assets held for sale was $ 23.0 million for the year ended December 31, 2025.

Goodwill and Intangible Assets

1 unchanged sentence

The Company recorded $ 217.4 million and $ 38.6 million of goodwill in connection with the RU and HCN acquisitions, respectively, representing the excess of the purchase price over the fair value of assets acquired and liabilities assumed, including identifiable intangible assets.

The Company recorded non-cash impairment charges in 2022 and 2023 for RU, and 2016 and 2019 for HCN, reducing the carrying value of RU and HCN goodwill to $ 33.0 million and $ 26.6 million, respectively.

The Company subsequently recorded non-cash impairment charges in 2022 and 2023 for RU, and 2016 and 2019 for HCN, reducing the carrying value of RU and HCN goodwill to $ 33.0 million and $ 26.6 million, respectively.

There was no goodwill recorded in connection with the acquisition of GSUSA.

6 unchanged sentences

If the carrying value is greater than the fair value, the difference between the two values is recorded as an impairment.

During the second quarter of 2022, the Company concluded it was more likely than not the fair value of the Company’s RU Segment was less than its carrying amount as a result of RU’s under performance compared to projections at the time of acquisition, along with the decline in market value of the Company and comparable companies.

Therefore, during the second quarter, the Company proceeded with an interim quantitative impairment test for the RU Segment.

The implied fair value of RU Segment goodwill was calculated and compared to the recorded goodwill value.

As a result, during the second quarter, the Company recorded a non-cash impairment charge of $ 131.4 million, and the corresponding tax impact of $ 36.0 million, to reduce the carrying value of RU Segment goodwill to $ 86.0 million.

The goodwill impairment charge recorded eliminated the difference between the fair value of goodwill and the book value of RU Segment goodwill.

During the fourth quarter of 2022, the Company completed its annual assessment of RU Segment goodwill for impairment and determined that the fair value was greater than the carrying value and therefore there was no impairment of RU Segment goodwill as of the valuation date which was October 31.

During the second quarter of 2023, the Company concluded it was more likely than not the fair value of the Company’s RU Segment was less than its carrying amount resulting from RU’s underperformance when compared to 2023 internal targets, projected enrollment trends, the decline in financial performance projected for the remainder of 2023 as compared to prior projections, and the Company’s market value.

During the second quarter of 2023, the Company concluded it was more likely than not that the fair value of the Company’s RU Segment was less than its carrying amount resulting from RU’s underperformance when compared to 2023 internal targets, projected enrollment trends, the decline in financial performance projected for the remainder of 2023 as compared to prior projections, and the Company’s market value.

Therefore, during the second quarter, the Company proceeded with an interim quantitative impairment test for the RU Segment.

1 unchanged sentence

As a result, the Company recorded a non-cash impairment charge of $ 53.0 million, and the corresponding tax impact of $ 15.8 million, to reduce the carrying value of RU Segment goodwill to $ 33.0 million.

The impairment charge recorded eliminated the difference between the fair value and book value of RU Segment goodwill.

The impairment charge is included as impairment of goodwill and intangible assets in these Consolidated Financial statements.

The impairment charge eliminated the difference between the fair value and book value of RU Segment goodwill.

During the fourth quarter of 2023, the Company completed its annual assessment of RU Segment goodwill for impairment and determined that the fair value was greater than the carrying value and therefore there was no impairment of RU Segment goodwill as of the valuation date which was October 31.

For the year ended December 31, 2024, the Company completed its annual assessment of RU goodwill and concluded that RU’s fair value was more than the carrying value.

For the years ended December 31, 2024 and 2025, the Company completed its annual assessment of RU goodwill and concluded that RU’s fair value was more than the carrying value;

consequently, there was no impairment.

For the years ended December 31, 2023, 2024, and 2025, the Company completed its annual assessment of HCN goodwill and concluded that HCN’s fair value was more than the carrying value;

5 unchanged sentences

Under the discounted cash flow method, fair value was determined by discounting the estimated future cash flows of RU and HCN at their estimated weighted-average cost of capital.

Under the guideline public company method, pricing multiples from other public companies in the public higher education market were used to determine the fair value of RU and

Under the guideline public company method, pricing multiples from other public companies in the public higher education market were used to determine the fair value of RU and HCN.

Values derived under the two valuation methods were then weighted to estimate RU and HCN’s enterprise values.

12 unchanged sentences

In addition to goodwill, in connection with the acquisitions of RU and HCN, the Company recorded identified intangible assets with an indefinite useful life in the aggregate amount of $ 51.0 million and $ 3.7 million, respectively, which includes trade name, accreditation, licensing and Title IV, and affiliate agreements.

There were no indefinite useful life intangible assets identified as a result of the GSUSA Acquisition.

The Company recorded $ 35.5 million, $ 4.4 million, and $ 1.0 million of identified intangible assets with a definite useful life in connection with the acquisitions of RU, HCN and GSUSA, respectively.

During the years ended December 31, 2022, 2023, and 2024, the Company recorded amortization expense related to definite lived intangible assets of $ 15.8 million, $ 12.2 million, and $ 3.3 million, respectively.

The useful life assigned to each type of intangible asset with a definite useful life was as follows:

Student contracts and relationships 2.5 years - 6 years

Non-compete agreements 5 years

Curricula 3 years

Accreditation and licensing 2.5 years

Lead conversions 2 years

Student Roster 2 years

Trade name 1 year

During the second and fourth quarters of 2022, the Company concluded it was more likely than not the fair value of the Company’s RU Segment intangible assets was less than its carrying amount as a result of RU’s under performance compared to projections at the time of acquisition, along with the decline in market value of the Company and comparable companies.

As a result, the Company completed impairment tests related to the valuation of its RU Segment intangible assets during the second and fourth quarters.

The implied fair value of intangible assets was calculated and compared to the recorded value and it was determined the fair value of the accreditation, licensing, and Title IV was $ 11.0 million, or $ 13.5 million less than its carrying value during the second quarter, and $ 9.0 million, or $ 2.0 million less than the carrying value in the fourth quarter.

As a result, the Company recorded non-cash impairment charges of $ 15.5 million to reduce the carrying value of RU Segment indefinite-lived intangible assets during 2022.

The impairment charges recorded eliminated the difference between the fair value of the accreditation, licensing, and Title IV indefinite-lived intangible assets, and the book value.

The Company subsequently recorded non-cash impairment charges of $ 26.5 million in 2022 and 2023 to reduce the carrying value of RU indefinite-lived intangible assets to $ 24.5 million.

The Company recorded $ 35.5 million and $ 4.4 million of identified intangible assets with a definite useful life in connection with the acquisitions of RU and HCN, respectively.

These identified intangible assets with a definite useful life were amortized on a straight-line basis over estimated useful lives, which were generally two to six years .

All recorded identified intangible assets with a definite useful life were fully amortized as of December 31, 2024.

During the years ended December 31, 2023 and 2024, the Company recorded amortization expense related to definite lived intangible assets of $ 12.2 million and $ 3.3 million, respectively.

During the second quarter of 2023, the Company concluded it was more likely than not the fair value of the Company’s RU Segment intangible assets was less than its carrying amount resulting from RU’s underperformance when compared to 2023 internal targets, projected enrollment trends, the decline in financial performance projected for the remainder of 2023 as compared to prior projections, and the Company’s market value.

As a result, the Company completed an impairment test related to the valuation of RU Segment intangible assets during the second quarter.

The implied fair value of intangible assets was calculated and compared to the recorded value and it was determined the fair value of the RU Segment trade name was $ 18.5 million, or $ 8.0 million less than its carrying value, and RU Segment accreditation, licensing, and Title IV was

$ 6.0 million, or $ 3.0 million less than the carrying value during the second quarter.

As a result, the Company recorded a non-cash impairment charge of $ 11.0 million to reduce the carrying values of the RU Segment indefinite-lived intangible assets during 2023.

The impairment charge is included as impairment of goodwill and intangible assets in these Consolidated Financial statements.

The impairment charge recorded eliminated the difference between the fair value of the trade name and accreditation, licensing, and Title IV indefinite-lived intangible assets, and the book value.

The Company’s annual assessment completed during the fourth quarter of 2024 concluded that the fair value of RU and HCN’s indefinite-lived intangible assets were more than the carrying values.

Accordingly, there were no impairment charges related to indefinite-lived intangible assets recorded during the year ended December 31, 2024.

The following table represents the balance of the Company’s intangible assets as of December 31, 2023 (in thousands):

Gross Carrying Amount Accumulated Amortization Impairment Net Carrying Amount

Finite-lived intangible assets

Student roster $ 20,000 $ 20,000 $ — $ —

Curricula 14,563 11,400 — 3,163

Student contracts and relationships 4,614 4,465 — 149

Lead conversions 1,500 1,500 — —

Non-compete agreements 86 86 — —

Tradename 35 35 — —

Accreditation and licensing 28 22 — 6

Total finite-lived intangible assets $ 40,826 $ 37,508 $ — $ 3,318

For the years ended December 31, 2024 and 2025, the Company’s annual assessment concluded that the fair value of RU’s indefinite lived intangible assets was more than the carrying value;

consequently, there was no impairment.

For the years ended December 31, 2023, 2024, and 2025, the Company completed its annual assessment of HCN indefinite-lived intangible assets and concluded that the fair value was more than the carrying value;

consequently, there was no impairment.

The following table represents the balance of the Company’s indefinite-lived intangible assets as of December 31, 2024 and 2025 (in thousands):

Indefinite-lived intangible assets

3 unchanged sentences

Total indefinite-lived intangible assets $ 28,221

Total intangible assets $ 95,547 $ 37,508 $ 26,500 $ 31,539

The following table represents the balance of the Company’s intangible assets as of December 31, 2024 (in thousands):

Gross Carrying Amount Accumulated Amortization Impairment Net Carrying Amount

Finite-lived intangible assets

Student roster $ 20,000 $ 20,000 $ — $ —

14,563 14,563 — —

Student and customer contracts and relationships 4,614 4,614 — —

Lead conversions 1,500 1,500 — —

Non-compete agreements

Tradename 35 35 — —

Accreditation and licensing 28 28 — —

Total finite-lived intangible assets $ 40,826 $ 40,826 $ — $ —

Indefinite-lived intangible assets

28,498 — 8,000 20,498

Accreditation, licensing, and Title IV 26,186 — 18,500 7,686

Affiliation agreements 37 — — 37

Total indefinite-lived intangible assets

54,721 — 26,500 28,221

Total intangible assets

$ 95,547 $ 40,826 $ 26,500 $ 28,221

Finite-lived intangible assets were amortized in a manner that reflected the estimated economic benefit of the intangible assets and were amortized on a straight-line basis.

As of December 31, 2024, all recorded identified intangible assets with a definite useful life related to the acquisitions of RU, HCN, and GSUSA, were fully amortized.

Determining fair value requires judgment and the use of significant estimates and assumptions, including fluctuations in enrollments, revenue growth rates, operating margins, discount rates, and future market conditions, among others.

Given the current competitive and regulatory environment and the uncertainties regarding the related impact on the business, there can be no assurance that the estimates and assumptions made for purposes of the Company’s interim and annual goodwill and intangible asset impairment tests will prove to be accurate predictions of the future.

current competitive and regulatory environment and the uncertainties regarding the related impact on the business, there can be no assurance that the estimates and assumptions made for purposes of the Company’s interim and annual goodwill and intangible asset impairment tests will prove to be accurate predictions of the future.

If the Company’s assumptions are not realized, the Company may record additional goodwill and intangible asset impairment charges in future periods.

12 unchanged sentences

The Company leases corporate office space in Florida, under an operating lease that expires in January 2029.

The RU Segment leases administrative office space in Minneapolis, Minnesota, and leases 20 campuses located in six states under operating leases that expire through March 2034.

The HCN Segment leases administrative office space in suburban Columbus,

Ohio, and leases eight campuses located in three states under operating leases that expire through December 2034.

GSUSA leases classroom and administrative office space in Washington, D.C.

and Honolulu, Hawaii under operating leases that expire through September 2036.

The RU Segment leases 18 campuses located in five states under operating leases that expire through March 2034.

RU closed one campus in Wisconsin in December 2025 and plans to close a second Wisconsin campus in December 2026.

The RU Segment leased administrative office space in Minneapolis, Minnesota until October 31, 2025.

The HCN Segment leases administrative office space in suburban Columbus, Ohio, and leases eight campuses located in three states under operating leases that expire through December 2034.

Prior to the GSUSA Sale Date, GSUSA leased classroom and administrative office space in Washington, D.C.

and Honolulu, Hawaii.

Operating lease assets are ROU assets, which represent the right to use an underlying asset for the lease term.

6 unchanged sentences

There are no variable lease payments.

Lease expense for the years ended December 31, 2022, 2023, and 2024, was approximately $ 19.9 million, $ 20.7 million, and $ 18.9 million, respectively.

Operating lease expense for the years ended December 31, 2023, 2024, and 2025, was $ 20.7 million, $ 18.9 million, and $ 16.9 million, respectively.

These costs are primarily related to long-term operating leases, but also include amounts for short-term leases with terms greater than 30 days that are not material.

3 unchanged sentences

The Company paid a lease termination fee of $ 2.2 million and recorded a loss of $ 2.1 million as a result of this lease termination.

Additionally, during the second quarter of 2024, the Company paid a lease termination fee of $ 1.2 million related to the consolidation of two RU campuses in Minnesota.

In May 2024, RU notified the Wisconsin Educational Approval Program that it intends to voluntarily close two Wisconsin campuses, effective December 31, 2025, and 2026, respectively.

As a result, the Company recorded a lease impairment of $ 0.4 million during the second quarter of 2024.

The total loss on leases during the year ended December 31, 2024, was $ 3.7 million and is included in Loss on leases in the Consolidated Statements of Income.

Additionally, in the first quarter of 2024, the RU Segment began consolidating two Minnesota campuses, and, as a result, during the second quarter of 2024, the Company paid a lease termination fee of $ 1.2 million related to the consolidation and recorded $ 1.2 million loss on leases as a result of the lease termination.

In May 2024, RU notified the Wisconsin Educational Approval Program that it intended to voluntarily close two Wisconsin campuses, effective December 31, 2025, and 2026, respectively.

RU closed the Green Bay campus effective December 31, 2025, as planned, and intends to close the Wausau campus on December 31, 2026.

As a result, the Company recorded a lease impairment of $ 0.4 million during the second quarter of 2024, and recorded an additional lease impairment of $ 0.1 million during the third quarter in 2025.

The total loss on leases during the years ended December 31, 2024 and 2025, was $ 3.7 million and $ 0.1 million and is included in Loss on leases in the Consolidated Statements of Income.

Finance Leases

The Company leases copiers and printers for RU and GSUSA, pursuant to leases that are classified as finance leases and that expire in 2027.

The Company leases copiers and printers pursuant to leases that are classified as finance leases and that expire in 2027.

The Company pledged the assets financed to secure the outstanding lease obligations.

1 unchanged sentence

The ROU assets are recorded within Property and equipment, net on the Consolidated Balance Sheets.

Lease amortization expense associated with the Company’s finance leases was approximately $ 0.1 million, $ 0.1 million, and $ 0.2 million for the years ended December 31, 2022, 2023, and 2024, respectively, and is recorded within Depreciation and amortization expense on the Consolidated Statements of Income.

Lease amortization expense associated with the Company’s finance leases was $ 0.1 million, $ 0.2 million, and $ 0.2 million for the years ended December 31, 2023, 2024, and 2025, respectively, and is recorded within Depreciation and amortization expense on the Consolidated Statements of Income.

The following tables present information about the amount and timing of cash flows arising from the Company’s operating and finance leases as of December 31, 2025 (dollars in thousands):

4 unchanged sentences

2029 10,913 —

2029 13,602 —

2031 and beyond 20,394 —

20 unchanged sentences

and Truist Securities, Inc., as lead arrangers and joint bookrunners, and certain lenders party thereto, or the Lenders.

The Credit Agreement provides for (i) a senior secured term loan facility in an aggregate original principal amount of $ 175.0 million, or the Term Loan, with a scheduled maturity date of September 1, 2027 and (ii) a senior secured revolving loan facility in an aggregate commitment amount of $ 20.0 million, or the Revolving Credit Facility, and, together with the Term Loan, is referred to as the Facilities, with a scheduled maturity date of September 1, 2026, the full capacity of which may be utilized for the issuance of letters of credit.

The Credit Agreement provides for (i) a senior secured term loan facility in an aggregate original

principal amount of $ 175.0 million, or the Term Loan, with a scheduled maturity date of September 1, 2027 and (ii) a senior secured revolving loan facility in an aggregate commitment amount of $ 20.0 million, or the Revolving Credit Facility, and, together with the Term Loan, is referred to as the Facilities, with a scheduled maturity date of September 1, 2026, the full capacity of which may be utilized for the issuance of letters of credit.

The Revolving Credit Facility also includes a $ 5.0 million sub-facility for swing line loans.

4 unchanged sentences

There were no borrowings outstanding on the Revolving Credit Facility as of December 31, 2024, and 2025.

greater of (a) $ 91.0 million and (b) an amount equal to consolidated EBITDA on a pro forma basis for the most recently ended four-quarter period (less the aggregate amount of certain other incremental indebtedness permitted to be incurred by APEI, and plus the aggregate amount of voluntary prepayments of certain other incremental indebtedness permitted to be incurred by APEI) and (ii) an amount (a) in the case of secured incremental facilities that rank pari passu with the Facilities, such that the First Lien Net Leverage Ratio would not be greater than 1.50 to 1.00 and the Total Net Leverage Ratio would not be greater than 2.00 to 1.00, (b) in the case of secured incremental facilities that rank junior to the Facilities, such that the Secured Net Leverage Ratio would not be greater than 1.75 to 1.00 and the Total Net Leverage Ratio would not be greater than 2.00 to 1.00, and (c) in the case of unsecured incremental facilities, such that the Total Net Leverage Ratio would not be greater than 2.00 to 1.00 or the Interest Coverage Ratio would not be less than 2.00 to 1.00.

The Credit Agreement provides the Company with the option, subject to certain conditions, including obtaining commitments from one or more lenders, to increase the total commitments under the Revolving Credit Facility, increase the amount of the Term Loan and/or incur incremental term loan facilities in an aggregate amount not to exceed the sum of (i) the greater of (a) $ 91.0 million and (b) an amount equal to consolidated EBITDA on a pro forma basis for the most recently ended four-quarter period (less the aggregate amount of certain other incremental indebtedness permitted to be incurred by APEI, and plus the aggregate amount of voluntary prepayments of certain other incremental indebtedness permitted to be incurred by APEI) and (ii) an amount (a) in the case of secured incremental facilities that rank pari passu with the Facilities, such that the First Lien Net Leverage Ratio would not be greater than 1.50 to 1.00 and the Total Net Leverage Ratio would not be greater than 2.00 to 1.00, (b) in the case of secured incremental facilities that rank junior to the Facilities, such that the Secured Net Leverage Ratio would not be greater than 1.75 to 1.00 and the Total Net Leverage Ratio would not be greater than 2.00 to 1.00, and (c) in the case of unsecured incremental facilities, such that the Total Net Leverage Ratio would not be greater than 2.00 to 1.00 or the Interest Coverage Ratio would not be less than 2.00 to 1.00.

The First Lien Net Leverage Ratio, the Secured Net Leverage Ratio and the Total Net Leverage Ratio are each defined in the Credit Agreement and reflect a ratio of (x) in the case of the First Lien Net Leverage Ratio, consolidated first lien indebtedness (net of unrestricted cash and cash equivalents in excess of $ 50.0 million) to consolidated EBITDA, (y) in the case of the Secured Net Leverage Ratio, consolidated secured indebtedness (net of unrestricted cash and cash equivalents in excess of $ 50.0 million) to consolidated EBITDA, and (z) in the case of the Total Net Leverage Ratio, consolidated total indebtedness to consolidated EBITDA.

The Interest Coverage Ratio is also defined in the Credit Agreement and reflects a ratio of consolidated EBITDA to consolidated interest expense.

In June 2023, in connection with the cessation of publication of the London Interbank Offered Rate, or LIBOR, the Credit Agreement was amended to change the applicable floating index rate at which interest on borrowings under the Facilities would accrue from LIBOR to Term Secured Overnight Financing Rate, or Term SOFR (as defined in the Credit Agreement, as amended), a forward-looking term rate.

Outstanding borrowings under the Facilities bear interest at a per annum rate equal to Term SOFR (plus a credit spread adjustment ranging from 0.11448 % to 0.42826 % depending on the interest period selected by APEI and subject to a 0.75 % floor after giving effect to such adjustment) plus 5.50 %, which shall increase by an additional 2.00 % on all past due obligations if APEI fails to pay any amount when due.

Outstanding borrowings under the Facilities bear interest at a per annum rate equal to Term Secured Overnight Financing Rate, or Term SOFR, plus 5.50 % (plus a credit spread adjustment ranging from 0.11448 % to 0.42826 % depending on the interest period selected by APEI, and subject to a 0.75 % floor after giving effect to such adjustment), which shall increase by an additional 2.00 % on all past due obligations if APEI fails to pay any amount when due.

As of December 31, 2025, the Facilities borrowing rate was 9.53 % excluding any offset from the interest rate cap agreement described below.

An unused commitment fee in the amount of 0.50 % is payable quarterly in arrears based on the average daily unused amount of the commitments under the Revolving Credit Facility.

APEI is required to make principal payments of the Term Loan on the last day of each quarter in an amount equal to $ 2.2 million per quarter.

The Credit Agreement requires APEI to make principal payments of the Term Loan on the last day of each quarter in an amount equal to $ 2.2 million per quarter.

During the years ended December 31, 2023, 2024, and 2025, APEI paid $ 9.6 million, $ 9.4 million, and $ 11.1 million, respectively, of interest, amortization of debt issuance costs and unused commitment fees related to its Term Loan and Revolving Credit Facility.

2 unchanged sentences

In addition, as a result of the debt prepayment, the Company wrote off a proportionate amount of unamortized debt issuance costs in the amount of $ 3.9 million.

The write off is recorded in interest expense on the Consolidated Statements of Income for the year ended December 31, 2022.

Subject to certain exceptions, including debt prepayments, the Term Loan contains mandatory prepayment requirements, including with respect to excess cash flow, proceeds of certain asset sales, casualty and condemnation events, and unpermitted debt issuances.

With the December 2022 debt prepayment, APEI had no mandatory prepayment obligation for the year ended December 31, 2023.

During second quarter of 2024, as a result of the annual 2023 excess cash flow calculation, APEI paid $ 2.6 million in principal on the Term Loan.

APEI had no mandatory prepayment obligation for the years ended December 31, 2024 and 2025.

The Facilities are and will be guaranteed by APEI’s subsidiaries and certain of APEI’s future subsidiaries that are required to become a party thereto as guarantors, or Guarantors.

3 unchanged sentences

As of December 31, 2025, the Company was in compliance with all debt covenants.

Please refer to “Note 13.

Preferred Stock” in these Consolidated Financial Statements for information on certain restrictions placed on the Company’s indebtedness pursuant to the terms of the Company’s Series A Senior Preferred Stock.

Prior to the redemption of the Company’s Series A Senior Preferred Stock in June 2025, the Company was subject to certain restrictions placed on its indebtedness pursuant to the terms of the Series A Senior Preferred Stock.

Long-term debt consists of the following (in thousands):

11 unchanged sentences

On September 30, 2021, the Company entered into an interest rate cap agreement to manage its exposure to the variable rate of interest with a total notional value of $ 87.5 million.

This interest rate cap agreement, designated as a cash flow hedge, provided the Company with interest rate protection in the event the LIBOR rate exceeded 2.0 %.

The interest rate cap was effective October 1, 2021, and was scheduled to expire on January 1, 2025.

In connection with cessation of publication of LIBOR, the Company terminated its existing interest rate cap agreement and entered into a new interest rate cap agreement that transitioned the benchmark rate to Term SOFR effective June 30, 2023.

The new interest rate cap agreement was structured in a way that there was no change in the value to the Company and provided the Company with interest rate protection in the event that the Term SOFR rate exceeded 1.78 %.

On June 30, 2023, in connection with the transition of the benchmark rate to Term SOFR, the Company entered into a new interest rate cap agreement designated as a cash flow hedge with the same notional value to provide the Company with interest rate protection in the event Term SOFR rate exceeded 1.78 %.

The interest rate cap agreement expired on December 31, 2024.

3 unchanged sentences

These amounts subsequently are reclassified into interest expense as a yield adjustment of the hedged interest payments in the same period in which the related interest affects earnings.

For the years ended December 31, 2023, and 2024, the Company reclassified approximately $ 2.9 million and $ 3.0 million, respectively, from other comprehensive income to interest expense.

The components of income tax expense were as follows (in thousands):

For the year ended December 31, 2024, the Company reclassified $ 3.0 million from other comprehensive income to interest expense.

For the year ended December 31, 2025, the amount reclassified from other comprehensive income to interest expense was no t material to the financial statements.

The components of income tax (benefit) expense were as follows (in thousands):

Year Ended December 31,

15 unchanged sentences

Allowance for doubtful accounts 3,737 4,487

Interest expenses 1,108 —

Restricted stock 1,801 2,013

Accrued vacation and severance 475 768

Investment 2,071 4,098

Investments 4,098 4,171

Stock compensation expense 38 —

Other comprehensive income - unrealized loss on interest rate cap — 6

Other 909 688

Stock option compensation expense 305 38

Deferred revenue 36 —

Total gross deferred tax assets 79,568 65,786

6 unchanged sentences

Prepaid expenses ( 49 ) ( 1,032 )

Other comprehensive income - unrealized gain on interest rate cap ( 544 ) —

Stock compensation expense — ( 295 )

Total deferred tax liabilities ( 27,848 ) ( 22,014 )

Deferred tax assets, net $ 47,311 $ 39,176

At December 31, 2024, the Company had apportioned state net operating loss carryforwards of $ 6.4 million and federal capital loss carryforwards of $ 12.8 million, respectively, which are available to offset future taxable income.

At December 31, 2023, the Company had apportioned state net operating loss carryforwards of $ 4.4 million and federal capital loss carryforwards of $ 7.9 million, respectively, which are available to offset future taxable income.

At December 31, 2024 and 2025, the Company had apportioned state net operating loss carryforwards of $ 6.4 million and $ 9.3 million, respectively, and federal capital loss carryforwards of $ 12.8 million in both years, which are available to offset future taxable income.

The federal capital loss carryforwards will begin to expire in 2026 while the state net operating loss carryforwards will begin to expire in various years from 2036 through 2045.

The amount of state net operating losses that can be carried forward indefinitely is $ 6.7 million.

Company’s utilization of net operating loss carryforwards may be subject to annual limitations due to ownership change provisions of Section 382 of Internal Revenue Code of 1986, as amended.

Income tax (benefit) expense differs from the amount of tax determined by applying the United States Federal income tax rates to pretax income and loss due to the application of state apportionment laws, permanent tax differences, and other temporary differences (in thousands):

The Company’s utilization of net operating loss carryforwards may be subject to annual limitations due to ownership change provisions of Section 382 of Internal Revenue Code of 1986, as amended.

Income tax (benefit) expense differs from the amount of tax determined by applying the U.S.

federal income tax rates to pretax loss and income due to the application of state apportionment laws, permanent tax differences, and other temporary differences (in thousands):

Year Ended December 31,

1 unchanged sentence

Amount % Amount % Amount %

Tax expense at statutory rate $ ( 31,778 ) 21.00 % $ ( 12,180 ) 21.00 % $ 5,572 21.00 %

State taxes, net ( 4,163 ) 2.75 % ( 1,084 ) 1.87 % 2,205 8.31 %

Permanent differences 318 ( 0.21 ) % 270 ( 0.47 ) % 502 1.89 %

federal Statutory tax rate $ ( 12,180 ) 21.00 % $ 5,572 21.00 % $ 9,178 21.00 %

State and local income taxes, net of federal income tax effect (1)(2)(3)

( 897 ) 1.55 % 2,991 11.27 % 2,571 5.88 %

Changes in Valuation allowance 1,265 ( 2.18 ) % 1,838 6.93 % — — %

Nontaxable or nondeductible items

Loss on equity investment — — % ( 812 ) ( 3.06 ) % — — %

Equity-based compensation benefits 837 ( 1.44 ) % 194 0.73 % ( 1,083 ) ( 2.47 ) %

Gain on acquisition ( 947 ) 0.63 % — — % — — %

Valuation allowance ( 197 ) 0.13 % 1,614 ( 2.78 ) % 2,249 8.48 %

Other 12 ( 0.01 ) % ( 172 ) 0.29 % 509 1.92 %

Executive compensation 172 ( 0.31 ) % 395 1.49 % 1,315 3.01 %

Other permanent differences 98 ( 0.17 ) % 97 0.37 % 127 0.29 %

Other adjustments ( 10 ) 0.02 % 144 0.54 % 40 0.09 %

Effective tax rate $ ( 10,715 ) 18.47 % $ 10,419 39.27 % $ 12,148 27.80 %

(1) In 2023, state taxes in Minnesota, Florida, Illinois, Georgia, California, and Virginia made up the majority (greater than 50 %) of the tax effect in this category.

(2) In 2024, state taxes in Georgia, Florida, Minnesota, Illinois, Maryland, North Carolina, and Texas made up the majority (greater than 50 %) of the tax effect in this category.

(3) In 2025, state taxes in Florida, Minnesota, Illinois, Georgia, Mississippi, Maryland, and Texas made up the majority (greater than 50 %) of the tax effect in this category.

The Company paid cash taxes for the years ended December 31, 2023, 2024, or 2025 as follows (in thousands):

Year Ended December 31,

2023 2024 2025

Permanent differences in the table above are mainly attributable to executive and stock compensation, and nondeductible meals and entertainment expenses.

Cash paid for U.S.

federal income taxes, net $ — $ 2,700 $ 4,000

Cash paid for state and local income taxes, net 2,417 3,604 2,516

$ 2,417 $ 6,304 $ 6,516

Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions (in thousands):

Year Ended December 31,

2023 2024 2025

Georgia $ 267 $ 427 *

Minnesota 233 * *

Maryland 210 * *

Florida 207 * *

North Carolina 148 * *

Texas 142 * *

Pennsylvania 129 * *

* Jurisdiction below the threshold for the period presented

There were no material uncertain tax positions as of December 31, 2023, 2024, or 2025.

9 unchanged sentences

The Company made discretionary contributions to the plan of $ 6.3 million, $ 6.4 million, and $ 6.6 million for the years ended December 31, 2023, 2024, and 2025, respectively.

The Company has established the ESPP with quarterly enrollment periods.

Eligible participants may only enter the plan and establish their withholdings at the start of an enrollment period.

Participating employees may withdraw from the plan and end payroll deductions at any time up to five days before the share purchase date and funds will be returned to them.

Under the ESPP, participating employees may purchase shares of the Company’s common stock, subject to certain limitations, at 85 % of its fair market value on the last day of the quarterly period.

The total value of contributions per participant may not exceed $ 21,000 annually or the value of the common stock purchased per participant cannot exceed $ 25,000 .

In 2014, 2020, and again in 2023, the Company’s stockholders approved amendments to the plan increasing the number of shares available for purchase by participating employees and extended the term of the ESPP.

The Company has an Employee Stock Purchase Plan, or ESPP, with quarterly enrollment periods.

Effective December 31, 2023, the Company elected to suspend the ESPP.

Beginning January 1, 2024, eligible employees may no longer purchase shares of the Company’s common stock through the ESPP until such time as the Company reinstates the plan.

Shares purchased in the open market for issuance to employees pursuant to the plan for the years ended December 31, 2022, and 2023, were as follows:

Purchase Date Shares Common Stock

Fair Value Purchase Price Compensation Expense

March 31, 2022 9,112 $ 21.24 $ 18.05 $ 29,031

June 30, 2022 12,380 $ 16.16 $ 13.74 $ 30,009

September 30, 2022 23,407 $ 9.14 $ 7.77 $ 32,091

December 31, 2022 15,947 $ 12.86 $ 10.93 $ 30,762

Total/Weighted Average 60,846 $ 13.36 $ 11.35 $ 121,893

March 31, 2023 20,002 $ 5.42 $ 4.61 $ 16,262

June 30, 2023 41,729 $ 4.74 $ 4.03 $ 29,669

September 30, 2023 34,332 $ 4.71 $ 4.00 $ 24,256

December 31, 2023 16,488 $ 9.96 $ 8.47 $ 24,633

Total/Weighted Average 112,551 $ 5.62 $ 4.77 $ 94,820

For the year ended December 31, 2023, compensation expense recognized in connection with the ESPP was approximately $ 0.1 million.

Stockholders’ Equity

1 unchanged sentence

The American Public Education, Inc.

2017 Omnibus Incentive Plan, or 2017 Incentive Plan, became effective on May 12, 2017, or the Effective Date.

Upon effectiveness of the 2017 Incentive Plan, the Company ceased making awards under the American Public Education, Inc.

2011 Omnibus Incentive Plan, or the 2011 Incentive Plan.

The 2017 Incentive Plan allows the Company to grant up to 1,675,000 shares, as well as shares of the Company’s common stock that were available for issuance under the 2011 Incentive Plan as of the Effective Date.

In addition, the number of shares of common stock available under the 2017 Incentive Plan was increased from time to time by the number of shares subject to outstanding awards granted under the 2011 Incentive Plan that terminate by expiration, forfeiture, cancellation or otherwise without issuance of such shares following the Effective Date.

On May 15, 2020, the Company’s stockholders approved an amendment to the 2017 Incentive Plan to increase the number of shares available for issuance thereunder by 1,425,000 and to extend the term of the 2017 Plan to May 15, 2030, as well as to clarify limitations on repricing.

On May 20, 2022, the Company’s stockholders approved an amendment to the 2017 Incentive Plan to increase the number of shares available for issuance thereunder by 1,125,000 and to clarify provisions on vesting in dividends or dividend equivalent rights paid on unvested awards and the determination of fair market value.

On May 19, 2023, the Company’s stockholders approved an amendment to increase the number of shares available for issuance thereunder by 1,200,000 .

2017 Omnibus Incentive Plan, or 2017 Incentive Plan, became effective on May 12, 2017.

Grants under the 2017 Incentive Plan generally vest over a period of three years and the Company recognizes compensation expense over that period.

1 unchanged sentence

The Company recognizes compensation expense for these individuals over the accelerated one year period.

As of December 31, 2024, all shares subject to outstanding awards are under the 2017 Incentive Plan.

Restricted Stock and Restricted Stock Unit Awards

2 unchanged sentences

The Company recognizes the estimated fair value of performance-based restricted stock units by assuming the satisfaction of any performance-based objectives at the “target” level, which is the most probable outcome determined for accounting purposes at the time of grant and multiplying the corresponding number of shares earned based upon such achievement by the closing price of the Company’s stock on the date of grant.

To the extent performance goals are not met, compensation cost is not ultimately recognized against the goals and, to the extent previously recognized, compensation cost is reversed.

To the extent performance goals are not met, compensation cost is not ultimately recognized against the goals and, to the extent

previously recognized, compensation cost is reversed.

The Company also estimates forfeitures of share-based awards at the time of grant and revises such estimates in subsequent periods if actual forfeitures differ from original estimates.

4 unchanged sentences

Non vested, December 31, 2022

669,673 $ 22.00

Shares granted 831,746 11.83

2 unchanged sentences

Non vested, December 31, 2023

1,052,164 $ 14.74

The table below sets forth the restricted stock and restricted stock unit activity for the year ended December 31, 2024:

3 unchanged sentences

Non vested, December 31, 2023

1,052,164 $ 14.74

Shares granted 595,976 10.71

2 unchanged sentences

Non vested, December 31, 2024

1,106,256 $ 12.63

The table below sets forth the restricted stock and restricted stock unit activity for the year ended December 31, 2025:

17 unchanged sentences

In addition, the Company determines the risk-free interest rate by selecting the U.S.

Treasury constant maturity for the same maturity as the estimated life of the option , quoted on an investment basis in effect at the time of grant for that business day.

Estimates of fair value are subjective and are not intended to predict actual future events, and

subsequent events are not necessarily indicative of the reasonableness of the original estimates of fair value made under ASC 718 .

constant maturity for the same maturity as the estimated life of the option , quoted on an investment basis in effect at the time of grant for that business day.

Estimates of fair value are subjective and are not intended to predict actual future events, and subsequent events are not necessarily indicative of the reasonableness of the original estimates of fair value made under ASC 718 .

Options currently outstanding vest ratably over a period of three years and expire ten years from the date of grant.

6 unchanged sentences

Outstanding, December 31, 2022

133,588 $ 21.04 8.09 $ 37

Options granted 33,762 6.71 10 $ —

2 unchanged sentences

Outstanding, December 31, 2023

163,382 $ 17.95 7.73 $ 119

Exercisable, December 31, 2023

83,644 $ 23.16 6.78 $ —

The table below sets forth stock option activity for the year ended December 31, 2024:

5 unchanged sentences

Outstanding, December 31, 2023

163,382 $ 17.95 7.73 $ 119

Options granted — — — $ —

2 unchanged sentences

Outstanding, December 31, 2024

152,970 $ 18.57 6.64 $ 799

Exercisable, December 31, 2024

116,332 $ 21.10 6.25 $ 397

The table below sets forth stock option activity for the year ended December 31, 2025:

13 unchanged sentences

66,710 $ 19.52 4.78 $ 1,220

The following table sets forth the assumptions used in calculating the fair value at the date of grant of each option award granted for the years ended December 31, 2022, and 2023.

There were no options granted during the year ended December 31, 2024:

The following table sets forth the assumptions used in calculating the grant date fair value of each option award granted for the year ended December 31, 2023.

There were no options granted during the years ended December 31, 2024 and 2025:

Year Ended December 31,

5 unchanged sentences

For the years ended December 31, 2023, 2024, and 2025, there were 163,382 , 109,638 , and 470 anti-dilutive stock options, respectively, excluded from the calculation of diluted net income per share.

At December 31, 2024, total unrecognized compensation expense in the amount of $ 0.1 million relates to non-vested stock options, which will be recognized over a weighted average period of 0.8 years.

At December 31, 2025, total unrecognized compensation expense in the amount of $ 7,472 relates to non-vested stock options, which will be recognized over a weighted average period of 0.2 years.

Stock-Based Compensation Expense

For the years ended December 31, 2022, 2023, and 2024, the Company recognized stock-based compensation expense as follows:

For the years ended December 31, 2023, 2024, and 2025, the Company recognized stock-based compensation expense as follows (in thousands):

Year Ended December 31,

2023 2024 2025

(In thousands)

Instructional costs and services $ 895 $ 808 $ 770

3 unchanged sentences

The Company recognized income tax benefits of $ 1.1 million, $ 1.9 million, and $ 3.4 million from vested restricted stock and restricted stock units for the years ended December 31, 2023, 2024, and 2025, respectively.

The Company’s Board of Directors has approved a stock repurchase program for common stock, under which the Company can annually purchase up to the cumulative number of shares issued or deemed issued in that year under the equity incentive and stock purchase plans.

Repurchases may be made from time to time in the open market at prevailing market prices or in privately negotiated transactions based on business and market conditions.

The Company’s Board of Directors approved a stock repurchase program for common stock, under which the Company could annually purchase up to the cumulative number of shares issued or deemed issued in that year under the equity incentive and stock purchase plans.

Repurchases could be made from time to time in the open market at prevailing market prices or in privately negotiated transactions based on business and market conditions.

The stock repurchase program does not obligate the Company to repurchase any shares, may be suspended or discontinued at any time, and is funded using available cash.

On May 2, 2019, the Company’s Board of Directors authorized the repurchase of up to $ 35.0 million of the Company’s shares of common stock, and on December 5, 2019, the Board approved an additional authorization of up to $ 25.0 million of shares, of which approximately $ 8.4 million remained available at December 31, 2022.

Further, on November 27, 2023, the Company’s Board of Directors authorized a new program to repurchase up to an additional $ 10.0 million of shares of the Company’s common stock.

In November 2023, the Company’s Board of Directors authorized the repurchase of up to $ 10.0 million of shares of the Company’s common stock.

Subject to market conditions, applicable legal requirements, and other factors, the repurchases under these authorizations may be made from time to time in the open market or in privately negotiated transactions, in transactions structured through investment banking institutions, or a combination thereof.

2 unchanged sentences

The amount and timing of repurchases are subject to a variety of factors, including liquidity, cash flow, stock price and general business and market conditions.

The authorization under this program is in addition to the Company’s repurchase program under which the Company may annually purchase up to the cumulative number of shares issued or deemed issued in that year under its equity incentive and stock purchase plan.

The Company’s credit agreement includes restrictions on its ability to repurchase its common stock, and the terms of the Series A Senior Preferred Stock require the consent of the holders of at least 60 % of the then outstanding shares of the Series A Senior Preferred Stock in order for the Company to repurchase more than $ 30.0 million of its common stock in the aggregate.

During the year ended December 31, 2022, the Company did not repurchase shares of common stock.

During the years ended December 31, 2023, and 2024, the Company repurchased 1,515,766 and 251,146 shares of common stock for $ 9.7 million and $ 2.8 million, respectively.

Effective February 1, 2024, the Company ceased purchases under the November 2023 purchase authorization, and, as of December 31, 2024, the Company has $ 6.0 million remaining under this share repurchase authorization.

The authorization under this program was in addition to the Company’s repurchase program under which the Company was authorized to annually purchase up to the cumulative number of shares issued or deemed issued in that year under its equity incentive and stock purchase plan.

The Company’s credit agreement includes restrictions on its ability to repurchase its common stock.

During the years ended December 31, 2023, and 2024, the Company repurchased 1,515,766 and 251,146 shares of common stock for $ 9.7 million and $ 2.8 million, respectively, under the November 2023 and prior repurchase authorizations.

Effective February 1, 2024, the Company ceased purchases under the November 2023 purchase authorization, and the Company did not repurchase shares of common stock during the year ended December 31, 2025.

As of December 31, 2025, the Company has approximately $ 6.0 million remaining under this share repurchase authorization.

During the years ended December 31, 2023, 2024, and 2025, the Company was deemed to have repurchased 91,855 , 122,186 , and 181,387 shares, respectively, of common stock forfeited by employees to satisfy minimum tax-withholding requirements in connection with the vesting of restricted stock grants.

2 unchanged sentences

On December 28, 2022, APEI issued $ 40 million of the Series A Senior Preferred Stock, $ 0.01 par value per share, to affiliates of existing common stockholders of the Company.

The Series A Senior Preferred Stock has cumulative dividends that accrue daily at the annual rate which is equal to Term SOFR (selected by the Company for each divided period), plus 10.00 %.

On the 30-month anniversary of issuance, the dividend rate spread shall increase by 2.00 % per annum and shall increase by 0.50 % per annum at the beginning of each full fiscal quarter thereafter.

The dividend rate spread increases 6.00 % in the event of default, a change of control, or other non-compliance as noted in the related Certificate of Designation and the purchase agreement for the shares of Series A Senior Preferred Stock, or the Purchase Agreement.

Other than an increase in the dividend rate spread relating to default, in no event will the dividend rate spread exceed SOFR plus 25.00 %.

As of December 31, 2024, the dividend rate was 14.32 % based on a three-month dividend period.

Dividend periods will be monthly, every three months or every six months , at the Company’s option, and the Company currently anticipates using a three-month period.

Dividends will be paid, after declaration by the Company’s Board of Directors, for each dividend period.

If the Company selects a six-month dividend period, an interim dividend payment will be required for each three-month period therein.

During the years ended December 31, 2023, and 2024, $ 6.0 million and $ 6.1 million of dividends were declared and paid on the Series A Senior Preferred Stock, respectively.

The Series A Senior Preferred Stock has no stated maturity, is not convertible, is not subject to any mandatory redemption, sinking fund or other similar provisions, and will remain outstanding unless redeemed at the Company’s option.

The Company has the right to redeem the Series A Senior Preferred Stock pro rata in whole or in part at the price per share equal to the liquidation preference, or the Liquidation Preference, plus any applicable early premium amount noted in the Certificate of Designation and Purchase Agreement.

The Liquidation Preference of $ 55.3 million and $ 47.0 million of December 31, 2023, and 2024, respectively, is based on the occurrence of a liquidation event, which is also considered an event of default as defined in the Certificate of Designation.

The Liquidation Preference includes an early redemption premium amount and a make-whole payment for any redemption of the securities prior to June 30, 2025.

As of December 31, 2023, and 2024, the make-whole payment included in the Liquidation Preference was $ 12.3 million and $ 4.0 million, respectively.

The make-whole payment included in the Liquidation Preference will be reduced quarterly until June 30, 2025, at which time it will be eliminated.

Events of default trigger an increase of the dividend rate spread of 6.00 % and an early premium amount, as defined in the Certificate of Designation.

The following table lists the components of the liquidation preference for the periods presented below (in thousands):

As of December 31, 2023

As of December 31, 2024

On June 23, 2025, or the Redemption Date, APEI redeemed all 400 outstanding shares of Series A Senior Preferred Stock for $ 43.1 million, including an early redemption premium of $ 3.1 million, and excluding $ 1.4 million in accrued and unpaid dividends.

The loss on redemption of $ 3.5 million was calculated as the difference between the consideration paid, excluding dividends, and the book value of $ 39.6 million, and was recorded as a reduction to net income available to common stockholders in the accompanying Consolidated Statements of Income for the year ended December 31, 2025.

No shares of preferred stock were issued or outstanding at December 31, 2025.

On the Redemption Date, APEI also filed a Certificate of Elimination to its Fifth Amended and Restated Certificate of Incorporation, or the Charter, with the Secretary of State of the State of Delaware eliminating from the Charter all matters set forth in the Certificate of Designation with respect to the Series A Senior Preferred Stock.

Prior to the Redemption Date, the Series A Senior Preferred Stock had cumulative dividends that accrued daily at the annual rate which was equal to Term SOFR (selected by the Company for each divided period), plus 10.00 %, and dividends were paid, after declaration by the Company’s Board of Directors, for each dividend period.

During the years ended December 31, 2023, 2024, and 2025, $ 6.0 million, $ 6.1 million, and $ 2.8 million of dividends were declared and paid on the Series A Senior Preferred Stock dividends, respectively.

As of December 31, 2024, the liquidation preference of $ 47.0 million was based on the occurrence of a liquidation event, which was also considered an event of default as defined in the Certificate of Designation and included an early redemption premium amount and a make-whole payment for any redemption of the securities prior to June 30, 2025.

As of December 31, 2024, the make-whole payment included in the Liquidation Preference was $ 4.0 million, which was reduced quarterly.

The following table lists the components of the liquidation preference as of December 31, 2024 (in thousands):

Series A Senior Preferred Stock (plus accrued and unpaid dividends) 40,068

2 unchanged sentences

Liquidation Preference $ 46,976

The Series A Senior Preferred Stock has no voting rights for directors or otherwise, except as required by law or with respect to certain protective provisions.

However, holders of our Series A Senior Preferred Stock have certain consent rights that limit our ability to obtain debt or preferred stock financing or take certain other corporate actions.

Without the consent of at least 60 % of the then outstanding shares of Series A Senior Preferred Stock, with certain exceptions, the Company may not, among other things, (i) incur any indebtedness if such incurrence would cause the Company’s Total Net Leverage Ratio (as defined in the Purchase Agreement) to exceed 0.75 to 1.00, (ii) issue any capital stock senior to or pari passu with the Series A Senior Preferred Stock, (iii) declare or pay any cash dividends on the Company’s common stock, or (iv) repurchase more than an aggregate of $ 30 million of the Company’s common stock.

The Series A Senior Preferred Stock had no voting rights for directors or otherwise, except as required by law or with respect to certain protective provisions.

Without the consent of at least 60 % of the then outstanding shares of Series A Senior Preferred Stock, with certain exceptions, the Company could not, among other things, (i) incur any indebtedness if such incurrence would cause the Company’s Total Net Leverage Ratio (as defined in the Purchase Agreement) to exceed 0.75 :1, (ii) issue any capital stock senior to or pari passu with the Series A Senior Preferred Stock, (iii) declare or pay any cash dividends on the Company’s common stock, or (iv) repurchase more than an aggregate of $ 30 million of the Company’s common stock .

Contingencies

5 unchanged sentences

Students utilize various payment sources and programs to finance their education expenses, including funds from:

Department of Defense, or DoD, TA programs, education benefit programs administered by the U.S.

Department of Veteran’s Affairs, or VA, and federal student aid from Title IV programs, as well as cash and other sources.

TA programs, VA education benefit programs, and federal student aid from Title IV programs, as well as cash and other sources.

As of December 31, 2025, approximately 62 % of APUS students self-reported that they served in the military on active duty at the time of initial enrollment.

21 unchanged sentences

Segment Information

The Company’s Chief Executive Officer, as the CODM, organizes the company, manages resource allocations, and measures performance among three operating and reportable segments:

Corporate and Other includes GSUSA revenue and expenses, and unallocated corporate activity and eliminations to reconcile segment results to the Consolidated Financial Statements.

GSUSA does not meet the quantitative thresholds to qualify as a reportable segment.

The Company’s Chief Executive Officer, as the chief operating decision maker, or the CODM, organizes the company, manages resource allocations, and measures performance among three operating and reportable segments:

APUS, RU, and HCN.

Corporate and Other includes unallocated corporate activity and eliminations to reconcile segment results to the Consolidated Financial Statements, and, prior to the GSUSA Sale Date, GSUSA revenue and expenses.

GSUSA did not meet the quantitative thresholds to qualify as a reportable segment.

The CODM reviews information about each reportable segment’s revenue and categorized expenses, and allocates resources to, and measures the performance of, each reportable segment using reportable segment operating income (loss).

3 unchanged sentences

2023 2024 2025

(In thousands)

Revenue 303,303 317,049 319,842

9 unchanged sentences

84,828 15,606 8,849

Loss from operations before interest and income taxes ( 166,557 ) ( 103,575 ) ( 21,798 )

(Loss) income from operations before interest and income taxes ( 103,575 ) ( 21,798 ) 4,040

Revenue 56,936 67,290 74,983

20 unchanged sentences

(3) Includes loss on disposal of long lived assets and depreciation and amortization expense.

(4) Includes loss on disposal of long lived assets and depreciation and amortization expense.

(4) Includes loss on sale of subsidiary, loss on disposal of long lived assets, and depreciation and amortization expense.

Year Ended December 31,

2023 2024 2025

(In thousands)

Depreciation and amortization

19 unchanged sentences

Total consolidated income tax (benefit) expense ( 10,715 ) 10,419 12,148

Subsequent Events

2026 Credit Agreement

On March 9, 2026, the Company entered into a Credit Agreement with PNC Bank, National Association, as administrative agent and a syndicate of lenders, or the 2026 Credit Agreement.

The 2026 Credit Agreement provides for (i) a $ 90.0 million senior secured term loan, or the 2026 Term Loan, and (ii) a senior secured revolving credit facility in an aggregate principal amount of up to $ 40.0 million, or the 2026 Revolving Credit Facility and, together with the 2026 Term Loan, the 2026 Facilities.

The 2026 Facilities are scheduled to mature on March 9, 2031, and borrowings thereunder are subject to a revolver commitment fee ranging from 0.20 % to 0.35 % and bear interest at a rate (subject to increase during an event of default) of SOFR plus a margin ranging from 1.75 % to 2.75 %, each, depending on the Company’s Consolidated Total Net Leverage Ratio.

The Revolving Credit Facility replaces the Company’s existing $ 20.0 million senior secured revolving credit facility and the proceeds of the 2026 Term Loan, together with cash on hand, were used to repay the approximately $ 96.4 million principal amount outstanding under the Company’s existing term loan.

Combination of APUS, RU, and HCN

On March 2, 2026, the Company completed the merger of the legal entities that own and operate APUS, RU, and HCN, with the APUS entity surviving the merger, and subsequently notified ED that the merger occurred and resulted in RU and HCN being directly owned by the same legal entity that directly owns APUS.

The Company currently expects to complete implementation of step two of the Combination in the third quarter of 2026.

Quarterly Financial Summary (unaudited)

2 unchanged sentences

Historical results are not necessarily indicative of the results of operations to be expected for future periods.

The following tables set forth selected unaudited quarterly financial information for each of the Company’s last eight quarters:

following tables set forth selected unaudited quarterly financial information for each of the Company’s last eight quarters (in thousands, except per share data):

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

(in thousands, except per share data)

Revenue $ 154,432 $ 152,895 $ 153,122 $ 164,110

Income (loss) from operations before income taxes ( 7,149 ) ( 66,365 ) 5,608 15,141

Income from operations before income taxes 5,056 1,435 3,498 20,950

Net income (loss) available to common stockholders ( 1,019 ) ( 1,160 ) 731 11,505

3 unchanged sentences

Revenue $ 164,551 $ 162,766 $ 163,215 $ 158,330

Income (loss) from operations before income taxes 5,056 1,435 3,498 20,950

Income from operations before income taxes 11,359 5,917 8,628 17,801

Net income (loss) available to common stockholders 7,461 ( 324 ) 5,560 12,608

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 8. Financial Statements and Supplementary Data