Covista (CVSA) risk factors, FY2025 10-K

Risks Related to Adtalem’s Regulated Industry

1. 01We are subject to regulatory audits, investigations, lawsuits, or other proceedings relating to compliance by the institutions in the Adtalem portfolio with numerous laws and regulations in the U.S. and foreign jurisdictions applicable to the postsecondary education industry
2. 02The ongoing regulatory effort aimed at all Title IV participating institutions could be a catalyst for additional legislative or regulatory restrictions, investigations, enforcement actions, and claims
3. 03Adverse publicity arising from investigations, claims, or actions brought against us or other proprietary higher education institutions may negatively affect our reputation, business, or stock price, or attract additional investigations, lawsuits, or regulatory action
4. 04Within Title IV regulations, pending or future lawsuits, investigations, program reviews, and other events could each trigger, automatically or in some cases at ED’s discretion, the posting of letters of credit or other securities
5. 05To participate in Title IV programs, an institution must receive and maintain authorization by the appropriate state education agencies, be accredited by an accrediting agency recognized by ED, and be certified by ED as an eligible institution, which ultimately is accomplished through the execution of a PPA
6. 06Government budgetary pressures and changes to laws governing financial aid programs could reduce our student enrollment or delay our receipt of tuition payments
7. 07We are currently analyzing the changes made by OBBBA and what effect they may have on Adtalem
8. 08Our ability to comply with some ED regulations is affected by economic forces affecting our students and graduates that are not entirely within our control
9. 09ED rules prohibiting “substantial misrepresentation” create exposure to litigation arising from student and prospective student complaints and enforcement actions by ED that could restrict or eliminate our eligibility to participate in Title IV programs
10. 10A failure to demonstrate financial responsibility or administrative capability may result in the loss of eligibility to participate in Title IV programs
11. 11If we fail to maintain our institutional accreditation or if our institutional accrediting body loses recognition by ED, we would lose our ability to participate in Title IV programs
12. 12A bankruptcy filing by us or by any of our Title IV institutions, or a closure of one of our Title IV institutions, would lead to an immediate loss of eligibility to participate in Title IV programs
13. 13Excessive student loan defaults could result in the loss of eligibility to participate in Title IV programs
14. 14Our Title IV institutions could lose their eligibility to participate in federal student financial aid programs if the percentage of their revenue derived from those programs were too high
15. 15If we fail to maintain any of our state authorizations, we would lose our ability to operate in that state and to participate in Title IV programs in that state
16. 16in one or more states, it could have a material adverse impact on our enrollment, revenue, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate
17. 17Budget constraints in states that provide state financial aid to our students could reduce the amount of such financial aid that is available to our students, which could reduce our enrollment and adversely affect our 90/10 Rule percentage
18. 18We could be subject to sanctions if we fail to calculate accurately and make timely payment of refunds of Title IV program funds for students who withdraw before completing their educational program
19. 19A failure of our vendors to comply with applicable regulations in the servicing of our students and institutions could subject us to fines or restrictions on or loss of our ability to participate in Title IV programs
20. 20Release of confidential information could subject us to civil penalties or cause us to lose our eligibility to participate in Title IV programs
21. 21We could be subject to sanctions if we fail to accurately and timely report sponsored students’ tuition, fees, and enrollment to the sponsoring agency

Risks Related to Adtalem’s Business

1. 22Student enrollment at our schools is affected by legislative, regulatory, and economic factors that may change in ways we cannot predict. These factors outside our control limit our ability to assess our future enrollment effectively
2. 23We are subject to risks relating to enrollment of students. If we are not able to continue to successfully recruit and retain our students, our revenue may decline
3. 24If our graduates are unable to find appropriate employment opportunities or obtain professional licensure or certification, we may not be able to recruit new students
4. 25We face heightened competition in the postsecondary education market from both public and private educational institutions
5. 26Outbreaks of communicable infections or diseases, or other public health pandemics in the locations in which we, our students, faculty, and employees live, work, and attend classes, could substantially harm our business
6. 27Natural disasters or other extraordinary events or political disruptions may cause us to close some of our schools or suffer casualty losses
7. 28The personal information that we collect may be vulnerable to breach, theft, or loss that could adversely affect our reputation and operations
8. 29to third parties inadvertently when we integrate or convert computer networks into our network following an acquisition or in connection with system upgrades from time to time
9. 30System disruptions and vulnerability from security risks to our computer network or information systems could severely impact our ability to serve our existing students and attract new students
10. 31A breach of our information technology systems could subject us to liability, reputational damage, or interrupt the operation of our business
11. 32Government regulations relating to the internet could increase our cost of doing business and affect our ability to grow
12. 33Our ability to open new campuses, offer new programs, and add capacity is dependent on regulatory approvals and requires financial and human resources
13. 34We may not be able to attract, retain, and develop key employees necessary for our operations and the successful execution of our strategic plans
14. 35We may not be able to successfully integrate acquisitions
15. 36Expansion into new international markets will subject us to risks inherent in international operations
16. 37Changes in tax laws or exposure to additional income tax liabilities may have a negative impact on our financial results
17. 38Changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results
18. 39Our goodwill and intangible assets potentially could be impaired if our business results and financial condition were materially and adversely impacted by risks and uncertainties
19. 40We cannot guarantee that our share repurchase program will be utilized to the full value approved or that it will enhance long-term stockholder value. Repurchases we consummate could increase the volatility of the price of our common stock and could have a negative impact on our available cash balance
20. 41We and our subsidiaries may not be able to generate sufficient cash to service all of our indebtedness and may not be able to refinance our debt obligations
21. 42Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations