Covista (CVSA) risk factors, FY2026 10-K

Risks Related to Covista’s Regulated Industry

1. 01We are subject to regulatory audits, investigations, lawsuits, or other proceedings relating to compliance by the institutions in the Covista portfolio with numerous laws and regulations in 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 or more restrictive 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 securities21% rewritten
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 payments55% rewritten
7. 07Our ability to comply with some ED regulations is affected by economic forces affecting our students and graduates that are not entirely within our control33% rewritten
8. 08Recent changes to federal student loan programs that reduce annual, aggregate, and lifetime borrowing limits and limit federal student aid for part-time students may limit students’ ability to finance their education, which may in turn materially and adversely affect our results of operationsNew
9. 09may choose not to enroll, delay enrollment, enroll part-time, select shorter or lower-cost programs, or discontinue their studies before completion. Other students may choose to enroll full-time to avoid part-time Title IV limitsNew
10. 10ED 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
11. 11A failure to demonstrate financial responsibility or administrative capability may result in the loss of eligibility, or the imposition of conditions, including provisional certification, to participate in Title IV programs
12. 12If 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
13. 13A 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 programs38% rewritten
14. 14Excessive student loan defaults could result in the loss of eligibility to participate in Title IV programs
15. 15Our 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 was too high
16. 16If we fail to maintain any of our state authorizations, we would lose our ability to operate in that state and could lose eligibility to participate in Title IV programs in that state75% rewritten
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 or meet our requirements could subject us to fines or restrictions on or loss of our ability to participate in Title IV programs or otherwise damage our business
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 Covista’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, political disruptions, armed conflicts or wars may interrupt our operations, 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 results88% rewritten
17. 38Changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results92% rewritten
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 uncertainties26% rewritten
19. 40We 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
20. 41Our 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 operations43% rewritten
21. 42Increased use of artificial intelligence (“AI”) in our programs and processes or by others may subject us to increased business, compliance, and legal riskNew
22. 43Other postsecondary institutions may more successfully and quickly integrate AI as a means to facilitate business growth, reduce operating expenses, and improve the student experience, which may result in a material adverse effect on our business or operationsNew