CVSA

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How CVSA rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026

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106

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+383

words, now 10,460

New in FY2026

Risk Factors Covista’s business operations are subject to numerous risks and uncertainties, some of which are not entirely within our control.
Investors should carefully consider the risk factors described below and all other information contained in this Annual Report on Form 10-K before making an investment decision with respect to Covista’s common stock.
If any of the following risks are realized, Covista’s business, results of operations, financial condition, and cash flows could be materially and adversely affected, and as a result, the price of Covista’s common stock could be materially and adversely affected.
Risks and uncertainties that may affect Covista’s business include the following: Risks Related to Covista’s Regulated Industry We 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.
If the results of any such claims, actions, or allegations thereof are unfavorable to us or one or more of our institutions, we may be required to pay monetary judgments, fines, or penalties, be required to repay funds received under Title IV programs or state financial aid programs, have restrictions placed on or terminate our schools’ or programs’ eligibility to participate in Title IV programs or state financial aid programs, have limitations placed on or terminate our schools’ operations or ability to grant degrees and certificates, have our schools’ accreditations restricted or revoked, or be subject to civil or criminal penalties.
As a result, even though Covista’s Title IV institutions are operated through independent entities, an enforcement action against one of our institutions could also have a material adverse effect on the businesses, financial condition, results of operations, and cash flows of Covista’s other Title IV institutions.
The 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.
ED has issued regulations setting forth standards and procedures related to Borrower Defense to Repayment of Title IV loan obligations and ED’s right of recoveries against institutions following a successful borrower defense and institutional financial responsibility.
It is possible that a finding, allegation, or assertion arising from current or future legal proceedings or governmental administrative actions may create significant liability under the applicable Borrower Defense to Repayment regulations.
Although OBBBA delayed implementation of the 2023 Borrower Defense to Repayment regulations until July 1, 2035, the 2020 regulations have been restored and the outcome of any legal proceeding instituted by a private party or governmental authority, facts asserted in pending or future lawsuits, and/or the outcome of any future governmental inquiry, lawsuit, or enforcement action (including matters described in Note 18 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8.
“Financial Statements and Supplementary Data”) could form the basis for claims by students or ED under the Borrower Defense to Repayment regulations, the posting of substantial letters of credit, liability to ED for recoupment of forgiven federal student loans, or the termination of eligibility of our institutions to participate in the Title IV program based on ED’s institutional administrative capability assessment, any of which could, individually or in the aggregate, have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
We may settle certain matters due to uncertainty in potential outcome, for strategic reasons, as a part of a resolution of other matters, or to avoid potentially worse consequences in inherently uncertain judicial or administrative processes.
Additionally, although inconsistent with its usual practices, ED and other regulatory and accrediting bodies possess broad discretion to impose significant limitations on us and our business operations arising from acts it determines are in violation of their regulations or standards.
Such discretion may be exercised based on facts, allegations, or patterns of conduct, even in the absence of final adjudicated findings.
ED could require Covista to post multiple and substantial letters of credit or other securities in connection with, among other things, certain pending and future claims, investigations, and program reviews, in certain circumstances, regardless of the merits of our actions or available defenses, or, potentially, the severity of any findings or facts stipulated.
Covista’s credit agreement allows Covista to post up to $500.0 million in letters of credit.
In the event Covista is required to post letters of credit in excess of the $500.0 million limit, Covista would be required to seek an amendment to its credit agreement or seek an alternative means of providing security required by ED.
Covista may not be able to obtain the excess letters of credit or security or may only be able to obtain such excess letters of credit or security at significant cost.
In particular, the HEA subjects schools that participate in the various federal student financial aid programs under Title IV, which includes all Covista Title IV institutions, to significant regulatory scrutiny.
Covista’s Title IV institutions collectively receive 78% of their revenue from Title IV programs.
Alleged violations of such laws or regulations may form the basis of civil actions for violation of state and/or federal false claims statutes predicated on violations of a PPA, including pursuant to lawsuits brought by private plaintiffs on behalf of governments (qui tam actions), that have the potential to generate very significant damages linked to our receipt of Title IV funding from the government over a period of multiple years.
Our Title IV institutions collectively receive 78% of their revenue from Federal education assistance funds.
As a result, any reductions in funds available to our students or any delays in payments to us under Title IV and other Federal programs could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
Congress to revise the laws governing the federal student financial aid programs or reduce funding for those programs could reduce Covista’s student enrollment and/or increase its costs of operation.
Congress can change the laws affecting Title IV programs in annual federal appropriations bills and other laws it enacts between the HEA reauthorizations, as it did in the recent OBBBA.
We are continuing to evaluate and implement the changes made by OBBBA and the effect those changes may have on Covista.
At this time, Covista cannot predict what additional changes, if any, the U.S.
Congress that reduces Title IV program funding or the ability of Covista’s degree-granting institutions or students to participate in Title IV programs could have a material adverse effect on Covista’s business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
In particular, our ability to participate in federal Title IV programs is partially dependent on other factors including the ability of our past students to avoid default on student loans, obtain sufficiently remunerative employment, and of our future students to pay for a portion of their education with private funds.
According to ED, the default rate for all Title IV institutions nationally was 0.0% for the fiscal year 2022 cohort, 0.0% for the fiscal year 2021 cohort, and 0.0% for the fiscal year 2020 cohort.
“Business.” We are continuing to evaluate the potential impact of the Do No Harm provisions and ED’s regulations on Covista’s programs.
Recent 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 operations.
There have been recent changes to federal student loan programs under the HEA, including the imposition of new annual, aggregate, and lifetime borrowing limits across multiple loan programs, eliminating or restricting certain loan options previously available to graduate and professional students such as Grad PLUS, and limiting federal student aid for part-time students.
Many of these changes took effect July 1, 2026, with certain provisions applying prospectively to new borrowers, subject to further implementation through ED regulations and guidance.
These changes may materially reduce the amount of loan funding available to students.
Students who are unable to access sufficient federal loan funds may be required to rely more heavily on personal savings, private loans, or other sources of financing, which may be unavailable, more expensive, or less predictable.
As a result, some prospective students may 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 limits.
Any sustained reduction in students’ ability or willingness to finance their education through federal loan programs could materially reduce student enrollments, persistence, and completion rates, and adversely affect our revenue, operating results, and growth prospects.
We are informing prospective students about private financing alternatives available in the market.

and 66 more.

Gone since FY2025

Risk Factors Adtalem’s business operations are subject to numerous risks and uncertainties, some of which are not entirely within our control.
Investors should carefully consider the risk factors described below and all other information contained in this Annual Report on Form 10-K before making an investment decision with respect to Adtalem’s common stock.
If any of the following risks are realized, Adtalem’s business, results of operations, financial condition, and cash flows could be materially and adversely affected, and as a result, the price of Adtalem’s common stock could be materially and adversely affected.
Risks and uncertainties that may affect Adtalem’s business include the following: Risks Related to Adtalem’s Regulated Industry We 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.
If the results of any such claims or actions are unfavorable to us or one or more of our institutions, we may be required to pay monetary judgments, fines, or penalties, be required to repay funds received under Title IV programs or state financial aid programs, have restrictions placed on or terminate our schools’ or programs’ eligibility to participate in Title IV programs or state financial aid programs, have limitations placed on or terminate our schools’ operations or ability to grant degrees and certificates, have our schools’ accreditations restricted or revoked, or be subject to civil or criminal penalties.
As a result, even though Adtalem’s Title IV institutions are operated through independent entities, an enforcement action against one of our institutions could also have a material adverse effect on the businesses, financial condition, results of operations, and cash flows of Adtalem’s other Title IV institutions.
The 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.
ED has issued regulations setting forth new standards and procedures related to Borrower Defense to Repayment of Title IV loan obligations, and ED’s right of recoveries against institutions following a successful borrower defense and institutional financial responsibility.
It is possible that a finding or allegation arising from current or future legal proceedings or governmental administrative actions may create significant liability under the proposed regulations.
Although OBBBA blocked implementation of the 2023 Borrower Defense to Repayment regulations until 2035, the 2020 regulations have been restored and the outcome of any legal proceeding instituted by a private party or governmental authority, facts asserted in pending or future lawsuits, and/or the outcome of any future governmental inquiry, lawsuit, or enforcement action (including matters described in Note 18 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8.
“Financial Statements and Supplementary Data”) could serve as the basis for claims by students or ED under the Borrower Defense to Repayment regulations, the posting of substantial letters of credit, or the termination of eligibility of our institutions to participate in the Title IV program based on ED’s institutional capability assessment, any of which could, individually or in the aggregate, have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
We may settle certain matters due to uncertainty in potential outcome, for strategic reasons, as a part of a resolution of other matters, or in order to avoid potentially worse consequences in inherently uncertain judicial or administrative processes.
Additionally, although inconsistent with its usual practices, ED and other regulatory and accrediting bodies have broad discretion to impose significant limitations on us and our business operations arising from acts it determines are in violation of their regulations or standards.
ED regulations could require Adtalem to post multiple and substantial letters of credit or other securities in connection with, among other things, certain pending and future claims, investigations, and program reviews, regardless of the merits of our actions or available defenses, or, potentially, the severity of any findings or facts stipulated.
Adtalem’s credit agreement allows Adtalem to post up to $500.0 million in letters of credit.
In the event Adtalem is required to post letters of credit in excess of the $500.0 million limit, Adtalem would be required to seek an amendment to its credit agreement or seek an alternative means of providing security required by ED.
Adtalem may not be able to obtain the excess letters of credit or security or may only be able to obtain such excess letters of credit or security at significant cost.
In particular, the HEA subjects schools that participate in the various federal student financial aid programs under Title IV, which includes all Adtalem Title IV institutions, to significant regulatory scrutiny.
Adtalem’s Title IV institutions collectively receive 77% of their revenue from Title IV programs.
Alleged violations of such laws or regulations may form the basis of civil actions for violation of state and/or federal false claims statutes predicated on violations of a PPA, including pursuant to lawsuits brought by private plaintiffs on behalf of governments (qui tam actions), that have the potential to generate very significant damages linked to our receipt of Title IV funding from the government over a period of several years.
Our Title IV institutions collectively receive 77% of their revenue from Title IV programs.
As a result, any reductions in funds available to our students or any delays in payments to us under Title IV programs could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
Congress to revise the laws governing the federal student financial aid programs or reduce funding for those programs could reduce Adtalem’s student enrollment and/or increase its costs of operation.
Congress can change the laws affecting Title IV programs in annual federal appropriations bills and other laws it enacts between the HEA reauthorizations, as it did in the recent OBBBA, as discussed in detail in Item 7.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We are currently analyzing the changes made by OBBBA and what effect they may have on Adtalem.
At this time, Adtalem cannot predict what additional changes the U.S.
Since a significant percentage of Adtalem’s revenue is tied to Title IV programs, any action by the U.S.
Congress that significantly reduces Title IV program funding or the ability of Adtalem’s degree-granting institutions or students to participate in Title IV programs could have a material adverse effect on Adtalem’s business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
In particular, our ability to participate in federal Title IV programs is dependent on the ability of our past students to avoid default on student loans, obtain sufficiently remunerative employment, and of our future students to pay for a portion of their education with private funds.
According to ED, the default rate for all Title IV institutions nationally was 0.0% for the fiscal year 2021 cohort, 0.0% for the fiscal year 2020 cohort, and 2.3% for the fiscal year 2019 cohort.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We are currently evaluating whether Do No Harm will impact any Adtalem programs.
ED regulations in effect for federal Stafford loans prohibit any “substantial misrepresentation” by our Title IV institutions, employees, and agents regarding the nature of the institution’s educational programs, its financial charges, or the employability of its graduates.
It is possible that despite our efforts to prevent misrepresentations, our employees or service providers may make statements that could be construed as substantial misrepresentations.
A failure to demonstrate financial responsibility or administrative capability may result in the loss of eligibility to participate in Title IV programs.
There can be no assurance that ED will recertify an institution after its PPA expires or that ED will not limit the period of recertification to participate in Title IV programs to less than six years, place the institution on provisional certification, or impose conditions or other restrictions on the institution as a condition of granting our application for recertification.
Alternatively, ED could (1) renew the certifications for an institution, but restrict or delay receipt of Title IV funds, limit the number of students to whom an institution could disburse such funds, or place other restrictions on that institution, or (2) delay recertification after an institution’s PPA expires, in which case the institution’s certification would continue on a month-to-month basis, any of which could have a material adverse effect on the businesses, financial condition, results of operations, and cash flows of the institution or Adtalem as a whole and could result in the imposition of significant restrictions on the ability of the institution or Adtalem as a whole to operate.
If regulators do not approve, or delay their approval, of transactions involving a material change of ownership or change of control of Adtalem, the eligibility of our institutions to participate in Title IV programs, our institutions’ accreditations and our institutions’ state licenses may be impaired in a manner that materially and adversely affects our business.
Any material change of ownership or change of control of Adtalem, depending on the type of change, may have significant regulatory consequences for each of our Title IV institutions.
If Adtalem experiences a material change of ownership or change of control, then our Title IV institutions may cease to be eligible to participate in Title IV programs until recertified by ED.
In the event of a bankruptcy filing by Adtalem, all of our Title IV institutions would lose their eligibility to participate in Title IV programs, pursuant to statutory provisions of the HEA, notwithstanding the automatic stay provisions of federal bankruptcy law, which would make any reorganization difficult to implement.

and 54 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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