Covista Inc. (NYSE: CVSA) details 78% Title IV reliance and regulatory risks
Rhea-AI Filing Summary
Covista Inc., a Delaware corporation based in Chicago, operates as America’s largest healthcare educator, serving 100,000 students and an alumni network of 400,000 across five accredited institutions: Chamberlain, Walden, AUC, RUSM, and RUSVM. It reports three segments: Chamberlain, Walden, and Medical and Veterinary.
The model relies heavily on U.S. federal student aid; Covista’s Title IV institutions collectively receive 78% of revenue from Title IV programs and are subject to extensive regulation under the HEA, OBBBA, and related ED rules, including Do No Harm and Gainful Employment frameworks. A fiscal 2022 composite financial-responsibility score of 0.2 led to provisional certification, heightened cash monitoring, and $202.6 million in surety-backed letters of credit, plus $80.0 million of state surety bonds.
As of December 31, 2025, non‑affiliate equity market value was $3,488,231,961, and as of July 31, 2026, shares outstanding were 34,038,82078% in 2025, and cohort default rates for all institutions were 0.0% for the 2020–2022 cohorts. Covista employs 10,680 people worldwide and details extensive regulatory, financial-aid, and litigation-related risk factors that could materially affect operations.
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Key Figures
Key Terms
Title IV programs regulatory
90/10 Rule regulatory
Borrower Defense to Repayment regulatory
Gainful Employment regulatory
Program Participation Agreement regulatory
Do No Harm regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One) | |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended | |
or | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from _____to _____ | |
Commission File Number: | |
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
|
|
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number; including area code (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ◻
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
þ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
As of December 31, 2025, the aggregate market value of the registrant’s outstanding common equity held by non-affiliates was $
As of July 31, 2026, there were
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates information by reference to the registrant’s definitive proxy statement with respect to the 2026 annual meeting of shareholders (the “Proxy Statement”), to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year ended June 30, 2026.
Covista Inc.
Form 10-K
Table of Contents
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| Page |
PART I | ||
Item 1. | Business | 1 |
Item 1A. | Risk Factors | 14 |
Item 1B. | Unresolved Staff Comments | 28 |
Item 1C. | Cybersecurity | 29 |
Item 2. | Properties | 30 |
Item 3. | Legal Proceedings | 31 |
Item 4. | Mine Safety Disclosures | 31 |
Information About Our Executive Officers | 31 | |
PART II | ||
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 33 |
Item 6. | [Reserved] | 35 |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 35 |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 49 |
Item 8. | Financial Statements and Supplementary Data | 50 |
Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | 86 |
Item 9A. | Controls and Procedures | 86 |
Item 9B. | Other Information | 87 |
Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 87 |
PART III | ||
Item 10. | Directors, Executive Officers and Corporate Governance | 87 |
Item 11. | Executive Compensation | 88 |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 88 |
Item 13. | Certain Relationships and Related Transactions, and Director Independence | 88 |
Item 14. | Principal Accountant Fees and Services | 88 |
PART IV | ||
Item 15. | Exhibits and Financial Statement Schedules | 88 |
Item 16. | Form 10-K Summary | 91 |
Signatures | 92 |
Table of Contents
Cautionary Disclosure Regarding Forward-Looking Statements
Certain statements contained in this Annual Report on Form 10-K are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. In particular, information appearing under “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” includes forward-looking statements. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding Covista’s future growth. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “future,” “believe,” “project,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “potential,” “range,” and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those described in the statements. Important factors that could cause actual results to differ materially from the expectations expressed or implied by our forward-looking statements are disclosed in Item 1A. “Risk Factors,” and elsewhere in this document (including, without limitation, in conjunction with the forward-looking statements themselves and under the heading “Critical Accounting Estimates”), all of which should be read in conjunction with the forward-looking statements in this Annual Report on Form 10-K. You should evaluate forward-looking statements in the context of these risks and uncertainties and are cautioned to not place undue reliance on such forward-looking statements. We caution you that these factors may not contain all of the factors that are important to you. We cannot assure you that we will realize the results, performance or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. All forward-looking statements are based on information available to us as of the date any such statements are made, and Covista assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.
PART I
Item 1. Business
Overview
In this Annual Report on Form 10-K, Covista Inc. (formerly known as Adtalem Global Education Inc.), together with its subsidiaries, is collectively referred to as “Covista,” “we,” “our,” “us,” or similar references. Covista was incorporated under the laws of the State of Delaware in August 1987. Our executive offices are located at 233 South Wacker Drive, Chicago, Illinois, 60606, and the telephone number is (312) 651-1400.
Covista is America’s largest healthcare educator, serving 100,000 students and supported by an alumni network of 400,000 across five accredited institutions: Chamberlain University (“Chamberlain”), Walden University (“Walden”), American University of the Caribbean School of Medicine (“AUC”), Ross University School of Medicine (“RUSM”), and Ross University School of Veterinary Medicine (“RUSVM”). Covista delivers education to its students at multiple campuses and online.
Covista’s purpose is to open doors and unlock potential for its students through educational programs across nursing, medicine, veterinary medicine, the social and behavioral sciences, and more.
Covista’s strategy, which it refers to as “Purpose at Scale,” is centered on expanding access to healthcare education and helping address the U.S. healthcare workforce shortage. This strategy is built around four core principles: operational excellence, platform extension, employer integration, and technology focus.
Segments Overview
We present three reportable segments as follows:
Chamberlain – This segment includes the operations of Chamberlain, which offers degree and certificate programs in the nursing and health professions postsecondary education industry.
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Walden – This segment includes the operations of Walden, which offers degree and certificate programs, including those in nursing, education, counseling, business, information technology, psychology, public health, social work and human services, public administration and public policy, and criminal justice.
Medical and Veterinary – This segment includes the operations of AUC, RUSM, and RUSVM, collectively referred to as the “medical and veterinary schools,” which offer degree and certificate programs in the medical and veterinary postsecondary education industry.
Chamberlain
Chamberlain was founded in 1889 as Deaconess College of Nursing and acquired by Covista in 2005. In May 2017, Chamberlain College of Nursing broadened its reach in healthcare education through the establishment of Chamberlain University and now offers its programs through its College of Nursing and College of Health Professions.
Chamberlain’s nursing degree offerings include a three-year onsite and online pre-licensure Bachelor of Science in Nursing (“BSN”) degree, an online post-licensure BSN degree completion option for Registered Nurses (“RN-BSN”), an online Master of Science in Nursing (“MSN”) degree, including Nurse Practitioner tracks and other specialties, and the online Doctor of Nursing Practice (“DNP”) degree.
Through its College of Health Professions, Chamberlain offers an online Master of Public Health (“MPH”) degree program, an online Master of Social Work (“MSW”) degree program, and an onsite Master of Physician Assistant Studies (“MPAS”) degree program.
Chamberlain provides an educational experience distinguished by a high level of care for students, academic excellence, and integrity delivered through its 24 campuses and online. Chamberlain is committed to graduating health professionals who are empowered to transform healthcare delivery.
Chamberlain’s pre-licensure BSN program enables students to complete their degree in three years of full-time study as opposed to the typical four-year BSN program with summer breaks. Beginning in September 2019, Chamberlain began offering an evening/weekend BSN option at select campuses. In September 2020, Chamberlain launched its online BSN option that offers a blend of flexibility, interactivity, and experiential learning.
Students who already have passed their National Council Licensure Examination (“NCLEX”) exam and achieved RN designation through a diploma or associate degree can complete their BSN degree online through Chamberlain’s RN-BSN completion option in three semesters of full-time study, although most students enroll part-time while they continue working as nurses.
The online MSN degree program offers five non-direct-care specialty tracks: Nurse Educator, Nurse Executive, Nursing Informatics, Population Health, and Healthcare Policy. The accelerated MSN program offers concentrations in Clinical Nurse Leadership, Advanced Nursing Leadership, and Advanced Nursing Leadership with Artificial Intelligence. The accelerated RN-MSN program provides associate or diploma-prepared RNs the opportunity to earn an MSN, rather than a BSN, with the same concentration options available.
Chamberlain also offers four direct-care nurse practitioner tracks: Family Nurse Practitioner (“FNP”), Adult-Gerontology Acute Care Nurse Practitioner (“AGACNP”), Adult-Gerontology Primary Care Nurse Practitioner (“AGPCNP”), and Psychiatric-Mental Health Nurse Practitioner (“PMHNP”). The FNP, AGACNP, AGPCNP, and PMHNP programs are designed to be completed in two and a half years of part-time study.
The online DNP degree program is based on the eight essentials of doctoral education outlined by the American Association of Colleges of Nursing (“AACN”). The program can be completed in five to six semesters of study.
Chamberlain’s College of Health Professions MPH degree program focuses on preparing students through interdisciplinary coursework to become public health practitioners serving communities and populations to promote healthy communities and to work to address health problems and health-related issues such as disease, poverty, and violence. The MSW degree program prepares students for generalist or specialized practice and offers three tracks, including Crisis and Response Interventions, Trauma, and Medical Social Work. The program offers both a traditional and
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advanced standing option. The advanced standing option is for students who have completed a baccalaureate degree in social work. The MPAS degree program prepares students for the practice of general medicine as Physician Assistants in collaboration with a licensed physician and healthcare team and is designed to be completed in two years.
Student Admissions and Admissions Standards
Pre-Licensure BSN Program
Chamberlain’s undergraduate pre-licensure admission process requires applicants to meet academic eligibility criteria. Determining academic eligibility is the role of the Chamberlain BSN Unified Admission Committee. The committee reviews applicants using a weighted evaluation system that considers several factors which may include previous coursework, grade point average, ACT/SAT scores, Health Education Systems, Inc. (“HESI”) Admission Assessment (A2) scores, and Assessment Technologies Institute, Test of Essential Academic Skills (“TEAS”). As part of the clinical clearance phase, applicants must clear drug, background, and fingerprint screenings prior to enrolling in a clinical course. Chamberlain enrolls students in its pre-licensure program at most campuses and its BSN online option six times per year, during the January, March, May, July, September, and November sessions. Select campuses enroll pre-licensure students three times per year, during the January, May, and September sessions.
RN-BSN Option
Admission to the RN-BSN option requires a nursing diploma or Associate Degree in Nursing from an accredited institution, a minimum grade point average of 2.0, and a current, active, unrestricted RN license in the U.S. or other jurisdiction that is an associate member of the National Council of State Boards of Nursing (“NCSBN”). Chamberlain enrolls students in its RN-BSN program six times per year, during the January, March, May, July, September, and November sessions.
Graduate Programs
To enroll in graduate programs, students must have the requisite undergraduate academic degree from an accredited institution and a specified minimum grade point average. Applicants to some programs are also required to provide additional materials and information such as recommendation letters or background checks and/or interview with and be approved by faculty.
Chamberlain enrolls students in its graduate nursing, MPH, and MSW programs six times per year, during the January, March, May, July, September, and November sessions. Chamberlain enrolls students in its graduate MPAS program once a year in the September session.
Walden
For more than 50 years, Walden has provided an engaging learning experience for working professionals. Walden seeks to empower students to use their new knowledge to think creatively about problem-solving to improve society.
Founded in 1970 and first accredited by the Higher Learning Commission (“HLC”) in 1990, Walden has a strong legacy of providing innovative and alternative degree programs for adult students. Walden has grown to support more than 100 degree and certificate programs—including programs at the bachelor’s, master’s, and doctoral levels—with over 350 specializations and concentrations.
In addition, Walden has rich experience in delivering innovative accelerated programs through distance delivery. Walden also has experience in delivering accelerated course-based programs where students can customize modalities to speed their time to completion and degree completion programs (for example, the RN-BSN). Walden offers more than 25 programs/specializations and one certificate in a direct assessment competency-based education format through its Tempo Learning® modality. Through a culture of assessment and continuous improvement, Walden has developed the organization and resources required to deliver a quality academic learning experience to working adults via distance delivery. Nearly all of Walden’s academic programs are delivered in an online format. Some programs include in-person components, such as clinicals.
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Walden’s colleges and programs are structured within two main divisions – the Division of Health Care Access and Quality and the Division of Social Support for Healthy Communities.
Walden believes this organizational structure supports its mission via a focused effort promoting healthy communities and healthy people, as identified through the U.S. Department of Health and Human Services’ Office of Disease Prevention and Health Promotion’s national effort in this area known as Healthy People 2030.
Student Admissions and Admissions Standards
Walden has a long-standing commitment to providing educational opportunities to learners across all degree levels. Walden’s programs are enriched by the cultural, economic, and educational backgrounds of its students and instructors. In the admissions process, Walden selects individuals who can benefit from a distributed educational or online learning approach and who will use their Walden education to contribute to their academic or professional communities.
For admissions review to take place, applicants must submit an online application for their intended program of study and an official transcript with a qualifying admitting degree from a U.S. school accredited by a regional, professional/specialized, or national accrediting organization recognized by the Council for Higher Education Accreditation or the U.S. Department of Education (“ED”), or from an appropriately accredited non-U.S. institution. Additional materials or requirements to submit may vary depending on the academic program.
All applicants to the bachelor’s program are required to have earned, at a minimum, a recognized high school diploma, high school equivalency certificate, or other state-recognized credential of high school completion. Applicants with degrees and coursework from a non-U.S. institution have their academic record evaluated for comparability to a U.S. degree or coursework by our Global Transcript Evaluation (“GTE”) service offered by Walden or any credential evaluation service that is a member of the National Association of Credential Evaluation Services (“NACES”) or member of Association of International Credential Evaluators (“AICE”).
Applicants may be offered conditional admission to Walden with a stipulation for academic performance at the level of a grade point average of 3.0 or higher for master’s and doctoral students or a grade point average of 2.0 or higher for undergraduate students, the successful completion of academic progress requirements during the initial term(s) of enrollment, the completion of prerequisites, and/or other stipulations (including receipt of official records).
Medical and Veterinary
AUC and RUSM
AUC, founded in 1978 and acquired by Covista in 2011, provides medical education and confers the Doctor of Medicine (“MD”) degree. AUC is located in St. Maarten with a satellite campus in Preston, England and has graduated over 9,000 physicians since inception. AUC expands access to medical careers by empowering aspiring physicians to reach their full potential and preparing them to serve globally with excellence, compassion, and social accountability.
RUSM, founded in 1978 and acquired by Covista in 2003, provides medical education and confers the Doctor of Medicine (“MD”) degree. RUSM is located in Barbados and has graduated over 17,000 physicians since inception. Grounded in access, rigor, and impact, RUSM develops resilient, clinically excellent, compassionate physicians prepared for residency and for service in an evolving healthcare landscape.
AUC’s and RUSM’s programs consist of three academic semesters per year, which begin in January, May, and September, allowing students to begin their basic science instruction at the most convenient time for them.
The AUC and RUSM MD degree programs have two distinct elements of study, medical sciences and clinical sciences. To start the MD program, students complete concentrated study of medical sciences after which eligible students sit for U.S. Medical Licensing Examination (“USMLE”), Step 1, which assesses whether students understand and can apply scientific concepts that are basic to the practice of medicine. Under AUC and RUSM direction, students then complete the remainder of their program by participating in clinical rotations (clinical sciences) that leverage more than 40 clinical relationships linked to accredited graduate medical education programs in the U.S., Canada, and the U.K. Towards the end of the clinical training and prior to graduation, AUC and RUSM students take USMLE, Step 2 CK (Clinical Knowledge),
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which assesses ability to apply medical knowledge, skills, and understanding of clinical science essential for the provision of patient care under supervision and includes emphasis on health promotion and disease prevention. AUC and RUSM students use the Educational Commission for Foreign Medical Graduates (“ECFMG”) pathways to enter the U.S. residency match.
Upon successful completion of their medical degree requirements, students apply for a residency position in their area of specialty through the National Residency Matching Program (“NRMP”). This process is also known as “The Match”® and utilizes an algorithm to “match” applicants to programs using the certified rank order lists of the applicants and program directors.
Of first-time eligible AUC graduates, 95% and 98% attained residency positions in 2025 and 2026, respectively.
Of first-time eligible RUSM graduates, 96% and 96% attained residency positions in 2025 and 2026, respectively.
In September 2019, AUC opened its medical education program in the U.K. through a satellite campus in partnership with the University of Lancashire. The program offers students a Post Graduate Diploma in International Medical Sciences from the University of Lancashire, followed by their Doctor of Medicine degree from AUC. Students are eligible to do clinical rotations via AUC’s clinical relationships, which include hospitals in the U.S., Canada, and the U.K. This program is aimed at preparing students for USMLEs.
AUC and RUSM offer additional pathways into the MD program through two distinct preparatory programs, MedOrigin and Medical Education Readiness Program (“MERP”).
MedOrigin is a 15-week hands-on and immersive on-campus graduate-level medical preparatory program that strategically integrates core medical concepts with proven study techniques, allowing foundational knowledge mastery providing AUC and RUSM students skills they need to be successful in medical school and to achieve their goals of becoming physicians. Upon successful completion of the MedOrigin program, students are guaranteed admission to AUC or RUSM.
MERP is a 15-week virtual medical school preparatory program similar to MedOrigin, though delivered virtually via digital learning. MERP also focuses on enhancing the academic foundation of prospective AUC and RUSM students and providing them with the skills they need to be successful in medical school and to achieve their goals of becoming physicians. Upon successful completion of the MERP program, students are guaranteed admission to AUC or RUSM.
RUSVM
RUSVM, founded in 1982 and acquired by Covista in 2003, provides veterinary education and confers the Doctor of Veterinary Medicine, as well as Masters of Science and Ph.D. degrees. RUSVM is located in St. Kitts and has graduated over 7,500 veterinarians since inception. The mission of RUSVM is to provide an excellent veterinary medical education for qualified students from many different backgrounds. RUSVM cultivates resilient, accountable veterinarians prepared to practice with integrity, clinical excellence, and compassion for the animals and communities they serve.
The RUSVM program is structured to provide a veterinary education that is comparable to educational programs at U.S. veterinary schools. RUSVM students complete a seven-semester, pre-clinical curriculum at the campus in St. Kitts. After completing their pre-clinical curriculum, RUSVM students enter a clinical clerkship under RUSVM direction lasting approximately 45 weeks at clinical affiliates located in the U.S., Canada, Australia, Ireland, New Zealand, and the U.K.
RUSVM offers a one-semester Vet Prep Program designed to enhance the pre-clinical science knowledge and study skills that are critical to success in veterinary school.
Student Admissions and Admissions Standards
AUC, RUSM, and RUSVM employ regional admissions representatives in locations throughout the U.S. and Canada who provide information to students interested in their respective programs. A successful applicant must have completed the required prerequisite courses. U.S. applicants to AUC and RUSM are required to take the Medical College Admission Test (“MCAT”). RUSVM applicants can submit a Graduate Record Exam (“GRE”) score that will be considered as part
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of the application. Candidates for admission must interview with an admissions representative and all admission decisions are made by the admissions committees of the medical and veterinary schools.
Market Trends and Competition
Chamberlain
Chamberlain competes in the U.S. nursing education market, which has more than 2,000 programs leading to RN licensure. These include four-year educational institutions, two-year community colleges, and less-than-2-year schools. The market consists of two distinct segments: pre-licensure nursing programs that prepare students to take the NCLEX-RN licensure exam and post-licensure nursing programs that allow existing RNs to advance their education.
In the pre-licensure nursing market, capacity limitations and restricted new student enrollment are common among traditional four-year educational institutions and community colleges. Chamberlain has 24 campuses located in 16 states and an online BSN program offered in 38 states. In Fall 2025, according to data obtained from the American Association of Colleges of Nursing (“AACN”), Chamberlain had the largest pre-licensure program in the U.S. based on total enrollments.
In post-licensure nursing education, there are more than 700 institutions offering RN-BSN programs and more than 600 institutions offering MSN programs. Chamberlain’s RN-BSN degree completion option has received three certifications from Quality Matters, an independent global organization leading quality assurance in online teaching and learning environments. Chamberlain has earned the Online Learning Support, Online Teaching Support, and Online Learner Success certifications.
In Fall 2025, according to AACN data, Chamberlain had the largest BSN and MSN programs in the U.S based on total enrollments.
Walden
The market for fully online higher education, in which Walden competes, remains a competitive and growing space. As a comprehensive university offering degrees at the bachelor’s, master’s and doctoral level, in addition to certificates and a school of lifelong learning, the competition varies depending on the degree level and the discipline. While Walden’s target market of working professionals 25 years and older was once underserved, it now has a variety of options to meet the growing need for higher education.
Walden has degree programs in nursing, education, counseling, business, information technology, psychology, public health, social work and human services, public administration and public policy, and criminal justice. Walden competes both with other comprehensive universities and more narrowly focused schools, which may only offer a few degree programs. Given the growing and ever-changing market, Walden competes with a wide variety of higher education institutions as well as other education providers.
Walden competes with traditional public and private non-profit institutions and for-profit schools. As more campus-based institutions offer online programs, the competition for online higher education has been growing. Typically, public universities charge lower tuition compared with Walden due to state subsidies, government grants, and access to other financial resources. On the other hand, tuition at private non-profit institutions is higher than the average tuition rates at Walden. Walden competes with other educational institutions principally based on price, quality of education, reputation, learning modality, educational programs, and student services.
Walden has over 50 years of experience offering high quality distance education. Walden is one of the leading doctoral degree conferrers in nursing, public health, public policy, business/management, education, and psychology and one of the leading conferrers of master’s degrees in nursing, psychology, social work, human services, education, and counseling.
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Medical and Veterinary
AUC and RUSM compete with U.S. schools of medicine, U.S. colleges of osteopathic medicine, and Caribbean medical schools as well as with international medical schools recruiting U.S. students. RUSVM competes with U.S.-based and international AVMA accredited schools.
There has been some recent expansion in the U.S. medical education and veterinary education enrollment capacities because of the growing supply/demand imbalance for medical doctors and veterinarians. Despite this expansion, we believe the expanding imbalance will continue to spur demand for medical and veterinary education with prospective student and employer demand well outpacing supply of medical education and veterinary education market capacity.
Accreditation and Other Regulatory Approvals
Educational institutions and their individual programs are awarded accreditation by achieving a level of quality that entitles them to the confidence of the educational community and the public they serve. Accredited institutions are subject to periodic review by accrediting bodies to ensure continued high performance and institutional and program improvement and integrity, and to confirm that accreditation requirements continue to be satisfied.
Chamberlain
Chamberlain is institutionally accredited by the HLC, an institutional accreditation agency recognized by ED. In addition to institutional accreditation, Chamberlain has also obtained programmatic accreditation for specific programs. BSN, MSN, DNP, and post-graduate Advanced Practice Registered Nurses (“APRN”) certificate programs are accredited by the Commission on Collegiate Nursing Education (“CCNE”). The DNP program also holds continuing accreditation from the National League for Nursing Commission for Nursing Education Accreditations (“NLN CNEA”). Chamberlain’s MPH program is accredited by the Council on Education for Public Health (“CEPH”). Chamberlain’s MSW program is accredited by the Council on Social Work Education (“CSWE”)’s Commission on Accreditation. The Accreditation Review Commission on Education for the Physician Assistant (“ARC-PA”) has granted Accreditation-Provisional status to the Chicago and Phoenix MPAS programs. Accreditation-Provisional is an accreditation status granted when the plans and resource allocation, if fully implemented as planned, of a proposed program that has not yet enrolled students appear to demonstrate the program’s ability to meet the ARC-PA Standards or when a program holding Accreditation-Provisional status appears to demonstrate continued progress in complying with the Standards as it prepares for the graduation of the first class (cohort) of students. Accreditation-Provisional does not ensure any subsequent accreditation status. It is limited to no more than five years from matriculation of the first class. Additionally, Chamberlain is an accredited provider of nursing continuing professional development credits by the American Nurses Credentialing Center.
Walden
Walden is also institutionally accredited by the HLC. In addition to its institutional accreditation, a number of Walden’s programs have obtained programmatic accreditation. The BS in Information Technology program is accredited by the Accreditation Board for Engineering and Technology. A number of business programs (BS in Business Administration, Master of Business Administration, MS in Finance, Doctor of Business Administration, and Ph.D. in Management) are accredited by the Accreditation Council for Business Schools and Programs (“ACBSP”). The BS and MS in Accounting programs are accredited by ACBSP’s Separate Accounting Accreditation. The BSN, MSN, Post-Master’s APRN certificates, and DNP programs are accredited by CCNE. The MS in Addiction Counseling, MS in School Counseling, MS in Clinical Mental Health Counseling, MS in Marriage, Couple, and Family Counseling, and Ph.D. in Counselor Education and Supervision programs are accredited by the Council for Accreditation of Counseling and Related Education Programs. Walden’s initial teacher preparation programs, BS in Elementary Education and Master of Arts in Teaching with a specialization in Special Education, and advanced educator preparation programs, education specialist in Educational Leadership and Administration and MS in Education with a specialization in Educational Leadership and Administration, in the Richard W. Riley College of Education and Human Sciences are accredited by the Council for the Accreditation of Educator Preparation. The MPH and Doctor of Public Health programs are accredited by the CEPH. The Bachelor of Social Work and MSW programs are accredited by the CSWE. Additionally, Walden is an accredited provider of continuing education credits by the American Nurses Credentialing Center.
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Medical and Veterinary
The Government of St. Maarten authorizes AUC to confer the Doctor of Medicine degree. AUC is accredited by the Accreditation Commission on Colleges of Medicine (“ACCM”). The ACCM is an international medical school accrediting organization for countries that do not have a national medical school accreditation body. The U.S. Department of Education National Committee on Foreign Medical Education and Accreditation (“NCFMEA”) has affirmed that the ACCM has established and enforces standards of educational accreditation that are comparable to those promulgated by the U.S. Liaison Committee on Medical Education (“LCME”). In addition, AUC is authorized to place students in clinical rotations in the majority of U.S. states, including California, Florida, and New York, where robust processes are in place to evaluate and approve an international medical school’s programs. AUC students can join residency training programs in all 50 states. AUC has also been deemed acceptable by the Graduate Medical Council (“GMC”), the accrediting body in the U.K., which allows AUC graduates to apply for residency programs in the U.K.
The Government of Barbados authorizes RUSM to confer the Doctor of Medicine degree through a registration process with the Barbados Accreditation Council. RUSM’s primary accreditor is Caribbean Accreditation Authority for Education in Medicine and other Health Professions (“CAAM-HP”). CAAM-HP is authorized to accredit medical programs by the government of Barbados. On July 26, 2018, Barbados authorized RUSM to confer the Doctor of Medicine degree. The NCFMEA has affirmed that CAAM-HP has established and enforces standards of educational accreditation that are comparable to those promulgated by the LCME. In addition, RUSM is authorized to place students in clinical rotations in the majority of U.S. states, including California, Florida, New Jersey, and New York, where robust processes are in place to evaluate and accredit an international medical school’s programs. RUSM students can join residency training programs in all 50 states.
RUSVM has been recognized by the government of the Federation of St. Christopher and Nevis (“St. Kitts”) and is chartered to confer the Doctor of Veterinary Medicine degree. The Doctor of Veterinary Medicine degree is accredited by the American Veterinary Medical Association (“AVMA”) Council on Education (“AVMA COE”). RUSVM has affiliations with many AVMA-accredited U.S. and international colleges of veterinary medicine so that RUSVM students can complete their final three clinical semesters of study in the U.S. or abroad. RUSVM has received accreditation for its Postgraduate Studies program from the St. Christopher & Nevis Accreditation Board. The Postgraduate Studies program offers MS and Ph.D. degrees in all research areas supported by RUSVM. Areas of emphasis are guided by RUSVM's themed research centers.
Financial Aid
Like other higher education institutions, Covista’s institutions are dependent upon the timely receipt of federal financial aid funds. All public financial aid programs are subject to political and governmental budgetary considerations. Covista’s institutions and their students participate in a wide range of financial aid programs, including U.S. federal financial aid, state financial aid, Canadian financial aid, private loan programs, tax-favored programs, Covista-provided financial assistance, and employer-provided financial assistance. In the U.S., the Higher Education Act (as reauthorized, the “HEA”) guides the federal government’s support of postsecondary education. Changes to financial aid programs that restrict student eligibility, modify program administration requirements, or reduce funding levels could have a material adverse effect on Covista’s business, financial condition, results of operations, and cash flows. See Item 1A. “Risk Factors” for a discussion of student financial aid related risks.
Legislative and Regulatory Requirements
Government-funded financial assistance programs are governed by extensive and complex regulations in the U.S. Like any other educational institution, Covista’s institutions’ administration of these programs is periodically reviewed by regulatory agencies and is subject to audit or investigation by other authorities. Any violation or alleged noncompliance could be the basis for penalties or other disciplinary action, including initiation of a suspension, limitation, or termination proceeding.
Our domestic postsecondary institutions are subject to extensive federal and state regulations. The HEA, the One Big Beautiful Bill Act (“OBBBA”), and the related ED regulations govern all higher education institutions participating in Title IV programs and provide for a regulatory triad by mandating specific regulatory responsibilities for each of the
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following: (1) the federal government through ED, (2) the accrediting agencies recognized by ED, and (3) state higher education regulatory bodies. Therefore, to be eligible to participate in Title IV programs, a postsecondary institution must be accredited by an agency recognized by ED, must comply with the HEA and all applicable regulations thereunder, and must be authorized to operate by the appropriate higher education authority in each state in which the institution operates, as applicable.
In addition to governance by the regulatory triad, members of the U.S. Congress and federal agencies, including ED, the Consumer Financial Protection Bureau (“CFPB”), and the Federal Trade Commission (“FTC”), review the role that proprietary educational institutions play in higher education. We expect that this regulatory environment will continue for the foreseeable future.
Changes in or new interpretations of applicable laws, rules, or regulations could have a material adverse effect on our eligibility for, continued participation in, or cost of compliance with Title IV programs, to meet accreditation standards or comply with state authorization requirements. The failure to maintain or renew any required regulatory approvals, accreditation, or state authorizations could have a material adverse effect on us. ED regulations regarding financial responsibility provide that, if any one of our Title IV participating institutions (“Title IV institutions”) is unable to pay its obligations under its program participation agreement (“PPA”) as a result of operational issues and/or an enforcement action, our other Title IV institutions, regardless of their compliance with applicable laws and regulations, would not be able to maintain their Title IV eligibility without assisting in the repayment of the non-compliant institution’s Title IV obligations. 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 and Covista as a whole and could result in the imposition of significant restrictions on the ability of Covista’s other Title IV institutions and Covista as a whole to operate. For further information, see “A 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” under subsection “Risks Related to Covista’s Regulated Industry” in Item 1A. “Risk Factors.”
Financial Responsibility
Institutions must pass an ED financial responsibility test, also known as a “composite score,” to maintain eligibility to participate in Title IV aid programs. For Covista’s institutions, this test is calculated at the consolidated Covista level. Applying various financial elements from annual audited financial statements, the score is a composite of three ratios: an equity ratio that measures the institution’s capital resources; a primary reserve ratio that measures an institution’s ability to fund its operations from current resources; and a net income ratio that measures an institution’s ability to operate profitably. A score greater than or equal to 1.5 indicates the institution is considered financially responsible. A score less than 1.5 but greater than or equal to 1.0 is considered financially responsible but requires additional oversight. For example, an institution with a score in this range is subject to heightened cash monitoring and other participation requirements. An institution with a score of less than 1.0 is not considered financially responsible but may continue to participate in the Title IV programs under provisional certification. In addition, this lower score typically requires that the institution be subject to heightened cash monitoring requirements and post a letter of credit (equal to a minimum of 10% of the Title IV aid it received in the institution's most recent fiscal year).
Prior to fiscal year 2022, Covista’s composite score was greater than 1.5. However, on September 25, 2023, ED notified Covista that its fiscal year 2022 composite score had declined to 0.2. As previously disclosed, this was expected due to the acquisition of Walden and other transactions. ED advised that Covista’s five institutions will be permitted to continue to participate in Title IV under provisional certifications with heightened cash monitoring and continued reporting. Management does not believe these conditions will have a material adverse effect on Covista’s operations. At ED’s request, Covista maintains surety-backed letters of credit in favor of ED totaling $202.6 million representing 10% of the consolidated Title IV funds Covista’s institutions received during fiscal year 2025. See “Off-Balance Sheet Arrangements” in Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information.
The financial responsibility rules include other mandatory or discretionary triggers that could require an institution to post a letter of credit. These triggers may be applied based on ED’s interpretation of institutional financial condition and operational events, which may be subjective in nature, and could require additional letters of credit.
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Program Participation Agreement
The HEA specifies the manner in which ED reviews institutions for eligibility and certification to participate in Title IV programs. Every educational institution participating in Title IV programs must be certified to participate through a PPA and certification must be periodically renewed. Such recertification generally is required every six years, but may be required earlier, including when an institution undergoes a change in control. Institutions that violate certain ED Title IV regulations may lose eligibility to participate in Title IV programs or may only continue participation under provisional certification. ED may place an institution on provisional certification status if it finds that the institution does not fully satisfy all of the eligibility and certification standards and in certain other circumstances, such as when an institution is certified for the first time or undergoes a change in control. During the period of provisional certification, the institution must comply with any additional conditions included in the institution’s PPA. In addition, ED may more closely review an institution that is provisionally certified if it applies for recertification or approval to open a new location, add an educational program, acquire another institution, or make any other significant change. Students attending provisionally certified institutions remain eligible to receive Title IV program funds. Provisional certification status also carries fewer due process protections than full certification. If ED determines that a provisionally certified institution is unable to meet its responsibilities under its PPA, it may seek to revoke the institution’s certification to participate in Title IV programs without advance notice or opportunity for the institution to challenge the action.
In February 2026, ED provisionally recertified Chamberlain’s PPA through December 31, 2028.
In January 2026, ED provisionally recertified Walden’s PPA through December 31, 2028.
In March 2026, ED provisionally recertified AUC’s PPA through December 31, 2028.
ED last provisionally recertified RUSM’s PPA through March 31, 2025. Title IV regulations relative to the recertification process allow for an institution’s continued participation in the Title IV programs until its application is either approved or not approved, provided a materially complete application is submitted by the institution no later than 90 days prior to the expiration date in its PPA. This is true even if ED does not complete its evaluation of the application before the PPA’s expiration date. A materially complete application for RUSM’s PPA recertification was timely submitted to ED, which has allowed for RUSM’s continued participation in Title IV programs after PPA expiration.
In October 2024, ED provisionally recertified RUSVM’s PPA through March 31, 2027.
The provisional nature of these PPAs resulted from Covista’s composite score declining and failing to meet ED’s standards of financial responsibility as described above.
Walden, AUC, RUSM, and RUSVM’s provisional PPAs included financial requirements, such as letter of credit and heightened cash monitoring, and RUSM and RUSVM’s provisional PPAs require additional reporting. These requirements have not had and are not expected to have a material effect on Covista’s financial condition or results of operations.
Gainful Employment
The HEA requires certificate programs at all Title IV institutions and degree programs at proprietary Title IV institutions to prepare students for gainful employment in a recognized occupation. In October 2023, ED released new Financial Value Transparency (“FVT”) and Gainful Employment (“GE”) rules effective July 1, 2024. GE programs must meet a debt-to-earnings test in which graduates’ annual debt payments must not exceed 8% of their annual earnings or 20% of their discretionary earnings. GE programs must also meet an earnings premium test in which graduates’ earnings must exceed those of a typical high school graduate. Under the regulation, programs that fail either metric must provide warnings to students and prospective students that the program is at risk of losing Title IV eligibility and programs that fail the same measure in two out of three consecutive years lose Title IV eligibility. The GE regulation also includes a transparency framework in which debt-to-earnings, earnings premium, and a wide range of other program outcomes for all Title IV programs are disclosed on a website hosted by ED. On February 14, 2025, ED extended the institutional reporting deadline for 2023-2024 and earlier award years until September 30, 2025. Covista’s institutions submitted its institutional reports on time for the 2024-2025 award year. On July 1, 2026, ED published final regulations enacting the Do No Harm provisions of OBBBA that substantially revise the FVT/GE framework, including the elimination of debt-to-earnings metrics. The majority of the amendments become effective on July 1, 2027.
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Do No Harm
The recently enacted Do No Harm provisions of OBBBA establish an earnings-based accountability framework under which an undergraduate program may lose Title IV eligibility if the earnings of a programmatic cohort of its completers are no greater than the earnings of a population with a high school diploma, and a graduate or professional program may lose Title IV eligibility if the earnings of a programmatic cohort of its completers as defined in OBBBA and the implementing regulations, published on July 1, 2026, which are generally effective July 1, 2027, are no greater than the earnings of a population with a bachelor’s degree, in each case for two years in a three-year period. These provisions apply to all Title IV participating institutions. See Item 1A. “Risk Factors” for a discussion of Do No Harm related risks.
The 90/10 Rule
An ED regulation known as the 90/10 Rule affects only proprietary institutions participating in Title IV programs, including each of Covista’s institutions. Under this regulation, an institution that derives more than 90% of its revenue on a cash basis from Federal education assistance funds in two consecutive fiscal years loses eligibility to participate in Title IV programs. The following table shows the audited 90/10 rates for each Covista institution for fiscal year 2025 and fiscal year 2024. A consolidated rate for Covista is also provided even though it is not subject to 90/10 requirements.
Fiscal Year |
| ||||
2025 | 2024 |
| |||
Chamberlain University |
| 70 | % | 68 | % |
Walden University | 82 | % | 82 | % | |
American University of the Caribbean School of Medicine |
| 86 | % | 87 | % |
Ross University School of Medicine |
| 86 | % | 87 | % |
Ross University School of Veterinary Medicine |
| 77 | % | 78 | % |
Consolidated |
| 78 | % | 77 | % |
Borrower Defense to Repayment
Under the HEA, ED is authorized to specify acts or omissions of an institution that a borrower may assert as a Borrower Defense to Repayment (“BDR”) of their Title IV loans made under the Federal Direct Loan Program. The 2022 BDR regulations were scheduled to go into effect on July 1, 2023 that included a lower threshold for establishing misrepresentation, no statute of limitation for claims submission, expanded reasons to file a claim including aggressive or deceptive recruitment tactics and omission of fact, weakened due processes afforded to institutions, and reinstated provisions for group discharges. ED also included a six-year statute of limitations for recovery of funds from institutions. These changes would increase financial liability risk and reputational risk for Covista. However, the updated rules were delayed by the July 2025 enactment of OBBBA, which restored the 2019 BDR regulations and delayed the 2022 regulations until July 1, 2035.
Incentive Compensation
An educational institution participating in Title IV programs may not pay any commission, bonus, or other incentive payments to any person involved in student recruitment or awarding of Title IV program funds, if such payments are based directly or indirectly in any part on success in enrolling students or obtaining student financial aid. The law and regulations governing this requirement have not established clear criteria for compliance in all circumstances, which creates ongoing uncertainty about what constitutes incentive compensation and which employees are covered by the regulation.
Administrative Capability
The HEA directs ED to assess the administrative capability of each institution to participate in Title IV programs. The failure of an institution to satisfy any of the criteria may cause ED to determine that the institution lacks administrative capability and, therefore, subject the institution to additional scrutiny, provisional certification, or revocation of eligibility for Title IV programs. ED amended the administrative capability regulations and the changes took effect July 1, 2024. The changes include additional tests of administrative capability that Covista’s institutions must meet. Since amended, ED has not found Covista’s institutions to be non-compliant with the new regulations. Management does not expect that Covista’s institutions will fail to continue to meet these requirements.
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State Authorization
Institutions that participate in Title IV programs must be authorized to operate by the appropriate postsecondary regulatory authority in each state where the institution has a physical presence.
In the U.S., each Chamberlain location is approved to grant degrees by the respective state in which it is located. Chamberlain has obtained licensure or exemption in each state which requires such licensure and where students are enrolled. Walden is registered in its home state of Minnesota with the Minnesota Office of Higher Education. Walden maintains licenses or exemptions in each state which requires such licensure and where students are enrolled. AUC, RUSM, and RUSVM clinical programs are accredited as part of their programs of education by their respective accrediting bodies, approved by the appropriate boards in those states that have a formal process to do so, and are reported to ED as required.
Many states require private-sector postsecondary education institutions to post surety bonds for licensure. In the U.S., Covista has posted $80.0 million of surety bonds as of June 30, 2026 with regulatory authorities on behalf of Chamberlain, Walden, AUC, RUSM, and RUSVM.
Certain states have standards of financial responsibility that differ from those prescribed by federal regulation. When a Covista institution is unable to meet a state’s requirements, it may be required to cease operations in that state.
Cohort Default Rate (“CDR”)
All institutions that participate in Title IV programs must meet a CDR test for former students who entered repayment on Title IV loans received while enrolled at the institution. The rate represents the percentage of students defaulting on one or more Title IV loans within three years of entering repayment during a federal fiscal year. Institutions may lose Title IV eligibility if the most recent CDR exceeds 40% or if each of the three most recent CDRs exceed 30%.
The three-year CDRs for Covista’s institutions are shown below for the three most recent cohort years. 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. The default rate has declined over the past few years due to COVID-19 relief measures which included a freeze on loan payments and suspension of default statuses. As repayment activity resumes, cohort default rates may increase from these historically low levels.
Cohort Default Rate |
| ||||||
2022 | 2021 | 2020 |
| ||||
Chamberlain University | 0.0 | % | 0.0 | % | 0.0 | % | |
Walden University | 0.0 | % | 0.0 | % | 0.0 | % | |
American University of the Caribbean School of Medicine | 0.0 | % | 0.0 | % | 0.0 | % | |
Ross University School of Medicine | 0.0 | % | 0.0 | % | 0.0 | % | |
Ross University School of Veterinary Medicine | 0.0 | % | 0.0 | % | 0.0 | % | |
Satisfactory Academic Progress
In addition to the requirements that educational institutions must meet, student recipients of financial aid must maintain satisfactory academic progress toward completion of their program of study and an appropriate grade point average.
Change of Ownership or Control
Any material change of ownership or change of control of Covista, depending on the type of change, may have significant regulatory consequences for each of our Title IV institutions. Such a change of ownership or control could require recertification by ED, the reevaluation of accreditation by each institution’s accreditors, reauthorization by each institution’s state licensing agencies, and/or providing financial protections. If Covista 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. There is no assurance that such recertification would be obtained. After a material change in ownership or change of control, most institutions will participate in Title IV programs on a provisional basis for a period of one to three years.
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In addition, each Title IV institution is required to report any material change in stock ownership to its principal institutional accrediting body and would generally be required to obtain approval prior to undergoing any transaction that affects, or may affect, its corporate control or governance. In the event of any such change, each of our institution’s accreditors may undertake an evaluation of the effect of the change on the continuing operations of our institution for purposes of determining if continued accreditation is appropriate, and that evaluation may include a comprehensive review.
In addition, some states in which our Title IV institutions are licensed require approval (in some cases, prior approval) of changes of ownership or control in order to remain authorized to operate in those states, and participation in grant programs in some states may be interrupted or otherwise affected by a change of ownership or control.
Refer to the risk factor titled “If regulators do not approve, or delay their approval, of transactions involving a material change of ownership or change of control of Covista, the eligibility of our institutions to participate in Title IV programs, our institutions’ accreditation and our institutions’ state licenses may be impaired in a manner that materially and adversely affects our business” under subsection “Risks Related to Covista’s Regulated Industry” in Item 1A. “Risk Factors.”
Seasonality
The seasonal pattern of Covista’s enrollments and its educational programs’ starting dates affect the timing of cash flows with higher cash inflows at the beginning of academic sessions.
Human Capital
At Covista, our people are central to our ability to address America’s healthcare workforce needs at scale. As the nation’s largest healthcare educator, our long-term success depends on attracting, developing, and retaining talent capable of improving student outcomes, supporting employer needs, driving enrollment growth, and executing with operational excellence.
As of June 30, 2026, Covista had the following number of employees:
Full-Time | Part-Time | Temporary | Visiting | |||||||
Staff | Staff | Staff | Professors | Total | ||||||
Chamberlain | 1,374 | 13 | 166 | 2,865 | 4,418 | |||||
Walden | 1,368 | 9 | 39 | 2,643 | 4,059 | |||||
Medical and Veterinary | 759 | 9 | 49 | 135 | 952 | |||||
Home Office | 1,235 | 4 | 12 | — | 1,251 | |||||
Total | 4,736 | 35 | 266 | 5,643 | 10,680 |
Covista maintains positive employee relations and is not subject to any collective bargaining agreements.
Talent Strategy: Enabling Growth Through People
During fiscal year 2026, we continued to align our talent priorities with Covista’s growth strategy and the capabilities required to scale our institutions, strengthen employer partnerships, and support long-term value creation.
Our talent strategy is focused on four objectives: attracting and deploying talent in critical roles; fostering a high-performance culture; accelerating leadership and capability development; and strengthening employee engagement and retention. These priorities are intended to ensure talent is aligned to the areas of greatest enterprise impact, including student outcomes, enrollment growth, operational execution, technology enablement, and employer integration.
Key areas of focus include workforce planning, leadership and succession development, performance management, differentiated rewards, critical-role readiness, and capability building across the organization.
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Performance, Culture, and Organizational Health
Covista is committed to a culture of performance, accountability, and continuous improvement. During fiscal year 2026, we continued to strengthen the connection between enterprise goals, individual performance, leadership accountability, and rewards.
We advanced our performance management approach to support clearer expectations, more consistent feedback and development support, stronger performance differentiation, and greater accountability for results. We also continued to invest in leadership effectiveness, recognizing the critical role leaders play in translating strategy into execution, developing talent, and driving organizational performance.
We use organizational health and engagement insights to inform enterprise and segment-level action planning, with a focus on strengthening operational discipline, collaboration, knowledge sharing, trust, and alignment around strategic priorities.
Compensation, Benefits, and Well-being
Covista offers a comprehensive total rewards program designed to attract, retain, and support employees while reinforcing performance and business outcomes. Our programs include paid time off, retirement savings plans with company match, health and welfare benefits, paid parental leave, adoption assistance, mental health resources, well-being programs, and tuition assistance and reimbursement across accredited institutions.
During fiscal year 2026, we continued to evolve our total rewards strategy with a focus on market competitiveness, performance differentiation, employee experience, and alignment with our employee value proposition. These efforts are intended to support retention, strengthen organizational performance, and advance execution of our long-term strategy.
Intellectual Property
Covista owns and uses numerous trademarks and service marks, such as “Covista,” “American University of the Caribbean,” “Chamberlain College of Nursing,” “Ross University,” “Walden University,” and others. All trademarks, service marks, certification marks, patents, and copyrights associated with its businesses are owned in the name of Covista Inc. or a subsidiary of Covista Inc. Covista vigorously defends against infringements of its trademarks, service marks, certification marks, patents, and copyrights.
Available Information
We use our website (www.covista.com) as a routine channel of distribution of company information, including press releases, presentations, and supplemental information, as one means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, you should monitor our website in addition to following press releases, Securities and Exchange Commission (“SEC”) filings, and public conference calls and webcasts. You can receive notifications of new information posted on our investor relations website in real time by signing up for email alerts. You may also access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, as well as other reports relating to us that are filed with or furnished to the SEC, free of charge in the investor relations section of our website as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. The content of the websites mentioned above is not incorporated into and should not be considered a part of this report.
Item 1A. 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
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affected. Management cannot predict all the possible risks and uncertainties that may arise. 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.
Due to the regulated nature of proprietary postsecondary institutions, we are subject to audits, compliance reviews, inquiries, complaints, investigations, claims of non-compliance, and lawsuits by federal and state governmental agencies, regulatory agencies, accrediting agencies, present and former students and employees, shareholders, and other third parties, any of whom may allege violations of any of the legal and regulatory requirements applicable to us. 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. ED regulations regarding financial responsibility provide that, if any one of our Title IV institutions is unable to pay its obligations under its Program Participation Agreement (“PPA”) as a result of operational issues and/or an enforcement action, our other Title IV institutions, regardless of their compliance with applicable laws and regulations, would not be able to maintain their Title IV eligibility without assisting in the repayment of the non-compliant institution’s Title IV obligations. 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.
At times, Title IV participating institutions, from all sectors, have experienced scrutiny from federal and state legislators, agencies, attorneys general, and other government officials. An adverse disposition of these existing inquiries, administrative actions, or claims, or the initiation of other inquiries, administrative actions, or claims, could, directly or indirectly, have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in significant restrictions on us and our ability to operate.
Adverse 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.
Adverse publicity regarding any past, pending, or future investigations, claims, settlements, and/or actions against us or other proprietary postsecondary education institutions could negatively affect our reputation, student enrollment levels, revenue, profit, and/or the market price of our common stock. Unresolved investigations, claims, and actions, or adverse resolutions or settlements thereof, could also result in additional inquiries, administrative actions or lawsuits, increased scrutiny, the withholding of authorizations, and/or the imposition of other sanctions by state education and professional licensing authorities, taxing authorities, our accreditors and other regulatory agencies governing us, which, individually or in the aggregate, 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.
Government and regulatory agencies and third parties have initiated, and could initiate additional investigations, claims, or actions against us, which could require us to pay monetary damages, halt certain business practices, or receive other sanctions. The defense and resolution of these matters could require us to expend significant resources.
Due to the regulatory and enforcement efforts at times directed at all Title IV participating institutions and adverse publicity arising from such efforts, we may face additional government and regulatory investigations and actions, lawsuits from private plaintiffs, and shareholder class actions and derivative claims. We may incur significant costs and other
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expenses in connection with our response to, and defense, resolution, or settlement of, investigations, claims, or actions, or group of related investigations, claims, or actions, which, individually or in the aggregate, could be outside the scope of, or in excess of, our existing insurance coverage and could have a material adverse effect on our financial condition, results of operations, and cash flows. As part of our resolution of any such matter, or group of related matters, we may be required to comply with certain forms of injunctive relief, including altering certain business practices, or pay substantial damages, settlement costs, fines, and/or penalties. In addition, findings or claims or settlements thereof could serve as a basis for additional lawsuits or governmental inquiries or enforcement actions, including actions under ED’s Borrower Defense to Repayment regulations. Such actions, individually or combined with other proceedings, 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. Additionally, an adverse allegation, finding or outcome in any of these matters could also materially and adversely affect our ability to maintain, obtain, or renew licenses, approvals, or accreditation, and maintain eligibility to participate in Title IV, Department of Defense and Veterans Affairs programs or serve as a basis for ED to discharge certain Title IV student loans and seek recovery for some or all of its resulting losses from us under Borrower Defense to Repayment regulations, any of which 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.
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.
Under the Higher Education Act (“HEA”), the U.S. Department of Education (“ED”) is authorized to specify in regulations which acts or omissions of an institution of higher education a borrower may assert as a Borrower Defense to Repayment of a Direct Loan made under the Federal Direct Loan Program. See “Borrower Defense to Repayment” in Item 1. “Business” for additional information.
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.
While we intend to defend ourselves vigorously in all pending and future legal proceedings, we may settle certain matters. Moreover, regardless of the merits of our actions and defenses, if we are unable to resolve certain legal proceedings or regulatory actions, indirect consequences arising from unproven allegations or appealable regulatory findings may have adverse consequences to us.
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. The terms of any such settlement 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. 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. As a result, foreseeable and unforeseeable consequences of prior and prospective adjudicated or settled legal proceedings and regulatory matters 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.
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Within 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.
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. The aggregate amount of these letters of credit or other required security could materially and adversely limit our borrowing capacity under our credit agreement and our ability to make capital expenditures and other investments aimed at growing and diversifying our operations, sustain and fund our operations, and make dividend payments to shareholders. 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.
We are subject to risks relating to regulatory matters. If we fail to comply with the extensive regulatory requirements for our operations, we could face fines and penalties, including loss of access to federal and state student financial aid for our students, loss of ability to enroll students in a state, and significant civil liability.
As a provider of higher education, we are subject to extensive regulation. These regulatory requirements cover virtually all phases and aspects of our U.S. postsecondary operations, including educational program offerings, facilities, civil rights, safety, public health, privacy, instructional and administrative staff, administrative procedures, marketing and recruiting, financial operations, payment of refunds to students who withdraw, acquisitions or openings of new schools or programs, addition of new educational programs, and changes in our corporate structure and ownership.
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. As a result, the suspension, limitation, or termination of the eligibility of any of our institutions to participate in 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.
To 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.
Our institutions that participate in Title IV programs each do so pursuant to a PPA that, among other things, includes commitments to abide by all applicable laws and regulations, such as Incentive Compensation and Substantial Misrepresentation. 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.
Government budgetary pressures and changes to laws governing financial aid programs could reduce our student enrollment or delay our receipt of tuition payments.
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.
Action by the U.S. 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. Political and budgetary concerns significantly affect Title IV programs. The U.S. Congress enacted the HEA to be reauthorized on a periodic basis, which most recently occurred in August 2008.
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A comprehensive HEA reauthorization bill has not yet been introduced. However, standalone bills impacting Title IV federal financial aid programs have been introduced in both chambers of Congress. Some of these bills could be included in a larger legislative package, which could include the HEA. When the HEA is reauthorized, existing programs and participation requirements are subject to change. Additionally, funding for student financial assistance programs may be impacted during appropriations and budget actions.
The U.S. 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 may ultimately make. Any action by 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. Certain legislation, provisions in proposed legislation if enacted, or implementation of existing or future law by a current or future administration, could have a material adverse effect on our business, including but not limited to legislation that limits the enrollment of U.S. citizens in foreign medical schools, legislation that could require institutions to share in the risk of defaulted federal student loans, and legislation that ties institutions’ eligibility for Title IV funds to the earnings of its graduates.
Additionally, a shutdown or significant staff reduction of government agencies, such as ED, responsible for administering student financial aid programs under Title IV could lead to delays in student eligibility determinations, delays in origination and disbursement of government-funded student loans to our students, and delays in issuing regulations and guidance related to legislation governing federal financial aid.
Our ability to comply with some ED regulations is affected by economic forces affecting our students and graduates that are not entirely within our control.
Our ability to comply with several ED regulations is not entirely within our control. 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. These factors are influenced by broader economic drivers, including the personal or family wealth of our students, the overall employment outlook for their area of study, and the availability of private financing sources. An economic downturn could impact these factors, which could have a material adverse effect on our business, financial condition, results of operation, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Additionally, institutions may lose Title IV eligibility if the most recent cohort default rate on student loans exceeds 40% or if each of the three most recent cohort default rates exceed 30%. 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. The recently enacted Do No Harm provisions of OBBBA are discussed in detail in Item 1. “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
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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. We cannot predict the extent to which reduced federal loan availability may influence prospective student demand.
ED 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.
ED regulations applicable to institutions participating in Title IV programs prohibit any “substantial misrepresentation” by our institutions, employees, and agents regarding the nature of the institution’s educational programs, its financial charges, or the employability of its graduates. These regulations may, among other things, subject us to claims of sanctions for statements containing errors made to non-students, including any member of the public, impose liability on us for the conduct of others and expose us to liability even when no actual harm occurs. A “substantial misrepresentation” is any misrepresentation on which the person to whom it was made could reasonably be expected to rely, or has reasonably relied, to that person’s detriment. It is possible that despite our compliance controls to prevent misrepresentations, our employees or service providers may make statements that could be construed as substantial misrepresentations. As a result, we may face complaints from students and prospective students over statements made by us and our agents in advertising and marketing, during the enrollment, admissions and financial aid process, and throughout attendance at any of our Title IV institutions, which would expose us to increased risk of enforcement action and applicable sanctions or other penalties, including potential Borrower Defense to Repayment liabilities, and increased risk of private qui tam actions under the Federal False Claims Act. If ED determines that an institution has engaged in substantial misrepresentation, ED may (1) fine the institution; (2) discharge students’ debt and hold the institution liable for the discharged debt under the HEA and the Borrower Defense to Repayment regulations; and/or (3) suspend or terminate an institution’s participation in Title IV programs. Alternatively, ED may impose certain other limitations on the institution’s participation in Title IV programs, which could include the denial of applications for approval of new programs or locations, a requirement to post a substantial letter of credit, or the imposition of one of ED’s heightened cash monitoring processes. Any of the foregoing actions 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.
A 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.
All of our Title IV institutions are subject to meeting financial and administrative standards. These standards are assessed through annual compliance audits, periodic renewal of institutional PPAs, periodic program reviews, and ad hoc events which may lead ED to evaluate an institution’s financial responsibility or administrative capability. See “Financial Responsibility” and “Administrative Capability” in Item 1. “Business” for additional information.
If ED does not recertify any one of our institutions to continue participating in Title IV programs, students at that institution would lose their access to Title IV program funds. Alternatively, ED could recertify our institutions but require our institutions to accept significant limitations as a condition of their continued participation in Title IV programs.
ED certification to participate in Title IV programs lasts a maximum of six years, and institutions are thus required to seek recertification from ED on a regular basis in order to continue their participation in Title IV programs. An institution must also apply for recertification by ED if it undergoes a change in control, as defined by ED regulations.
Each of our Title IV institutions operates under a PPA. There can be no assurance that ED will recertify any of our institutions 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. If ED does not renew or withdraws the certification to participate in Title IV programs for one or more of our institutions at any time, students at such institution would no
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longer be able to receive Title IV program funds. 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 Covista as a whole and could result in the imposition of significant restrictions on the ability of the institution or Covista as a whole to operate. See “Program Participation Agreement” in Item 1. “Business” for additional information.
If 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.
The loss of institutional accreditation by any of our Title IV institutions would leave the affected institution ineligible to participate in Title IV programs and would 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. In addition, an adverse action by any of our institutional accreditors other than loss of accreditation, such as issuance of a warning or probation, could have a material adverse effect on our business. Increased scrutiny of accreditors by ED in connection with ED’s recognition process may result in increased scrutiny of institutions by accreditors or have other consequences.
If regulators do not approve, or delay their approval, of transactions involving a material change of ownership or change of control of Covista, 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 Covista, depending on the type of change, may have significant regulatory consequences for each of our Title IV institutions. Such a change of ownership or control could require recertification by ED, the reevaluation of accreditation by each institution’s accreditors, reauthorization by each institution’s state licensing agencies, and/or providing financial protections. If Covista 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. The continuing participation of each of our Title IV institutions in Title IV programs is critical to our business. Any disruption in an institution’s eligibility to participate in Title IV programs would materially and adversely impact our business, financial condition, results of operations, and cash flows.
In addition, each Title IV institution is required to report any material change in stock ownership to its principal institutional accrediting body and would generally be required to obtain approval prior to undergoing any transaction that affects, or may affect, its corporate control or governance. In the event of any such change, each of our institution’s accreditors may undertake an evaluation of the effect of the change on the continuing operations of our institution for purposes of determining if continued accreditation is appropriate, which evaluation may include a comprehensive review. If our accreditors determine that the change is such that prior approval was required, but was not obtained, many of our accreditors’ policies require the accreditor to consider withdrawal of accreditation. If certain accreditation is suspended or withdrawn with respect to any of our Title IV institutions, they would not be eligible to participate in Title IV programs until the accreditation is reinstated or is obtained from another appropriate accrediting body. There is no assurance that reinstatement of accreditation could be obtained on a timely basis, if at all, and accreditation from a different qualified accrediting authority, if available, would require a significant amount of time. Any material disruption in accreditation would materially and adversely impact our business, financial condition, results of operations, and cash flows.
In addition, some states in which our Title IV institutions are licensed require approval (in some cases, advance approval) of changes in ownership or control in order to remain authorized to operate in those states, and participation in grant programs in some states may be interrupted or otherwise affected by a change in ownership or control.
A 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.
In the event of a bankruptcy filing by Covista, 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
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bankruptcy law, which would make any reorganization difficult to implement. Similarly, in the event of a bankruptcy filing by any of Covista’s subsidiaries that own a Title IV institution, such institution would lose its eligibility to participate in Title IV programs. In the event of any bankruptcy affecting one or more of our Title IV institutions, ED could hold our other Title IV institutions jointly liable for any Title IV program liabilities, whether asserted or unasserted at the time of such bankruptcy, of the institution whose Title IV program eligibility was terminated.
Further, in the event that an institution closes and fails to pay liabilities or other amounts owed to ED, ED can attribute the liabilities of that institution to other institutions under common ownership. If any one of our Title IV institutions were to close or have unpaid ED liabilities, ED could seek to have those liabilities repaid by one of our other Title IV institutions.
In addition, if one of our Title IV institutions were to close, we could be subject to liabilities arising from closed school discharge claims. Under applicable regulations, students who do not complete their programs due to a qualifying institutional closure may be eligible for loan discharges, and ED may seek to recover the amount of such discharges from the institution or, in certain circumstances, from other institutions under common ownership. Any such liabilities could be material and could adversely affect our business, financial condition, results of operations, and cash flows.
Excessive student loan defaults could result in the loss of eligibility to participate in Title IV programs.
Our Title IV institutions may lose their eligibility to participate in Title IV programs if their student loan default rates are greater than standards set by ED. An educational institution may lose its eligibility to participate in some or all Title IV programs, if, for three consecutive federal fiscal years, 30% or more of its students who were required to begin repaying their student loans in the relevant federal fiscal year default on their payment by the end of the next two federal fiscal years. In addition, an institution may lose its eligibility to participate in some or all Title IV programs if its default rate for a federal fiscal year is greater than 40%. If any of our Title IV institutions lose eligibility to participate in Title IV programs because of high student loan default rates, it would 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. See “Cohort Default Rate” in Item 1. “Business” for additional information. Nevertheless, Covista’s cohort default rates are far below such thresholds as discussed in “Cohort Default Rate” in Item 1. “Business.”
Our 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.
Our Title IV institutions may lose eligibility to participate in Title IV programs if, on a cash basis, the percentage of the institution’s revenue derived from Federal education assistance funds for two consecutive fiscal years is greater than 90%. Further, if an institution exceeds the 90% threshold for any single fiscal year, ED could place that institution on provisional certification status for the institution’s following two fiscal years. See “The 90/10 Rule” in Item 1. “Business” for additional information.
If 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 state.
Our Title IV institutions must be authorized to operate by the appropriate postsecondary regulatory authorities in each state in which the institution is located. See “State Authorization” in Item 1. “Business” for a description of Covista’s current U.S. approvals.
The loss of state authorization would, among other things, render the affected institution ineligible to participate in Title IV programs, at least at those state campus locations, and otherwise limit that school’s ability to operate in that state. If these pressures and uncertainties continue in the future, or if one or more of our institutions are unable to offer programs in 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.
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Our ability to place our students in clinicals in hospitals in the U.S. may be limited by efforts of certain state government regulatory bodies, which may limit the growth potential of our medical schools, put our medical schools at a competitive disadvantage to other medical schools, or force our medical schools to substantially reduce their class sizes.
AUC and RUSM enter into affiliation agreements with hospitals across the U.S. to place their third and fourth year students in clinical programs at such hospitals. Certain states with regulatory programs that require state approval of clinical education programs may preclude, limit, or impose onerous requirements on Covista’s entry into affiliation agreements with hospitals in their states. If states limit access to affiliation arrangements, our schools may be at a competitive disadvantage to other schools, and our schools may be required to substantially restrict their enrollment due to limited clinical opportunities for enrolled students. The impact on enrollment, and the potential for enrollment growth, of such restrictions on our schools’ clinical placements could have a material adverse effect on our business, financial conditions, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
Budget 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.
Some states may reduce or eliminate various student financial assistance programs or establish minimum performance measures as a condition of participation. If our students who receive this type of assistance cannot secure alternate sources of funding, they may be forced to withdraw, reduce the rate at which they seek to complete their education, or replace the source with more expensive forms of funding, such as private loans. Other students who would otherwise have been eligible for state financial assistance may not be able to enroll without such aid. This reduced funding could decrease our enrollment and adversely affect our business, financial condition, results of operations, and cash flows.
In addition, the reduction or elimination of these non-federal sources of student funding may adversely affect our 90/10 Rule percentage. See “The 90/10 Rule” in Item 1. “Business” for additional information.
We 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.
The HEA and ED regulations require us to calculate refunds of unearned Title IV program funds disbursed to students who withdraw from their educational program. If refunds are not properly calculated or timely paid, we may be required to post a letter of credit with ED or be subject to sanctions or other adverse actions by ED, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
A 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.
We contract with unaffiliated entities for student software systems and services related to the administration of portions of our Title IV and financing programs. Because each of our institutions may be jointly and severally liable for the actions of third-party servicers and vendors, failure of such servicers to comply with applicable regulations could have a material adverse effect on our institutions, including fines and the loss of eligibility to participate in Title IV programs, which could have a material adverse effect 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. If any of our third-party servicers discontinues providing such services to us or provides services that are materially deficient, we may not be able to replace such third-party servicer in a timely, cost-efficient, or effective manner, or at all, and we could lose our ability to comply with collection, lending, and Title IV requirements, which could have a material adverse effect 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.
We provide financing programs to assist some of our students in affording our educational offerings. These programs are subject to various federal and state rules and regulations. Failure to comply with these regulations could subject us to fines, penalties, obligations to discharge loans, and other injunctive requirements.
If we, or one of the companies that service our credit programs, do not comply with laws applicable to the financing programs that assist our students in affording our educational offerings, including Truth in Lending and Fair Debt
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Collections Practices laws and the Unfair, Deceptive or Abusive Acts or Practices provisions of Title X of the Dodd-Frank Act, we could be subject to fines, penalties, obligations to discharge the debts, and other injunctive requirements, which 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. Additionally, an adverse allegation, finding or outcome in any of these matters could also materially and adversely affect our ability to maintain, obtain or renew licenses, approvals or accreditation, and maintain eligibility to participate in Title IV programs or serve as a basis for ED to discharge certain Title IV student loans and seek recovery for some or all of its resulting losses from us, any of which 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.
Release of confidential information could subject us to civil penalties or cause us to lose our eligibility to participate in Title IV programs.
As an educational institution participating in federal and state student assistance programs and collecting funds from enrollees or their sponsors, we collect and retain certain confidential information. Such information is subject to federal and state privacy and security rules, including the Family Educational Rights and Privacy Act, the Health Insurance Portability and Accountability Act, and the Fair and Accurate Credit Transactions Act. Release or failure to secure confidential information or other non-compliance with these rules could subject us to fines, loss of our capacity to conduct electronic commerce, and loss of eligibility to participate in Title IV programs, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
We could be subject to sanctions if we fail to accurately and timely report sponsored students’ tuition, fees, and enrollment to the sponsoring agency.
A significant portion of our enrollment is sponsored through various federal and state supported agencies and programs, including the U.S. Department of Defense, the U.S. Department of Labor, and the U.S. Department of Veterans Affairs. As a recipient of funds, we are subject to periodic reviews and audits. Inaccurate or untimely reporting or administration of funds to students could result in suspension or termination of our eligibility to participate in these federal and state programs and have a material adverse impact on enrollment and revenue, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Risks Related to Covista’s Business
Student 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.
Our future revenue and growth depend on a number of factors, including many of the regulatory risks discussed above and business risks discussed below. Despite ongoing efforts to provide more scholarships and other financing sources to prospective students, and to increase quality and build our reputation, negative perceptions of the value of a college degree, increased reluctance to take on debt, and the resulting lower student consumer confidence may continue to impact enrollment in the future. In addition, technological innovations in the delivery of low-cost education alternatives and increased competition could negatively affect enrollment.
We 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.
Our undergraduate and graduate educational programs are concentrated in selected areas of medical and healthcare. If applicant career interests or employer needs shift away from these fields, and we do not anticipate or adequately respond to that trend, future enrollment and revenue may decline and the rates at which our graduates obtain jobs involving their fields of study could decline.
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If our graduates are unable to find appropriate employment opportunities or obtain professional licensure or certification, we may not be able to recruit new students.
If employment opportunities for our graduates in fields related to their educational programs decline or they are unable to obtain professional licenses or certifications in their chosen fields, future enrollment and revenue may decline as potential applicants choose to enroll at other educational institutions or providers.
We face heightened competition in the postsecondary education market from both public and private educational institutions.
Postsecondary education in our existing and new market areas is competitive. We compete with traditional public and private two-year and four-year colleges, other proprietary schools, and alternatives to higher education. Some of our competitors, both public and private, have greater financial and nonfinancial resources than us. Some of our competitors, both public and private, are able to offer programs similar to ours at a lower tuition level for a variety of reasons, including the availability of direct and indirect government subsidies, government and foundation grants, large endowments, tax-deductible contributions, and other financial resources not available to proprietary institutions, or by providing fewer student services or larger class sizes. An increasing number of traditional colleges and community colleges are offering distance learning and other online education programs, including programs that are geared towards the needs of working adults. This trend has been accelerated by private companies that provide and/or manage online learning platforms for traditional colleges and community colleges. As the proportion of traditional colleges providing alternative learning modalities increases, we will face increasing competition for students from traditional colleges, including colleges with well-established reputations for excellence. As the online and distance learning segment of the postsecondary education market matures, we believe that the intensity of the competition we face will continue to increase. This intense competition could make it more challenging for us to enroll students who are likely to succeed in our educational programs, which could adversely affect our new student enrollment levels and student persistence and put downward pressure on our tuition rates, any of which could materially and adversely affect our business, financial condition, results of operations, and cash flows.
Outbreaks 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.
Disease outbreaks and other public health conditions in the locations in which we, our students, faculty, and employees live, work, and attend classes could have a significant negative impact on our revenue, profitability, and business. We continue to evaluate, and if appropriate, adopt other measures in the future required for the ongoing safety of our students and employees. If our business experiences prolonged occurrences of adverse public health conditions, we believe it could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Natural 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.
We may experience business interruptions or casualty losses resulting from natural disasters, inclement weather, transit disruptions, political disruptions, armed conflicts or wars, or other events in one or more of the geographic areas in which we operate, particularly in the West Coast and Gulf States of the U.S., and the Caribbean. These events could impair the value of our assets and/or cause us to close schools, temporarily or permanently, and could affect student recruiting opportunities in those locations, causing enrollment and revenue to decline, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
The personal information that we collect may be vulnerable to breach, theft, or loss that could adversely affect our reputation and operations.
Possession and use of personal information in our operations subjects us to risks and costs that could harm our business. We collect, use, and retain large amounts of personal information regarding our students and their families. We also collect and maintain personal information of our employees and contractors in the ordinary course of our business. Some of this personal information is held and managed by certain of our vendors. Confidential information also may become available
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to 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.
Due to the sensitive nature of the information contained on our networks, such as students’ financial information and grades, our networks may be targeted by hackers. Attacks could have a significant negative impact on our systems and operations. Anyone who circumvents security measures could misappropriate proprietary or confidential information or cause interruptions or malfunctions in our operations. Although we use security and business controls to limit access and use of personal information, a third party may be able to circumvent those security and business controls, which could result in a breach of privacy. In addition, errors in the storage, use, or transmission of personal information could result in a breach of privacy. Possession and use of personal information in our operations also subjects us to legislative and regulatory burdens that could require notification of data breaches and restrict our use of personal information. We cannot assure that a breach, loss, or theft of personal information will not occur. A breach, theft, or loss of personal information regarding our students and their families, employees, or contractors that is held by us or our vendors could have a material adverse effect on our reputation and results of operations and result in liability under state and federal privacy statutes and legal actions by federal or state authorities and private litigants, any of which could have a material adverse effect on our business and result in the imposition of significant restrictions on us and our ability to operate.
System 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.
The performance and reliability of our computer networks and system applications, especially online educational platforms and student operational and financial aid packaging applications, are critical to our reputation, operations, and ability to attract and retain students. System errors, disruptions or failures, including those arising from unauthorized access, computer hackers, computer viruses, denial of service attacks, and other security threats, could adversely impact our delivery of educational content to our students or result in delays and/or errors in processing student financial aid and related disbursements. Such events could have a material adverse effect on the reputation of our institutions, our financial condition, results of operations, and cash flows. We may be required to expend significant resources to protect against system errors, failures or disruptions, or the threat of security breaches, or to repair or otherwise mitigate problems caused by any actual errors, disruptions, failures, or breaches. We cannot ensure that these efforts will protect our computer networks, or fully mitigate the resulting impact of interruptions or malfunctions in our operations, despite our regular monitoring of our technology infrastructure security and business continuity plans.
A breach of our information technology systems could subject us to liability, reputational damage, or interrupt the operation of our business.
We rely upon our information technology systems and infrastructure to operate our business. We could experience theft of sensitive data or confidential information or reputational damage from malware or other cyber-attacks, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party providers. Similarly, data privacy breaches by those who access our systems may pose a risk that sensitive data, including intellectual property, trade secrets, or personal information belonging to us, our employees, students, or business partners, may be exposed to unauthorized persons or to the public. Cyber-attacks are increasing in their frequency, sophistication, and intensity, and have become increasingly difficult to detect and respond to. There can be no assurance that our mitigation efforts to protect our data and information technology systems will prevent breaches in our systems (or that of our third-party providers) that could adversely affect our operations and business and result in financial and reputational harm to us, theft of trade secrets and other proprietary information, legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties. Although we maintain a cybersecurity insurance policy covering costs that we may incur in connection with incidents, we nevertheless may incur expenses and losses related to a cyber incident that are not covered by insurance or are in excess of our insurance coverage.
Government regulations relating to the internet could increase our cost of doing business and affect our ability to grow.
The use of the internet and other online services has led to and may lead to the adoption of laws and regulations in the U.S. or foreign countries and to changing interpretations of existing laws and regulations. These laws, regulations, and interpretations may relate to issues such as online privacy, copyrights, trademarks and service marks, sales taxes, value-added taxes, withholding taxes, cost of internet access, and services, allocation, and apportionment of income amongst
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various state, local, and foreign jurisdictions, fair business practices, and the requirement that online education institutions qualify to do business as foreign corporations or be licensed in one or more jurisdictions where they have no physical location or other presence. New laws, regulations, or interpretations related to doing business over the internet could increase our costs and materially and adversely affect our enrollment, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Our ability to open new campuses, offer new programs, and add capacity is dependent on regulatory approvals and requires financial and human resources.
As part of our strategy, we intend to open new campuses, offer new educational programs, and add capacity to certain existing locations. Such actions require us to obtain appropriate federal, state, and accrediting agency approvals. In addition, adding new locations, programs, and capacity may require significant financial investments and human resource capabilities. The failure to obtain appropriate approvals or to properly allocate financial and human resources could adversely impact our future growth. The impacts of potential tariffs on supply chains and construction materials may increase the costs of building new campuses.
We may not be able to attract, retain, and develop key employees necessary for our operations and the successful execution of our strategic plans.
We may be unable to attract, retain, and develop key employees with appropriate educational qualifications and experience. In addition, we may be unable to effectively plan and prepare for changes in key employees. Such matters may cause us to incur higher compensation costs and/or provide less student support and customer service, which could adversely affect enrollment, revenue, and expense. A significant amount of our compensation for key employees is tied to our financial performance. We may require new employees to execute some of our strategic plans. Uncertainty regarding our future financial performance may limit our ability to attract new employees with competitive compensation or increase our cost of recruiting and retaining such new employees.
We may not be able to successfully integrate acquisitions.
As part of our strategy, we are actively exploring acquisition opportunities. We have acquired and may in the future acquire additional education institutions or education related businesses aligned to our strategy. Any acquisition involves significant risks and uncertainties, including, but not limited to:
· | Inability to successfully integrate the acquired operations and personnel into our business and maintain uniform standards, controls, policies, and procedures; |
· | Failure to secure applicable regulatory approvals; |
· | Assumption of known and unknown liabilities; |
· | Diversion of significant attention of our senior management from day-to-day operations; |
· | Issues not discovered in our due diligence process, including compliance issues, commitments, and/or contingencies; and |
· | Financial commitments, investments in foreign countries, and compliance with debt covenants and ED financial responsibility scores. |
Expansion into new international markets will subject us to risks inherent in international operations.
To the extent that we expand internationally, we will face risks that are inherent in international operations including, but not limited to:
· | Compliance with foreign laws and regulations; |
· | Management of internal operations; |
· | Foreign currency exchange rate fluctuations; |
· | Ability to protect intellectual property; |
· | Monetary policy risks, such as inflation, hyperinflation, and deflation; |
· | Price controls or restrictions on exchange of foreign currencies; |
· | Political and economic instability in the countries in which we operate; |
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· | Potential unionization of employees under local labor laws; |
· | Multiple and possibly overlapping and conflicting tax laws; |
· | Inability to cost effectively repatriate cash balances; and |
· | Compliance with U.S. laws and regulations such as the Foreign Corrupt Practices Act. |
Changes in tax laws or exposure to additional income tax liabilities may have a negative impact on our financial results.
Our effective tax rate may fluctuate as a result of evolving U.S. and international tax rules, including those stemming from the Organization for Economic Co-operation and Development’s (“OECD’s”) Base Erosion and Profit Shifting (“BEPS”) initiative. This project includes a two-pillar approach to global taxation focusing on global profit allocation (Pillar One) and a global minimum tax rate of 15% (Pillar Two). The implementation of Pillar Two’s 15% global minimum tax, along with related coordination frameworks such as the recently introduced “side-by-side” approach, is ongoing across multiple jurisdictions in which we operate. As countries adopt these rules, we may experience increased compliance costs, greater complexity in our tax profile, and higher cash taxes. These developments could adversely impact our effective tax rate and results of operations in future years.
Changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results.
Our future effective tax rates may be subject to volatility due to a number of factors, including the geographic mix of earnings, with lower than expected income in jurisdictions with favorable tax rates and higher than expected income in higher tax jurisdictions; changes in the valuation of deferred tax assets and liabilities; the expiration, modification, or lapses of various tax law provisions; the tax treatment of stock-based compensation; and costs associated with intercompany transactions or business restructurings. In addition, changes in tax rates, laws, regulations, accounting principles, or interpretations thereof could further impact our tax position.
We are also subject to examination by the Internal Revenue Service and other tax authorities, which may result in adjustments to our tax liabilities that could be material. We regularly assess the likelihood of adverse outcomes from these examinations in determining the adequacy of our income tax provision. While we have accrued taxes and related interest for potential prior-year adjustments, the ultimate resolution of these matters could have a material impact, either favorable or unfavorable, on our business, financial condition, and results of operations.
Our goodwill and intangible assets potentially could be impaired if our business results and financial condition were materially and adversely impacted by risks and uncertainties.
Covista’s market capitalization can be affected by, among other things, changes in industry or market conditions, changes in results of operations, and changes in forecasts or market expectations related to future results. If our market capitalization were to remain below its carrying value for a sustained period of time or if such a decline becomes indicative that the fair values of our reporting units have declined below their carrying values, an impairment test may result in a non-cash impairment charge. As of June 30, 2026, intangible assets from business combinations totaled $754.3 million and goodwill totaled $961.3 million. Together, these assets equaled 57% of total assets as of such date. If our business results and financial condition were materially and adversely impacted, then such intangible assets and goodwill could be impaired, requiring a possible write-off of up to $754.3 million of intangible assets and up to $961.3 million of goodwill.
We 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.
Our ability to make scheduled payments on or to refinance our debt obligations depends on our and our subsidiaries’ financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business, competitive, legislative, regulatory, and other factors beyond our control. As a result, we may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal and interest on our indebtedness. In addition, because we conduct a significant portion of our operations through our subsidiaries, repayment of our indebtedness is also dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us by dividend, debt repayment, or otherwise. Our subsidiaries are distinct legal entities and other than the guarantors on our indebtedness, they do not have any obligation to pay amounts due on our debt obligations or to make
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funds available for that purpose or for other obligations. Pursuant to applicable state limited liability company laws and other laws and regulations, our non-guarantor subsidiaries may not be able to, or may not be permitted to, make distributions to us in order to enable us to make payments in respect of our debt obligations. In the event that we do not receive distributions from our non-guarantor subsidiaries, we may be unable to make required principal and interest payments on our indebtedness.
In addition, there can be no assurance that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our Revolver (as defined in Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”) in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital, or restructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.
Our 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.
If we cannot make scheduled payments on our indebtedness, we will be in default, and investors of our debt obligations could declare all outstanding principal and interest to be due and payable, the lenders under the credit facilities could terminate their commitments to loan money, our secured lenders (including the lenders under the credit facilities) could foreclose against the assets securing their loans and we could be forced into bankruptcy or liquidation.
Increased use of artificial intelligence (“AI”) in our programs and processes or by others may subject us to increased business, compliance, and legal risk.
We use and are working to further incorporate AI technologies into our operations, products, and services. While we expect that our use of AI will help grow our business and benefit our students and employees, it is not certain that we will realize our desired or anticipated benefits. Any actual or perceived misuse of AI technologies could adversely affect student trust, our reputation, and our business results.
Our development and use of AI may require additional investments and/or increase the cost of our operations and offerings and increase our reliance on third-party vendors and service providers. Any failure, disruption, security incident, or misconduct involving such providers may adversely affect our operations and financial condition.
The presence of AI could increase our legal risk due to the rapidly evolving legal and regulatory landscape governing AI. Compliance with existing and future AI-related laws and regulations may increase our cost of compliance, restrict our ability to deploy certain AI-enabled solutions, and may result in legal or reputational exposure in the event of actual or alleged noncompliance.
Other 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 operations.
We may be required to make substantial investments in content creation, digital marketing, search optimization, AI optimization strategies, technology, personnel, and third-party service providers to maintain or improve visibility across emerging AI-enabled platforms. There can be no assurance that these investments will be successful or that we will be able to keep pace with technological change.
Item 1B. Unresolved Staff Comments
None.
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Item 1C. Cybersecurity
Cyber Risk Management Strategy
Covista recognizes the importance of safeguarding sensitive information pertaining to our students, employees, institutions, and operations.
Program Highlights
The CMRF is anchored by our Enterprise Information Security Framework (“EISF”), which adheres to the guidelines set forth by the National Institute of Standards and Technology (“NIST”) 800-53 Framework. To enhance comprehensiveness, our policies also harmonize with other leading frameworks such as the ISO 27001 Standard, Family Educational Rights and Privacy Act of 1974 (“FERPA”), Payment Card Industry Data Security Standard (“PCI DSS”), Gramm-Leach-Bliley Act (“GLBA”), California Consumer Privacy Act (“CCPA”), General Data Protection Regulation (“GDPR”), and other pertinent local, state, national, and international regulations governing data privacy and information security. Our cybersecurity program has adopted controls mapped to these frameworks and incorporated them into Covista’s policies, risk registers, control testing plans, and vendor assessments.
The CISO team is supported by a Security Operations team reporting into the Information Technology (“IT”) function. This IT team provides engineering and technical expertise. The team is further supported by a 24x7 Security Operations Center (“SOC”). Covista has a Cyber Incident Response Plan (“Incident Response Plan”) that delineates the requirements of notification, classification, analysis, and communication of cybersecurity incidents based on the identified severity level. The Incident Response Plan includes initial steps to convene a response team, contain the incident, consider insurance notification requirements, determine the type of incident and escalation, consider the communications protocol and possible disclosure requirements, and consider involving law enforcement. The Incident Response Plan also provides for a lessons learned review to identify improvements that could be made. Covista’s Legal and Compliance teams also provide incident response support and manage cybersecurity-related legal and compliance issues. Processes are in place to escalate cybersecurity incidents promptly to facilitate timely decisions by management regarding public disclosure and regulatory reporting.
An integral component of Covista’s Incident Response Plan is our Privacy Incident Response Plan (the “Privacy Response Plan”) which addresses privacy of our students’ records, including under the FERPA. The Privacy Response Plan requires annual training for our employees on how to recognize and report potential privacy incidents.
We regularly conduct Incident Response Plan tabletop exercises, including simulations of malware and ransomware attacks. Our IT environment and cybersecurity-related controls are reviewed by our internal audit function and external third parties. We sponsor third-party assessments, including cyber risk reviews and penetration testing, to evaluate our cybersecurity program independently.
Covista subjects its systems to penetration testing to identify potential exposures, ensuring that our infrastructure maintains an acceptable level of cyber risk.
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Our year-round cybersecurity awareness program mandates training for all system users, covering essential topics such as safeguarding sensitive information, identifying phishing attempts, securing mobile devices, and understanding the risks associated with artificial intelligence (“AI”) platforms. Our cybersecurity awareness training is mandatory for all employees and is conducted at least annually, with targeted phishing simulation campaigns conducted throughout the year. Third-party suppliers are subject to a formal onboarding process that includes completion of a cybersecurity questionnaire, review of SOC 2 or ISO certifications where available, and risk scoring. New engagements with third parties are contingent upon affirmative evaluations or adherence to risk mitigation/acceptance protocols.
Governance
Item 2. Properties
Covista’s leased facilities total 2,075,000 square feet with remaining lease terms of up to 17 years. Covista owns five facilities with a total of 775,000 square feet, none of which are subject to a mortgage or other indebtedness.
Chamberlain
As of June 30, 2026, Chamberlain operates 24 campuses in 16 states, consisting of 3 campuses located in Covista-owned locations and 21 campuses located in leased facilities. Additionally, Chamberlain has 7 leased facilities under development that are expected to be converted into future campuses. Collectively, these facilities total 1,366,000 square feet.
Walden
Walden operates online and does not have any campus space. Walden leases office space in Minneapolis, Minnesota with 27,000 square feet.
Medical and Veterinary
AUC
AUC’s nine-acre campus is located in St. Maarten. The campus is owned and includes 240,000 square feet of academic, student-life, and student residence facilities. In addition to classrooms and auditoriums, educational facilities include a gross anatomy lab, a multi-purpose learning lab, library and learning resource centers, offices, cafeteria, and recreational space facilities.
RUSM
RUSM’s campus is located in Barbados and is comprised of 494,000 square feet of leased facilities. Educational facilities include 120,000 square feet of classrooms, labs for anatomy and radiology imaging, simulation, physiology and pathology, exam rooms, private and group study, and faculty and administrative space. A residential village includes 7,000
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square feet of administrative student services space surrounded by shopping and recreational facilities and over 400 multi-bedroom student units totaling 367,000 square feet.
RUSVM
RUSVM’s 50-acre campus is located in St. Kitts. The campus is owned and includes 253,000 square feet. Educational facilities include an anatomy/clinical building, pathology building, research building with state-of-the-art necropsy lab, classroom buildings, administration building, bookstore, cafeteria, and a library/learning resource center. Animal care facilities include kennels, an aviary, and livestock barns. Student-life facilities are also located on the campus.
Home Office
Covista is headquartered in Chicago, Illinois in a leased facility with 84,000 square feet. Covista also leases office space in Lisle, Illinois with 153,000 square feet, Columbia, Maryland with 53,000 square feet, and Washington, D.C. with 9,000 square feet.
Item 3. Legal Proceedings
For information regarding legal proceedings, see Note 18 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.”
Item 4. Mine Safety Disclosures
Not applicable.
Information About Our Executive Officers
Our executive officers are as follows, along with each executive officer’s position, age, and business experience as of the date of this filing:
Name and Current Position | Age | Business Experience | ||
|---|---|---|---|---|
Stephen W. Beard Chairman and Chief Executive Officer | 55 | Mr. Beard joined Covista in February 2018 as Senior Vice President, Secretary and General Counsel. In January 2019, Mr. Beard was appointed Chief Operating Officer and General Counsel. In February 2020, Mr. Beard assumed responsibilities for our former Financial Services segment and was relieved of his General Counsel responsibilities. In September 2021, Mr. Beard was appointed Covista’s President and Chief Executive Officer. In November 2024, Mr. Beard was appointed Chairman of Covista’s Board of Directors. Prior to joining Covista, Mr. Beard held a variety of leadership roles at Heidrick & Struggles, International from 2003 through 2018 and was most recently Executive Vice President, Chief Administrative Officer and General Counsel. | ||
Douglas G. Beck Senior Vice President, General Counsel, Corporate Secretary and Institutional Support Services | 59 | Mr. Beck joined Covista in June 2021 as Senior Vice President, General Counsel and Corporate Secretary. In January 2023, Mr. Beck assumed responsibilities for our institutional support services. Prior to joining Covista, Mr. Beck held a variety of leadership roles at Hub Group from 2011 through 2021 and was most recently Executive Vice President, General Counsel and Secretary. Previously, Mr. Beck served in a legal capacity in a number of other companies across a variety of industries including Alberto Culver, Navistar, and Allegiance Healthcare. |
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Name and Current Position | Age | Business Experience | ||
|---|---|---|---|---|
Michael Betz Chief Growth & Innovation Officer and President, Walden University | 53 | Mr. Betz joined Covista in May 2022 as President of Walden University. In January 2025, Mr. Betz assumed additional responsibilities as Chief Digital Officer. In April 2026, Mr. Betz was named Chief Growth & Innovation Officer, expanding his role to include oversight of Covista’s marketing organization. Prior to joining Covista, Mr. Betz served in a variety of leadership roles at McKinsey & Co. from 2017 through 2022 where he most recently served as partner and was a leader in McKinsey’s higher education and growth transformation practices. | ||
Manjunath Gangadharan Vice President, Chief Accounting Officer | 44 | Mr. Gangadharan joined Covista in April 2022 as Vice President, Chief Accounting Officer. Prior to joining Covista, Mr. Gangadharan served as Vice President, Corporate Controller at Culligan International since April 2021. Previously, Mr. Gangadharan served as the Chief Accounting Officer at Groupon Inc. since February 2020 and prior to that served in various leadership roles at Groupon since December 2016. | ||
Sara Hill Senior Vice President, Chief Human Resources Officer | 57 | Ms. Hill joined Covista in September 2024 as Senior Vice President, Chief Human Resources Officer. Prior to joining Covista, Ms. Hill served as Chief Human Resources Officer at Intricon from 2020 through 2024. Previously, Ms. Hill served as Chief Human Resources Officer at Ceridian from 2012 through 2016. | ||
Scott Liles Chief Strategy and Performance Officer and President, Medical and Veterinary | 60 | Mr. Liles joined Covista in April 2024 as President, Medical and Veterinary. In August 2026, Mr. Liles assumed additional responsibilities as Chief Strategy and Performance Officer. Prior to joining Covista, Mr. Liles served as Chief Executive Officer of the Association of Certified Anti-Money Laundering Specialists (“ACAMS”) since March 2022 and President and Managing Director of ACAMS from November 2020 through February 2022. Previously, Mr. Liles served as President, Spire Insurance at Nationwide Insurance from November 2018 through November 2020 and President for Nationwide Pet from 2012 through 2018. | ||
Amelia Manning President, Chamberlain University | 52 | Ms. Manning joined Covista in May 2026 as President of Chamberlain University. Prior to joining Covista, Ms. Manning served as Dean of Tulane University’s School of Professional Advancement from June 2025 through May 2026. Previously, Ms. Manning served in various leadership roles at Southern New Hampshire University from 2004 to 2025 and was most recently Chief Operating Officer. | ||
Megan Noel Senior Vice President, Chief Corporate Affairs Officer | 41 | Ms. Noel joined Covista in May 2025 as Senior Vice President, Chief Corporate Affairs Officer. Prior to joining Covista, Ms. Noel served as Global President, Corporate Affairs at Golin from October 2024 through May 2025. Previously, Ms. Noel held a variety of leadership roles at PwC from 2014 through 2024 and was most recently Senior Managing Director for PwC US and Mexico. |
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Name and Current Position | Age | Business Experience | ||
|---|---|---|---|---|
Robert J. Phelan Senior Vice President, Chief Financial Officer | 61 | Mr. Phelan joined Covista in February 2020 as Vice President, Chief Accounting Officer. Effective April 24, 2021, Mr. Phelan served as Interim Chief Financial Officer and was appointed Senior Vice President, Chief Financial Officer in October 2021. Prior to joining Covista, Mr. Phelan served as Senior Vice President, Finance - Corporate Controller / Risk Management / Asset Protection at Sears Holdings Corporation (“Sears”), the parent company of Kmart Holdings Corporation and Sears, Roebuck and Co., an integrated retailer with a national network of stores, since June 2018. Previously, Mr. Phelan was the Senior Vice President, Finance - Treasurer & Chief Audit Executive at Sears from July 2016 through May 2018. Mr. Phelan also served as Senior Vice President and President – Inventory & Space Management at Sears from September 2007 through June 2016. |
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Covista’s common stock is listed on the New York Stock Exchange and NYSE Texas under the symbol “CVSA.” The stock transfer agent and registrar for Covista’s common stock is Computershare Investor Services, LLC.
Holders
There were 147 current holders of record of Covista’s common stock as of July 31, 2026. The number of holders of record does not include beneficial owners of its securities whose shares are held by various brokerage firms, other financial institutions, Covista’s 401(k) Retirement Plan, and its Colleague Stock Purchase Plan.
Dividends
Covista did not pay any dividends in fiscal year 2026, 2025, or 2024. Covista does not expect to pay any cash dividends in the foreseeable future. Any future payment of dividends will be at the discretion of the Covista Board of Directors (the “Board”) and will be dependent on projections of future earnings, cash flow, financial requirements of Covista, and other factors as the Board deems relevant.
Recent Sales of Unregistered Securities
There were no unregistered sales of equity securities during fiscal year 2026.
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Issuer Purchases of Equity Securities
The table below reflects shares of common stock we repurchased during the fourth quarter of the fiscal year ended June 30, 2026.
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) | ||||||
April 1, 2026 - April 30, 2026 | — | $ | — | — | $ | 661,811,630 | ||||
May 1, 2026 - May 31, 2026 | — | $ | — | — | $ | 661,811,630 | ||||
June 1, 2026 - June 30, 2026 | — | $ | — | — | $ | 661,811,630 | ||||
Total | — | $ | — | — | ||||||
| (1) | See Note 14 “Share Repurchases” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our share repurchase programs. |
Other Purchases of Equity Securities
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | |||||
April 1, 2026 - April 30, 2026 | 1,459 | $ | 112.40 | NA | NA | ||||
May 1, 2026 - May 31, 2026 | 1,007 | $ | 127.85 | NA | NA | ||||
June 1, 2026 - June 30, 2026 | — | $ | — | NA | NA | ||||
Total | 2,466 | 118.71 | NA | NA | |||||
| (1) | Represents shares delivered to Covista for payment of withholding taxes from employees for vesting restricted stock units and shares swapped for payment on exercise of incentive stock options pursuant to the terms of Covista’s stock incentive plans. |
Performance Graph
The following graph compares the cumulative total returns of Covista’s common stock, the NYSE Composite Index (U.S. Companies), and a Peer Group (as defined below) for the period from June 30, 2021 through June 30, 2026, assuming an investment of $100 in each on June 30, 2021 and the reinvestment of dividends. Additionally, the Peer Group is weighted by the market capitalization of each component company. The stock price performance on the following graph is not necessarily indicative of future stock performance.
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Comparison of Five-Year Cumulative Total Return
Among Covista Inc., NYSE Composite Index, and a Peer Group
June 30, | ||||||||||||
2021 | 2022 | 2023 | 2024 | 2025 | 2026 | |||||||
Covista Inc. | 100 | 101 | 96 | 191 | 357 | 350 | ||||||
NYSE Composite Index (U.S. Companies) | 100 | 90 | 101 | 117 | 135 | 161 | ||||||
Peer Group (1) | 100 | 105 | 111 | 157 | 205 | 226 | ||||||
Source data: Zacks Investment Research
(1) The self-determined “Peer Group” consists of the following companies selected on the basis of similarity in nature of their businesses: American Public Education, Inc. (APEI), Graham Holdings Company (GHC), Grand Canyon Education, Inc. (LOPE), Laureate Education, Inc. (LAUR), Perdoceo Education Corporation (formerly known as Career Education Corporation) (PRDO), and Strategic Education, Inc. (formerly known as Strayer Education, Inc.) (STRA).
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This management’s discussion and analysis of financial condition and results of operations (“MD&A”) should be read with and is qualified in its entirety by the Consolidated Financial Statements and the notes thereto included in this report. It should also be read in conjunction with the Cautionary Disclosure Regarding Forward-Looking Statements (see the Introduction section preceding Part I), the Risk Factors (see Item 1A. “Risk Factors”), and the Financial Aid and Legislative and Regulatory Requirements (see Item 1. “Business”) disclosures set forth in this report. Covista reports on a fiscal year period ending on June 30.
Throughout this MD&A, we sometimes use information derived from the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” and the notes thereto but not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these items are considered “non-GAAP financial measures” under the Securities and Exchange Commission (“SEC”) rules. See the “Non-GAAP Financial Measures and Reconciliations”
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section for the reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures.
Certain items presented in tables may not sum due to rounding. Percentages presented are calculated from the underlying numbers in thousands. Discussions throughout this MD&A are based on continuing operations unless otherwise noted.
The following discussion is on the comparison between fiscal year 2026 and fiscal year 2025 results. For a discussion on the comparison between fiscal year 2025 and fiscal year 2024 results, see the MD&A included in Covista’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025, as filed with the SEC.
Segments
We present three reportable segments as follows:
Chamberlain – This segment includes the operations of Chamberlain, which offers degree and certificate programs in the nursing and health professions postsecondary education industry.
Walden – This segment includes the operations of Walden, which offers degree and certificate programs, including those in nursing, education, counseling, business, information technology, psychology, public health, social work and human services, public administration and public policy, and criminal justice.
Medical and Veterinary – This segment includes the operations of AUC, RUSM, and RUSVM, collectively referred to as the “medical and veterinary schools,” which offer degree and certificate programs in the medical and veterinary postsecondary education industry.
“Home Office” includes activities not allocated to a reportable segment. Financial and descriptive information about Covista’s reportable segments is presented in Note 19 “Segment Information” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.”
Fiscal Year 2026 Highlights
Financial and operational highlights for fiscal year 2026 include:
| ● | Covista revenue increased 9.3%, or $165.8 million, to $1,954.1 million in fiscal year 2026 compared to the prior year driven by increased revenue across all segments. |
| ● | Net income increased 6.1%, or $14.5 million, to $251.6 million in fiscal year 2026 compared to the prior year. This increase was primarily driven by an increase in revenue along with decreases in interest expense and asset impairments, partially offset by a loss from discontinued operations and increases in strategic advisory costs, labor and other costs to support increased enrollment, marketing expense, investments to support growth initiatives, and the provision for income taxes. |
| ● | Diluted earnings per share increased 13.9%, or $0.86, to $7.04 in fiscal year 2026 compared to the prior year driven by the increase in net income and lower diluted shares due to share repurchases. |
| ● | Adjusted net income increased 15.3%, or $39.1 million, to $294.7 million in fiscal year 2026 compared to the prior year. This increase was primarily driven by an increase in revenue and a decrease in interest expense, partially offset by increases in labor and other costs to support increased enrollment, marketing expense, investments to support growth initiatives, and the provision for income taxes. |
| ● | Diluted adjusted earnings per share increased 23.7%, or $1.58, to $8.25 in fiscal year 2026 compared to the prior year driven by the increase in adjusted net income and lower diluted shares due to share repurchases. |
| ● | For fiscal year 2026, average total student enrollment at Chamberlain increased 1.1% compared to the prior year. For the May 2026 session, total student enrollment at Chamberlain increased 1.6% compared to the same session last year. |
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| ● | For fiscal year 2026, average total student enrollment at Walden increased 13.2% compared to the prior year. As of June 30, 2026, total student enrollment at Walden increased 14.0% compared to June 30, 2025. |
| ● | For fiscal year 2026, average total student enrollment at the medical and veterinary schools increased 4.5% compared to the prior year. For the May 2026 semester, total student enrollment at the medical and veterinary schools increased 7.3% compared to the same semester last year. |
| ● | On August 6, 2025, we entered into Amendment No. 4 to Credit Agreement and Incremental Assumption Agreement (the “Revolver Amendment”), to (i) increase available commitments under our revolving facility by $100.0 million (resulting in aggregate outstanding commitments of $500.0 million under the revolving facility after giving effect to the Revolver Amendment), (ii) extend the maturity and commitment termination date of our revolving facility to August 6, 2030, and (iii) reduce the pricing on any drawn revolving loans to the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin ranging from 2.25% to 3.00% or an alternate base rate (“ABR”) plus an applicable margin ranging from 1.25% to 2.00% depending on Covista’s net first lien leverage ratio for such period. |
| ● | On March 2, 2026, we entered into Amendment No. 5 to Credit Agreement and Incremental Assumption Agreement (the “Term Loan B Amendment”) to incur new term loans under Term Loan B in an aggregate principal amount of $510.0 million with a maturity date of March 2, 2033. In addition, on March 2, 2026, we repaid the previously outstanding $103.3 million principal amount of Term Loan B and the remaining $405.0 million outstanding principal amount of the Senior Secured Notes due 2028. See Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information. |
| ● | Covista repurchased a total of 2,421,920 shares of its common stock under its share repurchase programs at an average cost of $98.35 per share during fiscal year 2026. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors. |
Results of Operations
Revenue
The following table presents revenue by segment detailing the changes from the prior year (in thousands):
Year Ended June 30, 2026 |
| ||||||||||||
Chamberlain |
| Walden |
| Medical and |
| Consolidated |
| ||||||
Fiscal year 2025 | $ | 725,774 | $ | 693,430 | $ | 369,086 | $ | 1,788,290 | |||||
Growth | 24,438 | 111,503 | 29,854 | 165,795 | |||||||||
Fiscal year 2026 | $ | 750,212 | $ | 804,933 | $ | 398,940 | $ | 1,954,085 | |||||
% change from prior year | 3.4 | % | 16.1 | % | 8.1 | % | 9.3 | % | |||||
Chamberlain
Chamberlain Student Enrollment:
Fiscal Year 2026 | |||||||||||||
Session | July 2025 | Sept. 2025 | Nov. 2025 | Jan. 2026 | Mar. 2026 | May 2026 | |||||||
Total students | 37,697 | 39,846 | 39,278 | 40,145 | 40,767 | 39,501 | |||||||
% change from prior year | 4.5 | % | 2.2 | % | (1.0) | % | (0.7) | % | 0.5 | % | 1.6 | % | |
Fiscal Year 2025 | |||||||||||||
Session | July 2024 | Sept. 2024 | Nov. 2024 | Jan. 2025 | Mar. 2025 | May 2025 |
| ||||||
Total students | 36,061 | 38,987 | 39,691 | 40,445 | 40,564 | 38,891 | |||||||
% change from prior year | 12.1 | % | 11.7 | % | 11.5 | % | 8.7 | % | 6.8 | % | 5.8 | % | |
Chamberlain revenue increased 3.4%, or $24.4 million, to $750.2 million in fiscal year 2026 compared to the prior year driven by higher tuition rates and enrollment. Enrollment increased in pre-licensure nursing programs in all fiscal year 2026 sessions; however, enrollment has declined in post-licensure nursing programs during fiscal year 2026. Chamberlain
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is achieving pre-licensure growth by optimizing investments in student enrollment and experience while leveraging scale through a national footprint with in-person and online curriculum delivery modalities. Management is focused on optimizing marketing and enrollment operations to address post-licensure enrollment.
Tuition Rates:
Current tuition rates in fiscal year 2026 increased compared to the prior fiscal year for the Bachelor of Science in Nursing (“BSN”) onsite and online degree, Master of Science in Nursing (“MSN”), Master of Social Work (“MSW”) and Master of Public Health (“MPH”) online degree programs. The average increase across all of these programs was approximately 3.4% from the prior year.
Walden
Walden Student Enrollment:
Fiscal Year 2026 | |||||||||
September 30, | December 31, | March 31, | June 30, | ||||||
Period | 2025 | 2025 | 2026 | 2026 | |||||
Total students | 52,216 | 52,435 | 54,474 | 54,851 | |||||
% change from prior year | 13.6 | % | 13.0 | % | 12.3 | % | 14.0 | % | |
Fiscal Year 2025 | |||||||||
September 30, | December 31, | March 31, | June 30, | ||||||
Period | 2024 | 2024 | 2025 | 2025 | |||||
Total students | 45,979 | 46,399 | 48,526 | 48,116 | |||||
% change from prior year | 12.2 | % | 13.2 | % | 13.5 | % | 15.0 | % | |
Walden total student enrollment represents those students attending instructional sessions as of the dates identified above. Walden revenue increased 16.1%, or $111.5 million, to $804.9 million in fiscal year 2026 compared to the prior year driven by an increase in enrollment, higher tuition rates, and an increase in average credit hours per student. Walden’s improved enrollment has been accelerated by investments in student experience and brand along with providing flexibility to working adults through part-time and Tempo Learning® competency-based programs.
Tuition Rates:
Tuition rates for Walden programs, including general education are charged on a per credit hour basis that varies based on the nature of the program. For other programs such as those with a subscription-based learning modality, tuition is charged on a per term basis. Students are also charged program and clinical fees depending on the specific programs. Some programs require students to attend residencies, skills labs, and pre-practicum labs, for which tuition is charged per event. The average increase in tuition rates, event charges, and fees across all programs was approximately 2.6% from the prior year.
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Medical and Veterinary
Medical and Veterinary Student Enrollment:
Fiscal Year 2026 | |||||||
Semester | Sept. 2025 | Jan. 2026 | May 2026 | ||||
Total students | 5,297 | 5,344 | 5,120 | ||||
% change from prior year | 2.4 | % | 4.1 | % | 7.3 | % | |
Fiscal Year 2025 | |||||||
Semester | Sept. 2024 | Jan. 2025 | May 2025 |
| |||
Total students | 5,174 | 5,133 | 4,773 | ||||
% change from prior year | (0.7) | % | 1.2 | % | 1.0 | % | |
Medical and Veterinary revenue increased 8.1%, or $29.9 million, to $398.9 million in fiscal year 2026 compared to the prior year driven by an increase in enrollment and higher tuition rates. Management continues to focus on increasing enrollment and driving operational effectiveness, specifically around academic support and enrollment experience.
Tuition Rates:
| ● | Effective for semesters beginning in September 2025, tuition rates and administrative fees for the basic sciences and clinical rotation portions of AUC’s medical program increased 4.5% from the prior academic year. |
| ● | Effective for semesters beginning in September 2025, tuition rates and administrative fees for the basic sciences and clinical rotation portions of RUSM’s medical program increased 4.5% and 4.6%, respectively, from the prior academic year. |
| ● | Effective for semesters beginning in September 2025, tuition rates for the pre-clinical and clinical curriculum of RUSVM’s veterinary program increased 3.0% from the prior academic year. |
Cost of Educational Services
The cost of educational services expense category includes expenses related to the cost of faculty and staff who support educational operations, facilities, adjunct faculty, supplies, housing, bookstore, other educational materials, student education-related support activities, and provision for credit losses. The following table presents cost of educational services by segment detailing the changes from the prior year (in thousands):
Year Ended June 30, 2026 |
| ||||||||||||
| Chamberlain |
| Walden |
| Medical and | Consolidated | |||||||
Fiscal year 2025 |
| $ | 321,769 | $ | 240,084 |
| $ | 209,577 |
| $ | 771,430 | ||
Cost increase |
|
| 23,494 |
| 30,873 |
| 7,863 |
|
| 62,230 | |||
Fiscal year 2026 |
| $ | 345,263 | $ | 270,957 |
| $ | 217,440 |
| $ | 833,660 | ||
% change from prior year |
| 7.3 | % |
| 12.9 | % | 3.8 | % | 8.1 | % | |||
Cost of educational services increased 8.1%, or $62.2 million, to $833.7 million in fiscal year 2026 compared to the prior year. This cost increase was primarily driven by an increase in labor and other costs to support increased enrollment.
As a percentage of revenue, cost of educational services was 42.7% in fiscal year 2026 compared to 43.1% in the prior year. The decrease in the percentage was primarily the result of revenue growth accompanied by cost efficiencies.
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Student Services and Administrative Expense
The student services and administrative expense category includes expenses related to student admissions, marketing and advertising, general and administrative, and amortization of acquired intangible assets. The following table presents student services and administrative expense by segment detailing the changes from the prior year (in thousands):
Year Ended June 30, 2026 |
| |||||||||||||||
| Chamberlain |
| Walden |
| Medical and |
| Home Office | Consolidated | ||||||||
Fiscal year 2025 | $ | 250,638 | $ | 275,435 | $ | 90,257 | $ | 55,674 | $ | 672,004 | ||||||
Cost increase |
| 10,669 |
| 24,488 |
| 11,278 |
| 7,813 |
| 54,248 | ||||||
Litigation reserve impact | — | 5,550 | — | — | 5,550 | |||||||||||
Asset impairments decrease | — | — | — | (6,442) | (6,442) | |||||||||||
Strategic advisory costs increase | — | — | — | 6,562 | 6,562 | |||||||||||
Loss on assets held for sale decrease | — | — | — | (490) | (490) | |||||||||||
Debt modification costs decrease | — | — | — | (712) | (712) | |||||||||||
Fiscal year 2026 | $ | 261,307 | $ | 305,473 | $ | 101,535 | $ | 62,405 | $ | 730,720 | ||||||
Fiscal year 2026 % change: |
|
| ||||||||||||||
Cost increase | 4.3 | % |
| 8.9 | % | 12.5 | % |
| 14.0 | % | 8.1 | % | ||||
Litigation reserve impact |
| — |
| 2.0 | % |
| — |
| — |
| 0.8 | % | ||||
Asset impairments decrease | — |
| — |
| — |
| (11.6) | % |
| (1.0) | % | |||||
Strategic advisory costs increase | — |
| — |
| — |
| 11.8 | % |
| 1.0 | % | |||||
Loss on assets held for sale decrease |
| — |
| — |
| — |
| (0.9) | % |
| (0.1) | % | ||||
Debt modification costs decrease |
| — |
| — |
| — |
| (1.3) | % |
| (0.1) | % | ||||
Fiscal year 2026 % change |
| 4.3 | % |
| 10.9 | % |
| 12.5 | % |
| 12.1 | % |
| 8.7 | % | |
Student services and administrative expense increased 8.7%, or $58.7 million, to $730.7 million in fiscal year 2026 compared to the prior year. After excluding litigation reserve, asset impairments, strategic advisory costs, loss on assets held for sale, and debt modification costs, student services and administrative expense increased 8.1%, or $54.2 million, in fiscal year 2026 compared to the prior year. This cost increase was primarily driven by an increase in marketing expense and investments to support growth initiatives.
As a percentage of revenue, student services and administrative expense was 37.4% in fiscal year 2026 compared to 37.6% in the prior year. The decrease in the percentage was primarily the result of revenue growth.
Restructuring Expense
Restructuring expense was $6.3 million and $3.3 million in fiscal year 2026 and 2025, respectively. This increase was primarily driven by workforce reductions. In addition, we continue to incur restructuring charges or reversals related to exited leased space from previous restructuring activities.
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Operating Income
The following table presents a reconciliation of operating income to adjusted operating income by segment (in thousands):
Year Ended June 30, | ||||||||||||
Increase/(Decrease) | ||||||||||||
2026 | 2025 | $ | % | |||||||||
Chamberlain: | ||||||||||||
Operating income | $ | 141,618 | $ | 151,455 | $ | (9,837) | (6.5) | % | ||||
Restructuring expense | 2,024 | 1,912 | 112 | |||||||||
Adjusted operating income | $ | 143,642 | $ | 153,367 | $ | (9,725) | (6.3) | % | ||||
Operating margin | 18.9 | % | 20.9 | % | ||||||||
Adjusted operating margin | 19.1 | % | 21.1 | % | ||||||||
Walden: | ||||||||||||
Operating income | $ | 227,788 | $ | 177,911 | $ | 49,877 | 28.0 | % | ||||
Restructuring expense | 715 | — | 715 | |||||||||
Amortization of acquired intangible assets | 11,220 | 11,220 | — | |||||||||
Litigation reserve | — | (5,550) | 5,550 | |||||||||
Adjusted operating income | $ | 239,723 | $ | 183,581 | $ | 56,142 | 30.6 | % | ||||
Operating margin | 28.3 | % | 25.7 | % | ||||||||
Adjusted operating margin | 29.8 | % | 26.5 | % | ||||||||
Medical and Veterinary: | ||||||||||||
Operating income | $ | 79,110 | $ | 68,798 | $ | 10,312 | 15.0 | % | ||||
Restructuring expense | 855 | 454 | 401 | |||||||||
Adjusted operating income | $ | 79,965 | $ | 69,252 | $ | 10,713 | 15.5 | % | ||||
Operating margin | 19.8 | % | 18.6 | % | ||||||||
Adjusted operating margin | 20.0 | % | 18.8 | % | ||||||||
Home Office: | ||||||||||||
Operating loss | $ | (65,140) | $ | (56,622) | $ | (8,518) | (15.0) | % | ||||
Restructuring expense | 2,735 | 948 | 1,787 | |||||||||
Asset impairments | — | 6,442 | (6,442) | |||||||||
Strategic advisory costs | 18,562 | 12,000 | 6,562 | |||||||||
Loss on assets held for sale | — | 490 | (490) | |||||||||
Debt modification costs | — | 712 | (712) | |||||||||
Adjusted operating loss | $ | (43,843) | $ | (36,030) | $ | (7,813) | (21.7) | % | ||||
Covista: | ||||||||||||
Operating income (GAAP) | $ | 383,376 | $ | 341,542 | $ | 41,834 | 12.2 | % | ||||
Restructuring expense | 6,329 | 3,314 | 3,015 | |||||||||
Amortization of acquired intangible assets | 11,220 | 11,220 | — | |||||||||
Litigation reserve | — | (5,550) | 5,550 | |||||||||
Asset impairments | — | 6,442 | (6,442) | |||||||||
Strategic advisory costs | 18,562 | 12,000 | 6,562 | |||||||||
Loss on assets held for sale | — | 490 | (490) | |||||||||
Debt modification costs | — | 712 | (712) | |||||||||
Adjusted operating income (non-GAAP) | $ | 419,487 | $ | 370,170 | $ | 49,317 | 13.3 | % | ||||
Operating margin (GAAP) | 19.6 | % | 19.1 | % | ||||||||
Adjusted operating margin (non-GAAP) | 21.5 | % | 20.7 | % | ||||||||
Consolidated operating income increased 12.2%, or $41.8 million, to $383.4 million in fiscal year 2026 compared to the prior year. The operating income increase in fiscal year 2026 was primarily driven by an increase in revenue and a reduction in asset impairments, partially offset by a reduction in litigation reserves in the prior year, and increases in strategic advisory costs, labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives. The reduction in litigation reserves in fiscal year 2025 represented a $5.6 million receipt in the second quarter of fiscal year 2025 from a claim made for indemnification under the Membership Interest Purchase Agreement with Laureate Education, Inc.
Consolidated adjusted operating income increased 13.3%, or $49.3 million, to $419.5 million in fiscal year 2026 compared to the prior year. The adjusted operating income increase in fiscal year 2026 was primarily driven by an increase
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in revenue, partially offset by increases in labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives.
Chamberlain
Segment adjusted operating income decreased 6.3%, or $9.7 million, to $143.6 million in fiscal year 2026 compared to the prior year. The adjusted operating income decrease in fiscal year 2026 was primarily driven by increases in labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives, partially offset by an increase in revenue.
Walden
Segment adjusted operating income increased 30.6%, or $56.1 million, to $239.7 million in fiscal year 2026 compared to the prior year. The adjusted operating income increase in fiscal year 2026 was primarily driven by an increase in revenue, partially offset by increases in labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives.
Medical and Veterinary
Segment adjusted operating income increased 15.5%, or $10.7 million, to $80.0 million in fiscal year 2026 compared to the prior year. The adjusted operating income increase in fiscal year 2026 was primarily driven by an increase in revenue, partially offset by increases in investments to support initiatives to drive growth, investments in academic support, and marketing expense.
Interest Expense
Interest expense was $45.4 million and $52.3 million in fiscal year 2026 and 2025, respectively. This decrease was primarily driven by lower interest expense due to decreased borrowings and a lower interest rate on our Term Loan B, and lower letters of credit fees, partially offset by an increase in a loss on debt extinguishment from the write-off of debt issuance costs (as discussed in Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”).
Other Income, Net
Other income, net was $7.2 million and $9.3 million in fiscal year 2026 and 2025, respectively. This decrease was primarily driven by a decrease in interest income due to lower invested cash balances, partially offset by higher investment gains.
Provision for Income Taxes
Our effective income tax rate from continuing operations can differ from the 21% U.S. federal statutory rate due to several factors, including tax on global intangible low-taxed income (“GILTI”), limitation of tax benefits on certain executive compensation, the rate of tax applied by state and local jurisdictions, the rate of tax applied to earnings outside the U.S., tax incentives, tax credits related to research and development expenditures, changes in valuation allowance, changes in unrecognized tax benefits, and tax benefits on stock-based compensation.
Our effective tax rate from continuing operations was 22.5% and 22.1% in fiscal year 2026 and 2025, respectively. The effective tax rate for fiscal year 2026 increased compared to the prior year primarily due to taxes on foreign earnings net of U.S. foreign tax credits, partially offset by an increase in the percentage of earnings from operations in lower taxed jurisdictions.
In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which introduced substantial changes to U.S. tax provisions. The most relevant provisions to Covista for fiscal year 2026 include allowing accelerated tax deductions for qualified property and research and development expenditures. The impacts of OBBBA were not material to the income tax provision for fiscal year 2026.
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Discontinued Operations
We had a loss from discontinued operations in fiscal year 2026 of $15.8 million and income from discontinued operations in fiscal year 2025 of $4.4 million. We recorded income within discontinued operations related to the DeVry University earn-out of $0.5 million and $7.0 million in fiscal year 2026 and 2025, respectively. In addition, we continue to have activity associated with ongoing litigation and settlements related to divestitures, which is classified within discontinued operations.
Liquidity and Capital Resources
Covista’s primary source of liquidity is the cash received from payments for student tuition, fees, books, and other educational materials. These payments include funds originating as financial aid from various federal and state loan and grant programs, student and family educational loans, employer educational reimbursements, scholarships, and student and family financial resources. Covista continues to provide financing options for its students, including Covista’s credit extension programs.
The pattern of cash receipts during the year is seasonal. Covista’s cash collections on accounts receivable peak at the start of each institution’s term. Accounts receivable reach their lowest level at the end of each institution’s term.
Covista’s consolidated cash and cash equivalents balance of $406.3 million and $199.6 million as of June 30, 2026 and 2025, respectively, included cash and cash equivalents held at Covista’s international operations of $58.3 million and $22.9 million as of June 30, 2026 and 2025, respectively, which is available to Covista for general corporate purposes.
Cash Flow Summary
Operating Activities
Net cash provided by operating activities from continuing operations in fiscal year 2026 increased $137.1 million to $470.8 million, compared to $333.7 million in the prior year. This increase was primarily driven by a $173.9 million increase in cash collected from students, a $22.9 million decrease in net legal settlement payments, and a $17.8 million decrease in income tax payments, partially offset by a $76.4 million increase in payments to employees and vendors.
Investing Activities
Net cash used in investing activities in fiscal year 2026 and 2025 was $83.7 million and $41.9 million, respectively, and was primarily driven by capital expenditures of $77.7 million and $50.3 million, respectively. In addition, in fiscal year 2026, we made a $5.0 million minority investment in a business and in fiscal year 2025, we received proceeds of $7.3 million from the sale of a building in Naperville, Illinois. Capital expenditures for fiscal year 2026 primarily included information technology investments and new campus development at Chamberlain.
Financing Activities
Net cash used in financing activities in fiscal year 2026 was $180.1 million, primarily driven by share repurchases of $239.9 million, employee taxes paid on withholding shares of $42.4 million, and payment of debt issuance and extinguishment costs of $12.0 million, partially offset by net borrowings under long-term debt obligations of $112.2 million. Net cash used in financing activities in fiscal year 2025 was $316.0 million, primarily driven by share repurchases of $213.1 million and net repayments under long-term debt obligations of $100.0 million.
On December 15, 2025, we announced that the Board of Directors (the “Board”) authorized Covista’s sixteenth share repurchase program, which allows Covista to repurchase up to $750.0 million of its common stock through December 15, 2028. As of June 30, 2026, $661.8 million of authorized share repurchases remained under the sixteenth share repurchase program. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors. See Note 14 “Share Repurchases” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our share repurchase programs.
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Material Cash Requirements
Long-Term Debt – As of June 30, 2026, under the Credit Facility, Covista had an outstanding principal amount on its Term Loan B of $510.0 million, which matures on March 2, 2033 and outstanding borrowings on its Revolver of $163.0 million, which matures on August 6, 2030. The Term Loan B requires quarterly principal payments. See Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our Credit Facility. On July 1, 2026, we repaid the outstanding borrowings of $163.0 million on the Revolver.
As of June 30, 2026, Covista had $202.6 million of surety-backed letters of credit outstanding in favor of ED. See “Off-Balance Sheet Arrangements” in Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information.
As of June 30, 2026, Covista had $80.0 million of surety bonds to satisfy certain state regulatory requirements for licensure.
In the event of unexpected market conditions or negative economic changes that could negatively affect Covista’s earnings and/or operating cash flow, our Credit Facility includes a $500.0 million Revolver with available capacity of $337.0 million as of June 30, 2026. With the $163.0 million repayment on the Revolver referenced above, the available capacity was $500.0 million as of July 1, 2026.
Operating Lease Obligations – We have operating lease obligations for the minimum payments required under various lease agreements which are recorded on the Consolidated Balance Sheets. See Note 11 “Leases” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our lease obligations.
We believe our cash flows from operations, and our existing cash balances, combined with availability under our credit facility and access to the debt markets, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, capital spending, and anticipated stock repurchases for a period that includes the next twelve months as well as the next several years. However, our ability to maintain sufficient liquidity may be affected by numerous factors, many of which are outside our control.
We have engaged in and continue to engage in the review and planning of strategies to refinance or otherwise optimize our capital structure, which may include issuing debt, equity or other securities, or entering into new credit facilities. This review and planning could result in our pursuing one or more significant corporate transactions. There can be no assurance as to when or whether we will determine to pursue any such transaction, whether any such transaction will be successful, or the effects the failure to undertake any such transaction may have on our business, including our ability to achieve our operational, strategic, and financial goals.
Critical Accounting Estimates
We describe our significant accounting policies in the Notes to Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.” The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Critical accounting estimates discussed below are those that we believe involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Although management believes its assumptions and estimates are reasonable, actual results could differ from those estimates.
Credit Losses
The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in our accounts and financing receivable balances as of each balance sheet date. In evaluating the collectability of our accounts and financing receivable balances, we utilize historical events, current conditions, and reasonable and supportable forecasts about the future. The estimate of our credit losses involves a significant level of uncertainty as it requires significant judgment to
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estimate the amount we will collect in the future on our accounts and financing receivable balances. See Note 9 “Accounts and Financing Receivables” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our credit losses.
Impairment of Long-Lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Events that may trigger an impairment analysis could include a decision by management to exit a market or a line of business or to consolidate operating locations. Upon identifying such an event, if the carrying value of the long-lived asset is no longer recoverable based upon the undiscounted future cash flows of the asset or asset group, the amount of the impairment is the difference between the carrying amount and the fair value of the asset or asset group. Significant judgment is involved in determining whether a triggering event has occurred, and significant assumptions are used in the estimation of future cash flows and fair values of long-lived assets. Changes in our judgments and assumptions could result in impairments of long-lived assets in future periods.
Goodwill and Intangible Assets
Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. Our annual testing date is May 31.
We have the option to assess goodwill for impairment by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is determined that the reporting unit fair value is more likely than not less than its carrying value, or if we do not elect the option to perform an initial qualitative assessment, we perform a quantitative assessment of the reporting unit’s fair value. If the carrying value of a reporting unit containing the goodwill exceeds the fair value of that reporting unit, an impairment loss is recognized equal to the difference between the carrying value of the reporting unit and its fair value, not to exceed the carrying value of goodwill. We also have the option to perform a qualitative assessment to test indefinite-lived intangible assets for impairment by determining whether it is more likely than not that the indefinite-lived intangible assets are impaired. If it is determined that the indefinite-lived intangible asset is more likely than not impaired, or if we do not elect the option to perform an initial qualitative assessment, we perform a quantitative assessment of the indefinite-lived intangible assets. If the carrying value of the indefinite-lived intangible assets exceeds their fair value, an impairment loss is recognized to the extent the carrying value exceeds fair value.
For intangible assets with finite lives, we evaluate for potential impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset or asset group, the amount of the impairment is the difference between the carrying amount and the fair value of the asset or asset group. Intangible assets with finite lives are amortized over their expected economic lives, which is five years.
All intangible assets and certain goodwill are being amortized for tax reporting purposes over statutory lives.
As part of our annual impairment review of goodwill and indefinite-lived intangible assets, we elected to perform a quantitative assessment of the AUC reporting unit’s fair value and indefinite-lived intangible assets. Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions. Significant assumptions used in the determination of reporting unit fair value measurements generally include forecasted cash flows, discount rates, terminal growth rates, and earnings multiples. The discounted cash flow method used to determine the fair value of our AUC reporting unit during fiscal year 2026 reflected our most recent cash flow projections, a discount rate of 11.7%, and a terminal growth rate of 3.0%. The significant assumptions used in the market comparable method include earnings multiples for comparable companies. Each of these inputs can significantly affect the fair values of our reporting units. Based on this quantitative assessment, it was determined that the fair value of the AUC reporting unit exceeded its carrying value by 34% and therefore no goodwill impairment was identified.
Significant judgments and assumptions were used in determining the fair value of the AUC reporting unit’s indefinite-lived intangible assets. The relief from royalty method of the income approach and the with and without method of the
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income approach used in the determination of the fair values of our AUC trade name and AUC Title IV eligibility and accreditation indefinite-lived intangible assets, respectively, during fiscal year 2026 reflected our most recent revenue projections, a discount rate of 11.7%, a royalty rate of 5.5%, and a terminal growth rate of 3.0%. Each of these factors and assumptions can significantly affect the value of the intangible asset. Based on these quantitative assessments, it was determined that the fair values of the AUC trade name and AUC Title IV eligibility and accreditation indefinite-lived intangible assets in the AUC reporting unit exceeded their carrying values by 169% and 24%, respectively, and therefore no impairment was identified.
Management bases its fair value estimates on assumptions it believes to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates. If economic conditions deteriorate, or operating performance of our reporting units do not meet expectations such that we revise our long-term forecasts, we may recognize impairments of goodwill and other intangible assets in future periods. See Note 12 “Goodwill and Intangible Assets” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our goodwill and intangible assets impairment analysis.
Income Taxes
Covista accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Covista also recognizes future tax benefits associated with tax loss and credit carryforwards as deferred tax assets. Covista’s deferred tax assets are reduced by a valuation allowance, when in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. To assess whether it is more likely than not that deferred tax assets will be realized and whether a valuation allowance needs to be recorded against them, we consider future reversals of existing taxable temporary differences, expected future earnings, prior earnings history, and tax planning strategies. Such assessments involve significant judgments and are subject to change in the future particularly if earnings are significantly different from expectations.
Covista is subject to audit by federal, state, and foreign tax authorities and Covista reduces its net tax assets for the estimated additional tax and interest that may result from those tax authorities disputing uncertain tax positions Covista has taken. Evaluating the exposure associated with uncertain tax positions involves significant judgment and we record reserves based on our past experience with similar situations and on the technical support for the positions. Our effective tax rate for a given period could be impacted by changes in the measurement of uncertain tax positions.
Contingencies
Covista is subject to contingencies, such as various claims and legal actions that arise in the normal conduct of its business. We record an accrual for those matters where management believes a loss is probable and can be reasonably estimated. For those matters for which we have not recorded an accrual, their possible impact on Covista’s business, financial condition, or results of operations, cannot be predicted at this time. A significant amount of judgment and the use of estimates are required to quantify our ultimate exposure in these matters. The valuation of liabilities for these contingencies is reviewed on a quarterly basis and any necessary adjustments to the accrual on the Consolidated Balance Sheets are recorded. While we believe that the amount accrued to-date is adequate, future changes in circumstances could impact these determinations. See Note 18 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our loss contingencies.
Recent Accounting Pronouncements
See Note 2 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for a description of recent accounting standards and their anticipated effects on our Consolidated Financial Statements.
Non-GAAP Financial Measures and Reconciliations
We believe that certain non-GAAP financial measures provide investors with useful supplemental information regarding the underlying business trends and performance of Covista’s ongoing operations as seen through the eyes of
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management and are useful for period-over-period comparisons. We use these supplemental non-GAAP financial measures internally in our assessment of performance and budgeting process. However, these non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The following are non-GAAP financial measures used in this Annual Report on Form 10-K:
Adjusted net income (most comparable GAAP measure: net income) – Measure of Covista’s net income adjusted for restructuring expense, amortization of acquired intangible assets, strategic advisory costs, loss on debt extinguishment, litigation reserve, asset impairments, loss on assets held for sale, debt modification costs, tax benefit due to change in unrecognized tax benefits, and loss (income) from discontinued operations.
Adjusted earnings per share (most comparable GAAP measure: diluted earnings per share) – Measure of Covista’s diluted earnings per share adjusted for restructuring expense, amortization of acquired intangible assets, strategic advisory costs, loss on debt extinguishment, litigation reserve, asset impairments, loss on assets held for sale, debt modification costs, tax benefit due to change in unrecognized tax benefits, and loss (income) from discontinued operations.
Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Covista’s operating income adjusted for restructuring expense, amortization of acquired intangible assets, litigation reserve, asset impairments, strategic advisory costs, loss on assets held for sale, and debt modification costs.
Adjusted EBITDA (most comparable GAAP measure: net income) – Measure of Covista’s net income adjusted for loss (income) from discontinued operations, interest expense, other income, net, provision for income taxes, depreciation, amortization of acquired intangible assets, amortization of cloud computing implementation assets, stock-based compensation, restructuring expense, litigation reserve, asset impairments, strategic advisory costs, loss on assets held for sale, and debt modification costs. Provision for income taxes, interest expense, and other income, net are not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with adjusted operating income.
A description of special items in our non-GAAP financial measures described above are as follows:
| ● | Restructuring expense primarily related to workforce reductions, costs to exit certain course offerings, and prior real estate consolidations at Covista’s home office. We do not include normal, recurring, cash operating expenses in our restructuring expense. |
| ● | Amortization of acquired intangible assets. |
| ● | Amortization of cloud computing implementation assets. |
| ● | Strategic advisory costs related to expanding capabilities and bringing new capacities to market to further enhance our strategic position. We do not include normal, recurring, cash operating expenses in our strategic advisory costs. |
| ● | Loss on debt extinguishment related to amendments and repayments of our Senior Secured Notes due 2028, Term Loan B, and Revolver. |
| ● | Reserves related to significant litigation. |
| ● | Asset impairments related to adjusting certain operating lease assets and property and equipment as a result of adjusting carrying values to fair values. |
| ● | Loss on assets held for sale related to adjusting those assets to estimated fair value less costs to sell. |
| ● | Debt modification costs related to refinancing our Term Loan B. |
| ● | Tax benefit due to change in unrecognized tax benefits. |
| ● | Loss (income) from discontinued operations includes activity from ongoing litigation costs and settlements related to divestitures and the earn-outs we received. |
The following tables provide a reconciliation from the most directly comparable GAAP measure to these non-GAAP financial measures. The operating income reconciliation is included in the results of operations section within this MD&A.
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Net income reconciliation to adjusted net income (in thousands):
Year Ended June 30, | ||||||
2026 | 2025 | |||||
Net income (GAAP) | $ | 251,566 | $ | 237,065 | ||
Restructuring expense | 6,329 | 3,314 | ||||
Amortization of acquired intangible assets | 11,220 | 11,220 | ||||
Strategic advisory costs | 18,562 | 12,000 | ||||
Loss on debt extinguishment, litigation reserve, asset impairments, loss on assets held for sale, and debt modification costs | 4,810 | 3,832 | ||||
Tax benefit due to change in unrecognized tax benefits | (3,289) | — | ||||
Income tax impact on non-GAAP adjustments (1) | (10,308) | (7,423) | ||||
Loss (income) from discontinued operations | 15,809 | (4,388) | ||||
Adjusted net income (non-GAAP) | $ | 294,699 | $ | 255,620 | ||
| (1) | Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements. |
Diluted earnings per share reconciliation to adjusted earnings per share (shares in thousands):
Year Ended June 30, | ||||||
2026 | 2025 | |||||
Diluted earnings per share (GAAP) | $ | 7.04 | $ | 6.18 | ||
Effect on diluted earnings per share: | ||||||
Restructuring expense | 0.18 | 0.09 | ||||
Amortization of acquired intangible assets | 0.31 | 0.29 | ||||
Strategic advisory costs | 0.52 | 0.31 | ||||
Loss on debt extinguishment, litigation reserve, asset impairments, loss on assets held for sale, and debt modification costs | 0.13 | 0.10 | ||||
Tax benefit due to change in unrecognized tax benefits | (0.09) | - | ||||
Income tax impact on non-GAAP adjustments (1) | (0.29) | (0.19) | ||||
Loss (income) from discontinued operations | 0.44 | (0.11) | ||||
Adjusted earnings per share (non-GAAP) | $ | 8.25 | $ | 6.67 | ||
Diluted shares | 35,715 | 38,334 | ||||
| (1) | Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements. |
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Reconciliation to adjusted EBITDA (in thousands):
Year Ended June 30, | ||||||||||||
Increase/(Decrease) | ||||||||||||
2026 | 2025 | $ | % | |||||||||
Chamberlain: | ||||||||||||
Adjusted operating income (GAAP) | $ | 143,642 | $ | 153,367 | $ | (9,725) | (6.3) | % | ||||
Depreciation | 23,073 | 21,687 | 1,386 | |||||||||
Amortization of cloud computing implementation assets | 7,689 | 3,033 | 4,656 | |||||||||
Stock-based compensation | 11,128 | 13,309 | (2,181) | |||||||||
Adjusted EBITDA (non-GAAP) | $ | 185,532 | $ | 191,396 | $ | (5,864) | (3.1) | % | ||||
Adjusted EBITDA margin (non-GAAP) | 24.7 | % | 26.4 | % | ||||||||
Walden: | ||||||||||||
Adjusted operating income (GAAP) | $ | 239,723 | $ | 183,581 | $ | 56,142 | 30.6 | % | ||||
Depreciation | 8,103 | 7,421 | 682 | |||||||||
Amortization of cloud computing implementation assets | 6,939 | 3,002 | 3,937 | |||||||||
Stock-based compensation | 13,190 | 12,477 | 713 | |||||||||
Adjusted EBITDA (non-GAAP) | $ | 267,955 | $ | 206,481 | $ | 61,474 | 29.8 | % | ||||
Adjusted EBITDA margin (non-GAAP) | 33.3 | % | 29.8 | % | ||||||||
Medical and Veterinary: | ||||||||||||
Adjusted operating income (GAAP) | $ | 79,965 | $ | 69,252 | $ | 10,713 | 15.5 | % | ||||
Depreciation | 12,016 | 10,853 | 1,163 | |||||||||
Amortization of cloud computing implementation assets | 2,555 | 1,208 | 1,347 | |||||||||
Stock-based compensation | 8,243 | 7,486 | 757 | |||||||||
Adjusted EBITDA (non-GAAP) | $ | 102,779 | $ | 88,799 | $ | 13,980 | 15.7 | % | ||||
Adjusted EBITDA margin (non-GAAP) | 25.8 | % | 24.1 | % | ||||||||
Home Office: | ||||||||||||
Adjusted operating loss | $ | (43,843) | $ | (36,030) | $ | (7,813) | (21.7) | % | ||||
Depreciation | 658 | 741 | (83) | |||||||||
Stock-based compensation | 8,655 | 8,318 | 337 | |||||||||
Adjusted EBITDA | $ | (34,530) | $ | (26,971) | $ | (7,559) | (28.0) | % | ||||
Covista: | ||||||||||||
Net income (GAAP) | $ | 251,566 | $ | 237,065 | $ | 14,501 | 6.1 | % | ||||
Loss (income) from discontinued operations | 15,809 | (4,388) | 20,197 | |||||||||
Interest expense | 45,435 | 52,318 | (6,883) | |||||||||
Other income, net | (7,178) | (9,290) | 2,112 | |||||||||
Provision for income taxes | 77,744 | 65,837 | 11,907 | |||||||||
Depreciation and amortization | 72,253 | 59,165 | 13,088 | |||||||||
Stock-based compensation | 41,216 | 41,590 | (374) | |||||||||
Restructuring expense | 6,329 | 3,314 | 3,015 | |||||||||
Litigation reserve | — | (5,550) | 5,550 | |||||||||
Asset impairments | — | 6,442 | (6,442) | |||||||||
Strategic advisory costs | 18,562 | 12,000 | 6,562 | |||||||||
Loss on assets held for sale | — | 490 | (490) | |||||||||
Debt modification costs | — | 712 | (712) | |||||||||
Adjusted EBITDA (non-GAAP) | $ | 521,736 | $ | 459,705 | $ | 62,031 | 13.5 | % | ||||
Adjusted EBITDA margin (non-GAAP) | 26.7 | % | 25.7 | % | ||||||||
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Covista is not dependent upon the price levels, nor affected by fluctuations in pricing, of any particular commodity or group of commodities.
The financial position and results of operations of AUC, RUSM, and RUSVM Caribbean operations are measured using the U.S. dollar as the functional currency. Substantially all of their financial transactions are denominated in the U.S. dollar.
The interest rate on Covista’s Term Loan B is based upon the Secured Overnight Financing Rate (“SOFR”). As of June 30, 2026, Covista had $510.0 million in outstanding borrowings under the Term Loan B with an interest rate of 5.98%.
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Based upon borrowings of $510.0 million, a 100 basis point increase in short-term interest rates would result in $5.1 million of additional annual interest expense.
Item 8. Financial Statements and Supplementary Data
Index to Consolidated Financial Statements
| Page |
Report of Independent Registered Public Accounting Firm (PCAOB ID | 51 |
Consolidated Balance Sheets as of June 30, 2026 and 2025 | 54 |
Consolidated Statements of Income for the years ended June 30, 2026, 2025, and 2024 | 55 |
Consolidated Statements of Cash Flows for the years ended June 30, 2026, 2025, and 2024 | 56 |
Consolidated Statements of Shareholders’ Equity for the years ended June 30, 2026, 2025, and 2024 | 57 |
Notes to Consolidated Financial Statements | 58 |
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Covista Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Covista Inc. and its subsidiaries (the “Company”) as of June 30, 2026 and 2025, and the related consolidated statements of income, of shareholders’ equity and of cash flows for each of the three years in the period ended June 30, 2026, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2026 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
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Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Impairment Assessments – American University of the Caribbean School of Medicine (“AUC”) Reporting Unit Goodwill and AUC Title IV Eligibility and Accreditations Indefinite-Lived Intangible Asset (“AUC Title IV intangible asset”)
As described in Notes 2 and 12 to the consolidated financial statements, as of June 30, 2026, the goodwill balance associated with the Medical and Veterinary reportable segment was $305.5 million, of which a portion relates to the AUC reporting unit, and the consolidated Title IV eligibility and accreditations indefinite-lived intangible assets balance was $611.1 million, of which a portion relates to the AUC Title IV intangible asset. Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. Management performs a quantitative assessment of the reporting unit’s and indefinite-lived intangible asset’s fair value if it is determined that the fair value is more likely than not less than the carrying value, or if management does not elect the option to perform an initial qualitative assessment. As of May 31, 2026, management performed a quantitative assessment of the fair values of the AUC reporting unit and AUC Title IV intangible asset. Fair value was estimated by management using a discounted cash flow method and the market comparable method for the AUC reporting unit and using the with and without method in a discounted cash flow model for the AUC Title IV intangible asset. Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions. The significant assumptions used in the discounted cash flow method are the risk-adjusted discount rate, forecasted revenue and forecasted earnings before interest, taxes, depreciation, and amortization (“EBITDA”), and a terminal growth rate. The significant assumptions used in the market comparable method include earnings multiples for comparable companies. Based on management’s quantitative assessment, it was determined that the fair value of the AUC reporting unit exceeded its carrying value and therefore no goodwill impairment was identified. The significant assumptions used in the with and without method valuation approach are the risk-adjusted discount rate, forecasted revenue with and without the accreditations in place, and forecasted EBITDA with and without the accreditations in place. Based on management’s quantitative assessment, it was determined that the fair value of the AUC Title IV intangible asset exceeded its carrying value and therefore no impairment was identified.
The principal considerations for our determination that performing procedures relating to the impairment assessments of the AUC reporting unit goodwill and AUC Title IV intangible asset is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of the AUC reporting unit and AUC Title IV intangible asset; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s
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significant assumptions related to the forecasted revenue used in the discounted cash flow method for the AUC reporting unit and forecasted revenue with and without the accreditations in place for the AUC Title IV intangible asset; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill and indefinite-lived intangible asset impairment assessments, including controls over the valuation of the AUC reporting unit and AUC Title IV intangible asset. These procedures also included, among others (i) testing management’s process for developing the fair value estimates of the AUC reporting unit and AUC Title IV intangible asset; (ii) evaluating the appropriateness of the discounted cash flow method and the market comparable method used by management for the AUC reporting unit and the with and without method in a discounted cash flow model for the AUC Title IV intangible asset; (iii) testing the completeness and accuracy of underlying data used in the valuation methods; and (iv) evaluating the reasonableness of the significant assumptions used by management related to the forecasted revenue for the discounted cash flow method for the AUC reporting unit and forecasted revenue with and without the accreditations in place for the with and without method in a discounted cash flow model for the AUC Title IV intangible asset. Evaluating management’s assumptions related to forecasted revenue and forecasted revenue with and without the accreditations in place involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the AUC business; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the Company’s discounted cash flow method, the market comparable method, and the with and without method in a discounted cash flow model.
/s/
August 6, 2026
We have served as the Company’s auditor since 1991.
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Covista Inc.
Consolidated Balance Sheets
(in thousands, except par value)
June 30, | ||||||
2026 | 2025 | |||||
Assets: | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | | $ | | ||
Restricted cash |
| |
| | ||
Accounts and financing receivables, net |
| |
| | ||
Prepaid expenses and other current assets |
| |
| | ||
Total current assets |
| |
| | ||
Noncurrent assets: |
|
| ||||
Property and equipment, net | | | ||||
Operating lease assets |
| |
| | ||
Deferred income taxes |
| — |
| | ||
Intangible assets, net |
| |
| | ||
Goodwill |
| |
| | ||
Other assets, net | | | ||||
Total noncurrent assets |
| |
| | ||
Total assets | $ | | $ | | ||
Liabilities and shareholders' equity: |
| |||||
Current liabilities: |
| |||||
Accounts payable | $ | | $ | | ||
Accrued payroll and benefits |
| |
| | ||
Accrued liabilities |
| |
| | ||
Deferred revenue |
| |
| | ||
Current operating lease liabilities |
| |
| | ||
Current portion of long-term debt |
| |
| | ||
Total current liabilities |
| |
| | ||
Noncurrent liabilities: |
|
|
|
| ||
Long-term debt |
| |
| | ||
Long-term operating lease liabilities |
| |
| | ||
Deferred income taxes |
| |
| | ||
Other liabilities |
| |
| | ||
Total noncurrent liabilities |
| |
| | ||
Total liabilities |
| |
| | ||
Commitments and contingencies |
|
|
|
| ||
Shareholders' equity: |
|
|
|
| ||
Common stock, $ |
| |
| | ||
Additional paid-in capital |
| |
| | ||
Retained earnings |
| |
| | ||
Accumulated other comprehensive loss |
| ( |
| ( | ||
Treasury stock, at cost, |
| ( |
| ( | ||
Total shareholders' equity |
| |
| | ||
Total liabilities and shareholders' equity | $ | | $ | | ||
See accompanying Notes to Consolidated Financial Statements.
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Covista Inc.
Consolidated Statements of Income
(in thousands, except per share data)
Year Ended June 30, | |||||||||
2026 | 2025 | 2024 | |||||||
Revenue | $ | | $ | | $ | | |||
Operating cost and expense: |
|
| |||||||
Cost of educational services |
| |
| |
| | |||
Student services and administrative expense |
| |
| |
| | |||
Restructuring expense |
| |
| |
| | |||
Business integration expense |
| — |
| — |
| | |||
Total operating cost and expense |
| |
| |
| | |||
Operating income |
| |
| |
| | |||
Interest expense |
| ( |
| ( |
| ( | |||
Other income, net |
| |
| |
| | |||
Income from continuing operations before income taxes |
| |
| |
| | |||
Provision for income taxes |
| ( |
| ( |
| ( | |||
Income from continuing operations |
| |
| |
| | |||
Discontinued operations: |
| ||||||||
(Loss) income from discontinued operations before income taxes |
| ( |
| |
| ( | |||
Benefit from (provision for) income taxes |
| |
| ( |
| ( | |||
(Loss) income from discontinued operations |
| ( |
| |
| ( | |||
Net income and comprehensive income | $ | | $ | | $ | | |||
Earnings (loss) per share: |
| ||||||||
Basic: |
| ||||||||
Continuing operations | $ | | $ | | $ | | |||
Discontinued operations | $ | ( | $ | | $ | ( | |||
Total basic earnings per share | $ | | $ | | $ | | |||
Diluted: |
| ||||||||
Continuing operations | $ | | $ | | $ | | |||
Discontinued operations | $ | ( | $ | | $ | ( | |||
Total diluted earnings per share | $ | | $ | | $ | | |||
Weighted-average shares outstanding: | |||||||||
Basic shares | | | | ||||||
Diluted shares | | | | ||||||
See accompanying Notes to Consolidated Financial Statements.
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Covista Inc.
Consolidated Statements of Cash Flows
(in thousands)
Year Ended June 30, | |||||||||
2026 | 2025 | 2024 | |||||||
Operating activities: | |||||||||
Net income | $ | | $ | | $ | | |||
Loss (income) from discontinued operations |
| |
| ( |
| | |||
Income from continuing operations | | | | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
| ||||||
Stock-based compensation |
| |
| |
| | |||
Amortization and impairments to operating lease assets | | | | ||||||
Depreciation |
| |
| |
| | |||
Amortization of acquired intangible assets |
| |
| |
| | |||
Amortization and write-off of debt discount and issuance costs | | | | ||||||
Provision for credit losses | | | | ||||||
Deferred income taxes |
| |
| |
| | |||
Loss on disposals and impairments of property and equipment |
| |
| |
| | |||
Gain on investments | ( | ( | ( | ||||||
Loss on assets held for sale | — | | | ||||||
Changes in assets and liabilities: |
|
|
| ||||||
Accounts and financing receivables |
| ( |
| ( |
| ( | |||
Prepaid expenses and other current assets |
| |
| |
| ( | |||
Cloud computing implementation assets | ( | ( | ( | ||||||
Accounts payable |
| |
| |
| | |||
Accrued payroll and benefits | | | | ||||||
Accrued liabilities |
| ( |
| ( |
| | |||
Deferred revenue |
| |
| |
| | |||
Operating lease liabilities | ( | ( | ( | ||||||
Other assets and liabilities |
| |
| ( |
| ( | |||
Net cash provided by operating activities-continuing operations |
| |
| |
| | |||
Net cash (used in) provided by operating activities-discontinued operations |
| ( |
| |
| | |||
Net cash provided by operating activities |
| |
| |
| | |||
Investing activities: |
|
| |||||||
Capital expenditures |
| ( |
| ( |
| ( | |||
Proceeds from sales of marketable securities | | | | ||||||
Purchases of marketable securities |
| ( |
| ( |
| ( | |||
Payment for investment in business |
| ( |
| — |
| — | |||
Proceeds from sale of assets |
| — |
| |
| — | |||
Net cash used in investing activities |
| ( |
| ( |
| ( | |||
Financing activities: |
|
| |||||||
Proceeds from exercise of stock options |
| |
| |
| | |||
Employee taxes paid on withholding shares |
| ( |
| ( |
| ( | |||
Proceeds from stock issued under Colleague Stock Purchase Plan |
| |
| |
| | |||
Repurchases of common stock for treasury |
| ( |
| ( |
| ( | |||
Borrowings under long-term debt obligations |
| |
| |
| | |||
Repayments under long-term debt obligations |
| ( |
| ( |
| ( | |||
Payment of debt issuance and extinguishment costs |
| ( |
| — |
| — | |||
Net cash used in financing activities |
| ( |
| ( |
| ( | |||
Net increase (decrease) in cash, cash equivalents and restricted cash |
| |
| ( |
| ( | |||
Cash, cash equivalents and restricted cash at beginning of period |
| |
| |
| | |||
Cash, cash equivalents and restricted cash at end of period | $ | | $ | | $ | | |||
Supplemental cash flow disclosure: | |||||||||
Interest paid | $ | | $ | | $ | | |||
Income taxes paid, net | $ | | $ | | $ | | |||
Non-cash investing and financing activities: | |||||||||
Accrued capital expenditures | $ | | $ | | $ | | |||
Accrued excise tax on share repurchases | $ | | $ | | $ | | |||
See accompanying Notes to Consolidated Financial Statements.
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Covista Inc.
Consolidated Statements of Shareholders’ Equity
(in thousands)
Accumulated | ||||||||||||||||||||||
Additional | Other | |||||||||||||||||||||
Common Stock | Paid-In | Retained | Comprehensive | Treasury Stock | ||||||||||||||||||
Shares | Amount | Capital | Earnings | Loss | Shares | Amount | Total | |||||||||||||||
June 30, 2023 | | $ | | $ | | $ | | $ | ( | | $ | ( | $ | | ||||||||
Net income |
|
|
| |
|
|
|
| | |||||||||||||
Stock-based compensation |
|
|
| |
|
|
|
|
| | ||||||||||||
Net activity from stock-based compensation awards |
| |
| |
| |
|
|
| |
| ( |
| | ||||||||
Proceeds from stock issued under Colleague Stock Purchase Plan |
|
|
| |
| ( |
|
| ( |
| |
| | |||||||||
Repurchases of common stock for treasury |
|
|
|
|
|
| |
| ( |
| ( | |||||||||||
June 30, 2024 |
| |
| |
| |
| |
| ( |
| |
| ( |
| | ||||||
Net income |
|
|
|
| |
|
|
|
| | ||||||||||||
Stock-based compensation |
|
|
| |
|
|
|
|
| | ||||||||||||
Net activity from stock-based compensation awards |
| |
| |
| |
|
|
| |
| ( |
| ( | ||||||||
Proceeds from stock issued under Colleague Stock Purchase Plan |
|
|
| |
|
|
| ( |
| |
| | ||||||||||
Repurchases of common stock for treasury |
|
|
|
|
|
| |
| ( |
| ( | |||||||||||
June 30, 2025 |
| |
| |
| |
| |
| ( |
| |
| ( |
| | ||||||
Net income |
|
|
|
| |
|
|
|
| | ||||||||||||
Stock-based compensation |
|
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| |
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| | ||||||||||||
Net activity from stock-based compensation awards |
| | | | | ( |
| ( | ||||||||||||||
Proceeds from stock issued under Colleague Stock Purchase Plan |
|
|
| | ( | |
| | ||||||||||||||
Repurchases of common stock for treasury |
| | ( |
| ( | |||||||||||||||||
June 30, 2026 | | $ | | $ | | $ | | $ | ( | | $ | ( | $ | | ||||||||
See accompanying Notes to Consolidated Financial Statements.
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Covista Inc.
Notes to Consolidated Financial Statements
Table of Contents
Note | Page | |
1 | Nature of Operations | 59 |
2 | Summary of Significant Accounting Policies | 59 |
3 | Discontinued Operations | 63 |
4 | Revenue | 63 |
5 | Restructuring Expense | 65 |
6 | Other Income, Net | 66 |
7 | Income Taxes | 66 |
8 | Earnings per Share | 70 |
9 | Accounts and Financing Receivables | 70 |
10 | Property and Equipment, Net | 72 |
11 | Leases | 73 |
12 | Goodwill and Intangible Assets | 74 |
13 | Debt | 76 |
14 | Share Repurchases | 79 |
15 | Stock-Based Compensation | 79 |
16 | Employee Benefit Plans | 81 |
17 | Fair Value Measurements | 82 |
18 | Commitments and Contingencies | 83 |
19 | Segment Information | 84 |
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1. Nature of Operations
In this Annual Report on Form 10-K, Covista Inc. (formerly known as Adtalem Global Education Inc.), together with its subsidiaries, is collectively referred to as “Covista,” “we,” “our,” “us,” or similar references. Covista reports on a fiscal year period ending on June 30.
Covista is America’s largest healthcare educator. Our schools consist of Chamberlain University (“Chamberlain”), Walden University (“Walden”), American University of the Caribbean School of Medicine (“AUC”), Ross University School of Medicine (“RUSM”), and Ross University School of Veterinary Medicine (“RUSVM”). AUC, RUSM, and RUSVM are collectively referred to as the “medical and veterinary schools.” “Home Office” includes activities not allocated to a reportable segment. See Note 19 “Segment Information” for information on our reportable segments.
2. Summary of Significant Accounting Policies
For each accounting topic that is addressed in its own note, the description of the accounting policy may be found in the related note. Other significant accounting policies are described below.
Principles of Consolidation
The Consolidated Financial Statements include the accounts of Covista and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. We have prepared the Consolidated Financial Statements in accordance with U.S. generally accepted accounting principles (“GAAP”). Unless otherwise noted, amounts presented within the Notes to Consolidated Financial Statements refer to our continuing operations. Unless indicated, or the context requires otherwise, references to years refer to Covista’s fiscal years. Certain items presented in tables may not sum due to rounding.
Business integration expense was $
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less. The carrying value of cash and cash equivalents approximates fair value. We maintain cash and cash equivalent balances that exceed federally insured limits. We have not experienced any losses on our cash and cash equivalents.
Restricted Cash
Restricted cash represents amounts received from federal and state governments under various student aid grant and loan programs and such restricted funds are held in separate bank accounts. Once the financial aid authorization and disbursement process for the student has been completed, the funds are transferred to unrestricted accounts, and these funds then become available for use in Covista’s operations. This authorization and disbursement process that precedes the transfer of funds generally occurs within the period of the academic term for which such funds were authorized.
Restricted cash also includes an imprest cash balance used for Covista’s self-insured employee medical benefits program.
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Property and Equipment
Property and equipment is recorded at cost less accumulated depreciation. Cost includes additions and those improvements that enhance performance, increase the capacity, or lengthen the useful lives of the assets. Purchases of computer software, including external costs and certain internal costs (including payroll and payroll-related costs of employees) directly associated with developing computer software applications for internal use, are capitalized. Assets under construction are reflected in construction in progress until they are placed into service for their intended use. Depreciation is recognized on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the asset or lease term. Repairs and maintenance costs are expensed as incurred. Upon sale or retirement of an asset, the accounts are relieved of the cost and the related accumulated depreciation, with any resulting gain or loss included in income. See Note 10 “Property and Equipment, Net” for additional information, including useful lives by asset category.
Goodwill and Intangible Assets
Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. Our annual testing date is May 31.
We have the option to assess goodwill for impairment by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is determined that the reporting unit fair value is more likely than not less than its carrying value, or if we do not elect the option to perform an initial qualitative assessment, we perform a quantitative assessment of the reporting unit’s fair value. If the carrying value of a reporting unit containing the goodwill exceeds the fair value of that reporting unit, an impairment loss is recognized equal to the difference between the carrying value of the reporting unit and its fair value, not to exceed the carrying value of goodwill. We also have the option to perform a qualitative assessment to test indefinite-lived intangible assets for impairment by determining whether it is more likely than not that the indefinite-lived intangible assets are impaired. If it is determined that the indefinite-lived intangible asset is more likely than not impaired, or if we do not elect the option to perform an initial qualitative assessment, we perform a quantitative assessment of the indefinite-lived intangible assets. If the carrying value of the indefinite-lived intangible assets exceeds their fair value, an impairment loss is recognized to the extent the carrying value exceeds fair value.
For intangible assets with finite lives, we evaluate for potential impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset or asset group, the amount of the impairment is the difference between the carrying amount and the fair value of the asset or asset group. Intangible assets with finite lives are amortized over their expected economic lives, which is
All intangible assets and certain goodwill are being amortized for tax reporting purposes over statutory lives.
Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions. Management bases its fair value estimates on assumptions it believes to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates. If economic conditions deteriorate, or operating performance of our reporting units do not meet expectations such that we revise our long-term forecasts, we may recognize impairments of goodwill and other intangible assets in future periods. See Note 12 “Goodwill and Intangible Assets” for additional information on our goodwill and intangible assets impairment analysis.
Curriculum Development Costs
Certain costs incurred to create course and educational material for a program offering are capitalized as curriculum development assets within other assets, net on the Consolidated Balance Sheets. Costs are capitalized for new programs or products, or the content being developed enhances, updates, or improves current programs, curriculum, or products, so long as the cost incurred extends the useful life of the existing curriculum and course content. Costs that are capitalized include payroll and payroll-related costs for employees who spend time producing content and external vendor costs related to the project. Covista begins capitalizing costs during the content development phase, which includes time to
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develop course materials based on the requirements defined in the planning phase. Curriculum development assets are amortized on a straight-line basis over the estimated useful life, which is generally to
Cloud Computing Implementation Costs
For cloud computing arrangements that are a service contract, we capitalize certain implementation costs incurred, including external costs and certain internal costs (including payroll and payroll-related costs of employees), during the development stage of implementing the cloud computing hosting arrangement. Capitalized costs related to cloud computing implementation costs are included within prepaid expenses and other current assets and other assets, net on the Consolidated Balance Sheets. We expense costs as incurred during the preliminary planning and post-implementation stages. Capitalized implementation costs are amortized on a straight-line basis over the contractual term of the cloud computing arrangement, which includes renewal options that are reasonably certain to be exercised, which is generally
Impairment of Long-Lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset or asset group, the amount of the impairment is the difference between the carrying amount and the fair value of the asset or asset group. Events that may trigger an impairment analysis could include a decision by management to exit a market or a line of business or to consolidate operating locations.
Treasury Stock
Shares that are repurchased by Covista under its share repurchase programs are recorded as treasury stock at cost and result in a reduction in shareholders’ equity. See Note 14 “Share Repurchases” for additional information.
From time to time, shares of our common stock are delivered back to Covista under a swap arrangement resulting from employees’ exercise of stock options pursuant to the terms of the Covista’s stock-based incentive plans (see Note 15 “Stock-Based Compensation”). In addition, shares of our common stock are delivered back to Covista for payment of withholding taxes from employees for vesting of stock-based compensation awards. These shares are recorded as treasury stock at cost and result in a reduction in shareholders’ equity.
Treasury shares are reissued at market value, less a
Earnings per Share
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income by diluted weighted-average number of shares outstanding during the period. Diluted EPS considers the impact of potentially dilutive shares, except in periods in which there is a loss from continuing operations, because the inclusion of the potential common shares would have an antidilutive effect. Dilutive shares are computed using the treasury stock method and reflect the additional shares that would be outstanding if dilutive stock-based grants were exercised or vested during the period.
Income Taxes
Covista accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Covista also recognizes future tax benefits
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associated with tax loss and credit carryforwards as deferred tax assets. Covista’s deferred tax assets are reduced by a valuation allowance, when in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Covista measures deferred tax assets and liabilities using enacted tax rates in effect for the year in which Covista expects to recover or settle the temporary differences. The effect of a change in tax rates on deferred taxes is recognized in the period that the change is enacted. Covista reduces its net tax assets for the estimated additional tax and interest that may result from tax authorities disputing uncertain tax positions Covista has taken.
Restructuring Charges
Restructuring charges include costs for severance and related benefits for workforce reductions, impairments on operating lease assets, losses on disposals of property and equipment related to campus and administrative office consolidations, and contract termination costs (see Note 5 “Restructuring Expense”). When estimating the costs of exiting lease space, estimates are made which could differ materially from actual results and result in additional restructuring charges or reversals in future periods.
Advertising Costs
Advertising costs are expensed when incurred and totaled $
Foreign Currency Translation
The financial position and results of operations of the AUC, RUSM, and RUSVM Caribbean operations are measured using the U.S. dollar as the functional currency. As such, there is no translation gain or loss associated with these operations. Translation adjustments for foreign subsidiaries whose functional currencies were previously their respective currencies are suspended in accumulated other comprehensive loss with a balance of $
Recent Accounting Standards
In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-11: “Interim Reporting (Topic 270): Narrow-Scope Improvements.” The guidance was issued to improve the guidance in Topic 270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. The guidance also provides additional guidance on what disclosures should be provided in interim reporting periods. The guidance is effective on a prospective or retrospective basis for financial statements issued for fiscal years beginning after December 15, 2027, and interim reporting periods within fiscal years beginning after December 15, 2028. Early adoption of the guidance is permitted. We do not expect the guidance will have a material impact on Covista’s Consolidated Financial Statements or disclosures.
In September 2025, the FASB issued ASU No. 2025-06: “Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” The guidance was issued to modernize the accounting for software costs. The guidance is effective on a prospective, modified, or a retrospective transition approach for financial statements issued for fiscal years beginning after December 15, 2027, and interim reporting periods within those fiscal years. Early adoption of the guidance is permitted. We are currently evaluating the impact the guidance will have on Covista’s Consolidated Financial Statements.
In July 2025, the FASB issued ASU No. 2025-05: “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets.” The guidance was issued to provide a practical expedient to measure credit losses on current accounts receivable and current contract assets. The guidance is effective prospectively for financial statements issued for fiscal years beginning after December 15, 2025, and interim reporting periods within those fiscal years. Early adoption of the guidance is permitted. We do not expect the guidance will have a material impact on Covista’s Consolidated Financial Statements.
In November 2024, the FASB issued ASU No. 2024-03: “Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The guidance
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was issued to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions as well as disclosures about selling expenses. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2026 and interim reporting periods within fiscal years beginning after December 15, 2027. The amendments should be applied prospectively, however retrospective application is permitted. Early adoption of the amendments is permitted, including adoption in an interim reporting period. The amendments will expand our footnote disclosures to include a disaggregation of expenses in accordance with the amendments but will not otherwise impact Covista’s Consolidated Financial Statements.
In December 2023, the FASB issued ASU No. 2023-09: “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The guidance was issued to enhance the transparency and decision usefulness of income tax disclosures by requiring entities to provide additional information in the rate reconciliation and additional disclosures about income taxes paid. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2024. The amendments should be applied prospectively, however retrospective application is permitted. We adopted this guidance prospectively in the fourth quarter of fiscal year 2026, which expanded our income tax footnote disclosures to provide additional information in the rate reconciliation and regarding income taxes paid. This guidance did not otherwise impact Covista’s Consolidated Financial Statements. See Note 7 “Income Taxes” for these disclosures.
We reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our Consolidated Financial Statements or disclosures.
3. Discontinued Operations
On December 11, 2018, Covista sold DeVry University to Cogswell Education, LLC (“Cogswell”) for de minimis consideration. The purchase agreement includes an earn-out entitling Covista to payments of up to $
We had a loss from discontinued operations of $
4. Revenue
Revenue is recognized when control of the promised goods or services is transferred to our customers (students), in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
The following tables disaggregate revenue by source (in thousands):
Year Ended June 30, 2026 | ||||||||||||
Chamberlain | Walden |
| Medical and | Consolidated | ||||||||
Tuition and fees |
| $ | |
| $ | |
| $ | |
| $ | |
Other | | | | | ||||||||
Total |
| $ | |
| $ | |
| $ | |
| $ | |
Year Ended June 30, 2025 | ||||||||||||
Chamberlain | Walden |
| Medical and | Consolidated | ||||||||
Tuition and fees | $ | |
| $ | |
| $ | |
| $ | | |
Other | | | | | ||||||||
Total |
| $ | |
| $ | |
| $ | |
| $ | |
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Year Ended June 30, 2024 | ||||||||||||
Chamberlain | Walden |
| Medical and | Consolidated | ||||||||
Tuition and fees | $ | |
| $ | |
| $ | |
| $ | | |
Other | | | | | ||||||||
Total |
| $ | |
| $ | |
| $ | |
| $ | |
In addition, see Note 19 “Segment Information” for a disaggregation of revenue by geographical region.
Performance Obligations and Revenue Recognition
Tuition and fees: The majority of revenue is derived from tuition and fees, which is recognized on a straight-line basis over the academic term as instruction is delivered.
Other: Other revenue consists of housing and other miscellaneous services. Other revenue is recognized over the period in which the applicable performance obligation is satisfied.
Arrangements for payment are agreed to prior to registration of the student’s first academic term. The majority of U.S. students obtain Title IV or other financial aid resulting in institutions receiving a significant amount of the transaction price at the beginning of the academic term. Students not utilizing Title IV or other financial aid funding may pay after the academic term is complete.
Transaction Price
Revenue, or transaction price, is measured as the amount of consideration expected to be received in exchange for transferring goods or services.
Students may receive scholarships, discounts, or refunds, which gives rise to variable consideration. The amounts of scholarships or discounts are generally applied to individual student accounts when such amounts are awarded. Therefore, the transaction price is immediately reduced directly by these scholarships or discounts from the amount of the standard tuition rate charged. Scholarships and discounts that are only applied to future tuition charged are considered a separate performance obligation if they represent a material right in accordance with ASC 606. In those instances, we defer the value of the related performance obligation associated with the future scholarship or discount based on estimates of future redemption informed by our historical experience of student persistence toward completion of study.
Upon withdrawal, a student may be eligible to receive a refund, or partial refund, the amount of which is dependent on the timing of the withdrawal during the academic term. If a student withdraws prior to completing an academic term, federal and state regulations and accreditation criteria permit Covista to retain a set percentage of the total tuition received from such student, which varies with, but generally equals or exceeds, the percentage of the academic term completed by such student. Payment amounts received by Covista in excess of such set percentages of tuition are refunded to the student or the appropriate funding source. For contracts with similar characteristics and historical data on refunds, the expected value method is applied in determining the variable consideration related to refunds. Estimates of Covista’s expected refunds are determined at the outset of each academic term, based upon actual refunds in previous academic terms. Reserves related to refunds are presented as refund liabilities within accrued liabilities on the Consolidated Balance Sheets. All refunds are netted against revenue during the applicable academic term.
Management reassesses collectability on a student-by-student basis throughout the period revenue is recognized. This reassessment is based upon new information and changes in facts and circumstances relevant to a student’s ability to pay. Management also reassesses collectability when a student withdraws from the institution and has unpaid tuition charges. Such unpaid charges do not meet the threshold of reasonably collectible and are recognized as revenue on a cash basis.
Contract Balances
Students are billed at the beginning of each academic term and payment is due at that time. Covista’s performance obligation is to provide educational services in the form of instruction during the academic term and to provide for any scholarships or discounts that are deemed a material right under ASC 606. As instruction is provided or the deferred value
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of material rights are recognized, deferred revenue is reduced. A significant portion of student payments are from Title IV financial aid and other programs and are generally received during the first month of the respective academic term. For students utilizing Covista’s credit extension programs (see Note 9 “Accounts and Financing Receivables”), payments are generally received after the academic term, and the corresponding performance obligation, is complete. When payments are received, accounts and financing receivables are reduced.
Deferred revenue within current liabilities is $
The difference between the opening and closing balances of deferred revenue includes decreases from revenue recognized during the period, increases from charges related to the start of academic terms beginning during the period, increases from payments received related to academic terms commencing after the end of the period, and increases from recognizing additional performance obligations for material rights during the period.
5. Restructuring Expense
During the year ended June 30, 2026, Covista recorded restructuring expense primarily driven by workforce reductions and prior real estate consolidations at Covista’s home office. We continue to incur restructuring charges or reversals related to exited leased space from previous restructuring actions. During the year ended June 30, 2025, Covista recorded restructuring expense primarily driven by workforce reductions, costs to exit certain course offerings, and prior real estate consolidations at Covista’s home office. During the year ended June 30, 2024, Covista recorded restructuring expense primarily driven by prior real estate consolidations at Covista’s home office. When estimating costs of exiting lease space, estimates are made which could differ materially from actual results and may result in additional restructuring charges or reversals in future periods. Termination benefit charges represent severance pay and benefits for employees impacted by workforce reductions.
Year Ended June 30, 2026 | |||||||||
Real Estate | Termination | Total | |||||||
Chamberlain | $ | |
| $ | |
| $ | | |
Walden | |
| |
| | ||||
Medical and Veterinary | |
| |
| | ||||
Home Office | |
| |
| | ||||
Total | $ | | $ | | $ | | |||
Year Ended June 30, 2025 | |||||||||
Real Estate | Termination | Total | |||||||
Chamberlain | $ | |
| $ | |
| $ | | |
Medical and Veterinary | |
| |
| | ||||
Home Office | |
| |
| | ||||
Total | $ | | $ | | $ | | |||
Year Ended June 30, 2024 | |||||||||
Real Estate | Termination | Total | |||||||
Walden | $ | ( |
| $ | |
| $ | ( | |
Medical and Veterinary | |
| |
| | ||||
Home Office | |
| |
| | ||||
Total | $ | | $ | | $ | | |||
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The following table summarizes the separation and restructuring plan activity for the years ended June 30, 2025 and 2026, for which cash payments are required (in thousands):
Liability balance as of June 30, 2024 | $ | — | |
Increase in liability (termination and other charges) |
| | |
Reduction in liability (payments and adjustments) |
| ( | |
Liability balance as of June 30, 2025 |
| — | |
Increase in liability (termination and other charges) |
| | |
Reduction in liability (payments and adjustments) |
| ( | |
Liability balance as of June 30, 2026 | $ | |
These liability balances are recorded within accrued liabilities on the Consolidated Balance Sheets.
6. Other Income, Net
Other income, net consisted of the following (in thousands):
Year Ended June 30, | |||||||||
2026 | 2025 | 2024 | |||||||
Interest and dividend income | $ | | $ | | $ | | |||
Investment gain |
| |
| |
| | |||
Other income, net | $ | | $ | | $ | | |||
Investment gain includes trading gains and losses related to the rabbi trust used to fund nonqualified deferred compensation plan obligations (see Note 16 “Employee Benefit Plans” for additional information).
7. Income Taxes
Income from continuing operations before income taxes, classified by source of income, was as follows (in thousands):
Year Ended June 30, | |||||||||
2026 | 2025 | 2024 | |||||||
Domestic | $ | | $ | | $ | | |||
Foreign |
| |
| |
| | |||
Total | $ | | $ | | $ | | |||
The components of the provision for income taxes were as follows (in thousands):
Year Ended June 30, | |||||||||
| 2026 | 2025 | 2024 | ||||||
Current tax provision (benefit): |
| ||||||||
U.S. federal | $ | ( | $ | | $ | | |||
State and local |
| |
| |
| | |||
Foreign |
| |
| ( |
| | |||
Total current |
| |
| |
| | |||
Deferred tax provision: | |||||||||
U.S. federal |
| |
| |
| | |||
State and local |
| |
| |
| | |||
Foreign |
| |
| |
| | |||
Total deferred |
| |
| |
| | |||
Provision for income taxes | $ | | $ | | $ | | |||
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Pursuant to ASU 2023-09, for the year ended June 30, 2026, the effective tax rate differs from the statutory tax rates as follows (in thousands):
Year Ended June 30, | ||||||
2026 | ||||||
Amount | Percent | |||||
Income tax at statutory rate | $ | | | % | ||
State and local income taxes, net of federal income tax effect(1) |
| |
| | % | |
Foreign tax effects: |
|
| ||||
Barbados: | ||||||
Statutory tax rate differential | ( | ( | % | |||
Local tax incentive rate differential |
| ( |
| ( | % | |
Qualified domestic minimum top-up tax |
| |
| | % | |
St Kitts: |
|
| ||||
Statutory tax rate differential |
| |
| | % | |
Local tax incentive rate differential |
| ( |
| ( | % | |
Other foreign jurisdictions | | | % | |||
Effect of cross-border tax laws | | | % | |||
Tax credits | ( | ( | % | |||
Changes in valuation allowances | | | % | |||
Nontaxable or nondeductible items: | ||||||
Limitations on executive compensation | | | % | |||
Stock-based compensation | ( | ( | % | |||
Other | | | % | |||
Changes in unrecognized tax benefits | ( | ( | % | |||
Other adjustments |
| |
| | % | |
$ | |
| | % | ||
| (1) | For the year ended June 30, 2026, state and local taxes in made up the majority (greater than 50%) of the tax effect in this category. |
Consistent with our presentation prior to the adoption of ASU 2023-09, for the years ended June 30, 2025 and 2024, the effective tax rate differs from the statutory tax rates as follows (in thousands):
Year Ended June 30, | ||||||||||||
2025 | 2024 | |||||||||||
Amount | Percent | Amount | Percent | |||||||||
Income tax at statutory rate | $ | | | % | $ | | | % | ||||
Lower rates on foreign operations |
| ( |
| ( | % |
| ( |
| ( | % | ||
State income taxes |
| |
| | % |
| |
| | % | ||
Research and development tax credits | ( | ( | % | ( |
| ( | % | |||||
Change in valuation allowance | | | % | ( |
| ( | % | |||||
Permanent taxable items |
| ( |
| ( | % |
| ( |
| ( | % | ||
Limitations on executive compensation |
| |
| | % |
| |
| | % | ||
Foreign tax provisions under GILTI | | | % |
| | | % | |||||
Change in unrecognized tax benefits | ( | ( | % |
| ( | ( | % | |||||
Other |
| ( |
| ( | % |
| |
| | % | ||
$ | |
| | % | $ | |
| | % | |||
Our effective tax rate from continuing operations was
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outside the U.S., tax incentives, tax credits related to research and development expenditures, changes in valuation allowance, changes in unrecognized tax benefits, and tax benefits on stock-based compensation.
Income taxes paid, net of refunds, by jurisdiction were as follows (in thousands):
Year Ended June 30, | |||
2026 | |||
U.S. Federal | $ | | |
U.S. State | | ||
Foreign |
| | |
Total | $ | | |
Deferred income tax assets and liabilities result primarily from temporary differences in the recognition of various expenses for tax and financial statement purposes, and from the recognition of the tax benefits of net operating loss carryforwards.
June 30, | ||||||
2026 | 2025 | |||||
Employee benefits | $ | | $ | | ||
Stock-based compensation |
| |
| | ||
Receivable reserve |
| |
| | ||
Capitalized research and experimental costs |
| |
| | ||
Operating lease liabilities | | | ||||
Accrued and other liabilities |
| |
| | ||
Loss and credit carryforwards, net |
| |
| | ||
Less: valuation allowance | ( | | ||||
Gross deferred tax assets |
| |
| | ||
Depreciation |
| ( |
| ( | ||
Deferred taxes on unremitted foreign earnings | ( | ( | ||||
Capitalized research and experimental costs | ( | | ||||
Amortization of intangible assets |
| ( |
| ( | ||
Operating lease assets | ( | ( | ||||
Prepaid expenses and other assets | ( | | ||||
Gross deferred tax liability |
| ( |
| ( | ||
Net deferred tax (liability) asset | $ | ( | $ | | ||
Tax net operating loss (tax effected), interest (tax effected), and credit carryforwards, were as follows (in thousands):
June 30, | Years of Expiration | ||||||
2026 | Beginning | Ending | |||||
U.S. credit carryforwards | $ | | |||||
State net operating loss carryforwards |
| |
|
| |||
State interest expense carryforwards | | no expiration | |||||
Foreign net operating loss carryforwards |
| |
|
| |||
Total loss and credit carryforwards, net | $ | |
| ||||
As of June 30, 2026, Covista had $
RUSM and RUSVM each have agreements with their respective domestic governments that exempt them from local income taxation. RUSM has an exemption in Barbados until 2039 and RUSVM has an exemption in St. Kitts until 2038.
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Covista does not assert that the accumulated undistributed earnings of its foreign subsidiaries are indefinitely reinvested in foreign jurisdictions. Accrued state income and foreign withholding taxes on such undistributed earnings were not material.
The changes in valuation allowances were as follows (in thousands):
Year Ended June 30, | |||||||||
2026 | 2025 | 2024 | |||||||
Balance at beginning of period | $ | | $ | | $ | | |||
Charged to costs and expenses |
| |
| |
| | |||
Deductions |
| |
| |
| ( | |||
Balance at end of period | $ | | $ | | $ | | |||
Covista reviews the realizability of its deferred tax assets and related valuation allowances on a quarterly basis, or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset are considered, along with any other positive or negative evidence. A valuation allowance is established when, based on the weight of available evidence, it is more likely than not that all or a portion of a deferred tax asset will not be realized. The valuation allowance on our deferred tax assets was $
The changes in unrecognized tax benefits were as follows (in thousands):
Year Ended June 30, | |||||||||
2026 | 2025 | 2024 | |||||||
Balance at beginning of period | $ | | $ | | $ | | |||
Increases from positions taken during prior periods |
| |
| |
| | |||
Decreases from positions taken during prior periods |
| ( |
| — |
| ( | |||
Increases from positions taken during the current period |
| |
| |
| | |||
Reductions due to lapse of statute |
| ( |
| ( |
| ( | |||
Balance at end of period | $ | | $ | | $ | | |||
As of June 30, 2026 and 2025, the total amount of gross unrecognized tax benefits for uncertain tax positions was $
Covista files tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions based on existing tax laws and incentives. Covista remains generally subject to examination in the U.S. for years beginning on or after July 1, 2022; in various states for years beginning on or after July 1, 2021; and in our significant foreign jurisdictions for years beginning on or after July 1, 2019.
In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which introduced substantial changes to U.S. tax provisions. The most relevant provisions to Covista for fiscal year 2026 include allowing accelerated tax deductions for qualified property and research and development expenditures. The impacts of OBBBA were not material to the income tax provision for the year ended June 30, 2026.
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8. Earnings per Share
The following table sets forth the computations of basic and diluted earnings per share and antidilutive shares (in thousands, except per share data):
Year Ended June 30, | |||||||||
2026 | 2025 | 2024 | |||||||
Numerator: | |||||||||
Net income (loss): |
|
|
| ||||||
Continuing operations | $ | | $ | | $ | | |||
Discontinued operations | ( | | ( | ||||||
Net income | $ | | $ | | $ | | |||
Denominator: | |||||||||
Weighted-average basic shares outstanding | |
| |
| | ||||
Effect of dilutive stock awards | |
| |
| | ||||
Weighted-average diluted shares outstanding | |
| |
| | ||||
Earnings (loss) per share: | |||||||||
Basic: | |||||||||
Continuing operations | $ | | $ | | $ | | |||
Discontinued operations | $ | ( | $ | | $ | ( | |||
Total basic earnings per share | $ | | $ | | $ | | |||
Diluted: | |||||||||
Continuing operations | $ | | $ | | $ | | |||
Discontinued operations | $ | ( | $ | | $ | ( | |||
Total diluted earnings per share | $ | | $ | | $ | | |||
Weighted-average antidilutive shares | | | | ||||||
9. Accounts and Financing Receivables
Our accounts receivables relate to student balances occurring in the normal course of business. Accounts receivables have a term of less than one year and are included in accounts and financing receivables, net on our Consolidated Balance Sheets. Our financing receivables relate to credit extension programs, which provide students with payment terms in excess of one year and are included in accounts and financing receivables, net and other assets, net on our Consolidated Balance Sheets.
The classification of our accounts and financing receivable balances was as follows (in thousands):
June 30, 2026 | |||||||||
Gross | Allowance | Net | |||||||
Accounts receivables, current | $ | | $ | ( | $ | | |||
Financing receivables, current | | ( | | ||||||
Accounts and financing receivables, current | $ | | $ | ( | $ | | |||
Financing receivables, current | $ | | $ | ( | $ | | |||
Financing receivables, noncurrent | | ( | | ||||||
Total financing receivables | $ | | $ | ( | $ | | |||
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June 30, 2025 | |||||||||
Gross | Allowance | Net | |||||||
Accounts receivables, current | $ | | $ | ( | $ | | |||
Financing receivables, current | | ( | | ||||||
Accounts and financing receivables, current | $ | | $ | ( | $ | | |||
Financing receivables, current | $ | | $ | ( | $ | | |||
Financing receivables, noncurrent | | ( | | ||||||
Total financing receivables | $ | | $ | ( | $ | | |||
Our financing receivables relate to credit extension programs available to students at Chamberlain, AUC, RUSM, and RUSVM. These credit extension programs are designed to assist students who are unable to completely cover educational costs consisting of tuition, fees, and books, and are available only after all other student financial assistance has been applied toward those purposes. In addition, AUC, RUSM, and RUSVM allow students to finance their living expenses. Repayment plans for financing agreements are developed to address the financial circumstances of the particular student. Interest charges at rates from
Credit Quality
The primary credit quality indicator for our financing receivables is delinquency. Balances are considered delinquent when contractual payments on the loan become past due. We generally write-off financing receivable balances when they are at least 181 days past due. Payments are applied first to outstanding interest and then to the unpaid principal balance.
The credit quality analysis of financing receivables as of June 30, 2026 was as follows (in thousands):
Amortized Cost Basis by Origination Year | |||||||||||||||||||||
Prior | 2022 | 2023 | 2024 | 2025 | 2026 | Total | |||||||||||||||
1-30 days past due |
| $ | | $ | |
| $ | |
| $ | |
| $ | |
| $ | |
| $ | | |
31-60 days past due | | | | | | | | ||||||||||||||
61-90 days past due | | | | | | | | ||||||||||||||
91-120 days past due | | — | | | | | | ||||||||||||||
121-150 days past due | | | | | | | | ||||||||||||||
Greater than 150 days past due | | | | | | | | ||||||||||||||
Total past due | | | | | | | | ||||||||||||||
Current | | | | | | | | ||||||||||||||
Financing receivables, gross | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
Gross write-offs | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
The credit quality analysis of financing receivables as of June 30, 2025 was as follows (in thousands):
Amortized Cost Basis by Origination Year | |||||||||||||||||||||
Prior | 2021 | 2022 | 2023 | 2024 | 2025 | Total | |||||||||||||||
1-30 days past due |
| $ | | $ | |
| $ | |
| $ | |
| $ | |
| $ | |
| $ | | |
31-60 days past due | | | | | | | | ||||||||||||||
61-90 days past due | | | — | | | | | ||||||||||||||
91-120 days past due | | — | — | | | | | ||||||||||||||
121-150 days past due | | | — | | | | | ||||||||||||||
Greater than 150 days past due | | | | | | | | ||||||||||||||
Total past due | | | | | | | | ||||||||||||||
Current | | | | | | | | ||||||||||||||
Financing receivables, gross | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
Gross write-offs | $ | | $ | | $ | | $ | | $ | | $ | | $ | | |||||||
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Allowance for Credit Losses
The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in our accounts and financing receivable balances as of each balance sheet date. In evaluating the collectability of our accounts and financing receivable balances, we utilize historical events, current conditions, and reasonable and supportable forecasts about the future.
For our accounts receivables, we use historical loss rates based on an aging schedule and a student’s status to determine the allowance for credit losses. As these accounts receivables are short-term in nature, management believes a student’s status provides the best credit loss estimate, while also factoring in delinquency. Students still attending classes, recently graduated, or current on payments are more likely to pay than those who are inactive due to being on a leave of absence, withdrawing from school, or not current on payments.
For our financing receivables, we use historical loss rates based on an aging schedule. As these financing receivables are based on long-term financing agreements offered by Covista, management believes that delinquency provides the best credit loss estimate. As the financing receivable balances become further past due, it is less likely we will receive payment, causing our estimate of credit losses to increase.
The following table provides a roll-forward of the allowance for credit losses (in thousands):
Accounts | Financing | Total | |||||||
June 30, 2023 |
| $ | | $ | |
| $ | | |
Write-offs | ( | ( | ( | ||||||
Recoveries | | | | ||||||
Provision for credit losses | | | | ||||||
June 30, 2024 | | | | ||||||
Write-offs | ( | ( | ( | ||||||
Recoveries | | | | ||||||
Provision for credit losses | | | | ||||||
June 30, 2025 | | | | ||||||
Write-offs | ( | ( | ( | ||||||
Recoveries | | | | ||||||
Provision for credit losses | | | | ||||||
June 30, 2026 | $ | | $ | | $ | | |||
10. Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
June 30, | ||||||||
Useful Life | 2026 | 2025 | ||||||
Land |
| - |
| $ | | $ | | |
Buildings and improvements | 10 - | | | |||||
Leasehold improvements | | | ||||||
Furniture and equipment | 3 - | | | |||||
Software | 3 - | | | |||||
Construction in progress | - | | | |||||
Property and equipment, gross | | | ||||||
Accumulated depreciation |
| ( |
| ( | ||||
Property and equipment, net | $ | | $ | | ||||
Depreciation expense was $
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During the year ended June 30, 2024, management committed to a plan to sell a building located in Naperville, Illinois, and the building met criteria to be classified as assets held for sale. As a result, the building’s carrying value of $
11. Leases
We determine if a contract contains a lease at inception. We have entered into operating leases for academic sites, housing facilities, and office space which expire at various dates through December 2042, most of which include options to for a fee or the leases for an additional
Operating lease assets represent our right to use an underlying asset during the lease term. Operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. Operating lease assets are adjusted for any prepaid or accrued lease payments, lease incentives, initial direct costs, and impairments. Our incremental borrowing rate is utilized in determining the present value of the lease payments based upon the information available at the commencement date. Our incremental borrowing rate is determined using a secured borrowing rate for the same currency and term as the associated lease. Operating lease expense is recognized on a straight-line basis over the lease term.
The components of lease cost were as follows (in thousands):
Year Ended June 30, | |||||||||
2026 | 2025 | 2024 | |||||||
Operating lease cost | $ | | $ | | $ | | |||
Sublease income |
| ( |
| ( |
| ( | |||
Total lease cost | $ | | $ | | $ | | |||
Maturities of lease liabilities as of June 30, 2026 were as follows (in thousands):
Operating | |||
Fiscal Year | Leases | ||
2027 | $ | | |
2028 | | ||
2029 | | ||
2030 | | ||
2031 | | ||
Thereafter | | ||
Total lease payments |
| | |
Less: lease incentives not yet received | ( | ||
Less: imputed interest | ( | ||
Present value of lease liabilities | $ | | |
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Lease term and discount rate were as follows:
June 30, 2026 | |||
Weighted-average remaining operating lease term (years) | |||
Weighted-average operating lease discount rate | |||
Supplemental disclosures of cash flow information related to leases were as follows (in thousands):
Year Ended June 30, | |||||||||
2026 | 2025 | 2024 | |||||||
Cash paid for amounts in the measurement of operating lease liabilities (net of sublease and lease incentive receipts) | $ | | $ | | $ | | |||
Operating lease assets obtained in exchange for operating lease liabilities | $ | | $ | | $ | | |||
12. Goodwill and Intangible Assets
Goodwill balances by reportable segment were as follows (in thousands):
June 30, | ||||||
2026 | 2025 | |||||
Chamberlain | $ | | $ | | ||
Walden | | | ||||
Medical and Veterinary | | | ||||
Total | $ | | $ | | ||
Indefinite-lived intangible assets consisted of the following (in thousands):
June 30, | ||||||
2026 | 2025 | |||||
Title IV eligibility and accreditations | $ | | $ | | ||
Trade name |
| |
| | ||
Total | $ | | $ | | ||
Amortizable intangible assets consisted of the following (in thousands):
June 30, 2026 | June 30, 2025 | |||||||||||||
Gross Carrying | Accumulated | Gross Carrying | Accumulated | Weighted-Average | ||||||||||
Amount | Amortization | Amount | Amortization | Amortization Period | ||||||||||
Curriculum | $ | | $ | ( |
| $ | | $ | ( |
| ||||
Total | $ | | $ | ( |
| $ | | $ | ( |
| ||||
Curriculum is a finite-lived intangible asset that is amortized on a straight-line basis. Student relationships was a finite-lived intangible asset that was amortized based on the estimated retention of the students and considered the revenue and cash flow associated with those existing students. Student relationships was fully amortized as of June 30, 2024. Amortization expense for finite-lived intangible assets was $
Fiscal Year | Walden | ||
2027 | $ | | |
Total | $ | | |
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Indefinite-lived intangible assets related to trade names and Title IV eligibility and accreditations are not amortized, as there are no legal, regulatory, contractual, economic, or other factors that limit the useful life of these intangible assets to the reporting entity.
Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. There were no triggering events in fiscal year 2026 and our annual testing date is May 31.
Covista has
As of May 31, 2026, we elected to perform a qualitative assessment for all reporting units, except AUC. For the
As of May 31, 2026, we did not elect to perform a qualitative assessment for the AUC trade name and AUC Title IV eligibility and accreditation indefinite-lived intangible assets, and therefore performed a quantitative assessment of the respective fair values. In determining fair value of the AUC trade name indefinite-lived intangible asset, we used the relief-from-royalty method. The significant assumptions used in this valuation approach are the risk-adjusted discount rate of
As of May 31, 2026, we did not elect to perform a qualitative assessment for our AUC reporting unit and therefore performed a quantitative assessment of the reporting unit’s fair value. In determining fair value of the AUC reporting unit, we used the discounted cash flow method and the market comparable method. The significant assumptions used in the discounted cash flow method are the risk-adjusted discount rate of
Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions. Management bases its fair value estimates on assumptions it believes to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates. If economic conditions
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deteriorate or operating performance of our reporting units does not meet expectations such that we revise our long-term forecasts, we may recognize impairments of goodwill and other intangible assets in future periods.
13. Debt
Long-term debt consisted of the following senior secured credit facilities (in thousands):
June 30, | ||||||
2026 | 2025 | |||||
Term Loan B | $ | | $ | | ||
Revolver | | | ||||
Senior Secured Notes due 2028 |
| |
| | ||
Total principal |
| |
| | ||
Unamortized debt discount and issuance costs |
| ( |
| ( | ||
Total long-term debt | | | ||||
Less current portion | ( | | ||||
Long-term debt | $ | | $ | | ||
Scheduled future maturities of long-term debt were as follows (in thousands):
Maturity | |||
Fiscal Year | Payments | ||
2027 | $ | | |
2028 |
| | |
2029 |
| | |
2030 | | ||
2031 | | ||
Thereafter | | ||
Total | $ | | |
Credit Agreement
On August 12, 2021, in connection with the Walden acquisition, Covista entered into a credit agreement (the “Credit Agreement”) that provided for (1) a $
Term Loan B
Prior to January 26, 2024, borrowings under the Term Loan B bore interest at a rate per annum equal to, at our option, the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin ranging from
On January 26, 2024, we entered into Amendment No. 2 to Credit Agreement, which resulted in a
On August 21, 2024, we entered into Amendment No. 3 to Credit Agreement, which resulted in a further
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We made Term Loan B prepayments of $
As of March 2, 2026, borrowings under the Term Loan B bear interest at a rate per annum equal to, at our option, SOFR plus
Revolver
On August 6, 2025, we entered into Amendment No. 4 to Credit Agreement and Incremental Assumption Agreement (the “Revolver Amendment”) to (i) increase available commitments under our revolving facility by $
Borrowings under the Revolver bear interest at a rate per annum equal to SOFR plus an applicable margin ranging from
The Credit Agreement requires payment of a commitment fee equal to
Senior Secured Notes due 2028
On March 1, 2021, Covista issued $
On April 11, 2022, we repaid $
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Statements of Income for the year ended June 30, 2026 related to the write-off of unamortized debt issuance costs and certain third-party transaction costs.
Debt Discount and Issuance Costs
The $
The $
The debt issuance costs related to the Revolver are classified as other assets, net on the Consolidated Balance Sheets. In connection with the Revolver Amendment on August 6, 2025, we wrote off $
The following table summarizes the unamortized debt discount and issuance costs activity for the year ended June 30, 2026 (in thousands):
Term Loan B | Notes | Revolver | Total | |||||||||
Unamortized debt discount and issuance costs as of June 30, 2025 | $ | | $ | | $ | | $ | | ||||
Amortization of debt discount and issuance costs |
| ( |
| ( |
| ( |
| ( | ||||
Debt discount and issuance costs write-off | ( | ( | ( | ( | ||||||||
Capitalized debt discount and issuance costs |
| |
| — |
| |
| | ||||
Unamortized debt discount and issuance costs as of June 30, 2026 | $ | | $ | — | $ | | $ | | ||||
Interest Expense
Interest expense consisted of the following (in thousands):
Year Ended June 30, | |||||||||
2026 | 2025 | 2024 | |||||||
Term Loan B interest expense | $ | | $ | | $ | | |||
Notes interest expense | | | | ||||||
Revolver interest expense | | — | — | ||||||
Loss on debt extinguishment | | | | ||||||
Amortization of debt discount and issuance costs | | | | ||||||
Letters of credit fees | | | | ||||||
Other | | | | ||||||
Total | $ | | $ | | $ | | |||
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Covenants and Guarantees
The Credit Agreement contains customary covenants, including restrictions on our restricted subsidiaries’ ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interest on assets, make acquisitions, loans, advances or investments, or sell or otherwise transfer assets. Obligations under the Credit Agreement are secured by a first-priority lien on substantially all of the assets of Covista and certain of its domestic wholly-owned subsidiaries. The Credit Agreement contains customary events of default for facilities of this type. If an event of default under the Credit Agreement occurs and is continuing, the commitments thereunder may be terminated and the principal amount outstanding thereunder, together with all accrued and unpaid interest and other amounts owed thereunder, may be declared immediately due and payable.
With respect to the Revolver, the terms of the Credit Agreement require Covista to maintain a Total Net Leverage Ratio (as defined in the Credit Agreement) equal to or less than
Off-Balance Sheet Arrangements
As of June 30, 2026, Covista had $
As of June 30, 2026, Covista had $
14. Share Repurchases
The Covista Board of Directors (the “Board”) has authorized several share repurchase programs. Most recently, on December 15, 2025, we announced that the Board authorized Covista’s sixteenth share repurchase program, which allows Covista to repurchase up to $
Year Ended June 30, | |||||||||
2026 | 2025 | 2024 | |||||||
Total number of share repurchases | | | | ||||||
Total cost of share repurchases | $ | | $ | | $ | | |||
Average price paid per share | $ | | $ | | $ | | |||
As of June 30, 2026, $
15. Stock-Based Compensation
Covista’s current stock-based incentive plan is its Fourth Amended and Restated Incentive Plan of 2013, which is administered by the Compensation Committee of the Board. Under the plan, employees and Board members are eligible to receive stock options, restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), and other forms of stock awards. As of June 30, 2026,
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Stock-based compensation expense is recognized on a straight-line basis over the requisite service period. We account for forfeitures of unvested awards in the period they occur. Covista issues new shares of common stock to satisfy stock option exercises, RSU vests, and PSU vests.
Stock-based compensation expense, which is included in student services and administrative expense, and the related income tax benefit were as follows (in thousands):
Year Ended June 30, | |||||||||
2026 | 2025 | 2024 | |||||||
Stock-based compensation | $ | | $ | | $ | | |||
Income tax benefit |
| ( |
| ( |
| ( | |||
Stock-based compensation, net of tax | $ | | $ | | $ | | |||
There was
Stock Options
Beginning in fiscal year 2023, the Compensation Committee of the Board determined to no longer grant stock options. Prior to fiscal year 2023, we granted stock options generally with a
Weighted-Average | ||||||||||
Number of | Remaining | Aggregate | ||||||||
Stock | Weighted-Average | Contractual Life | Intrinsic Value | |||||||
Options | Exercise Price | (in years) | (in thousands) | |||||||
Outstanding as of June 30, 2025 |
| | $ | |
| |||||
Exercised |
| ( | |
| ||||||
Outstanding as of June 30, 2026 |
| |
| |
| $ | | |||
Exercisable as of June 30, 2026 |
| | $ | |
| $ | | |||
The fair value of stock options that vested during the years ended June 30, 2026, 2025, and 2024 was $
RSUs
We grant RSUs generally with a
Weighted-Average | |||||
Number of | Grant Date | ||||
RSUs | Fair Value | ||||
Unvested as of June 30, 2025 |
| | $ | | |
Granted |
| |
| | |
Vested |
| ( |
| | |
Forfeited |
| ( |
| | |
Unvested as of June 30, 2026 |
| | $ | | |
The weighted-average grant date fair value per share of RSUs granted in the years ended June 30, 2026, 2025, and 2024 was $
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million of unrecognized stock-based compensation expense related to unvested RSUs is expected to be recognized over a remaining weighted-average period of
PSUs
We grant PSUs with an approximate
Weighted-Average | |||||
Number of | Grant Date | ||||
PSUs | Fair Value | ||||
Unvested as of June 30, 2025 |
| | $ | | |
Incremental PSUs granted based on achievement of metrics |
| |
| | |
Granted |
| |
| | |
Vested |
| ( |
| | |
Forfeited |
| ( |
| | |
Unvested as of June 30, 2026 |
| | $ | | |
The weighted-average grant date fair value per share of PSUs granted in the years ended June 30, 2026, 2025, and 2024 was $
16. Employee Benefit Plans
401(k) Retirement Plan
All U.S. employees who meet certain eligibility requirements can participate in Covista’s 401(k) Retirement Plan. Covista makes a matching employer contribution into the 401(k) Retirement Plan of
Colleague Stock Purchase Plan
Under provisions of Covista’s current Colleague Stock Purchase Plan, any eligible employee may authorize Covista to withhold up to $
Nonqualified Deferred Compensation Plan
Covista has a nonqualified deferred compensation (“NDCP”) plan for highly compensated employees and its Board members. The plan allows participants to make tax-deferred contributions that cannot be made under the 401(k) Retirement Plan because of Internal Revenue Service limitations. The plan permits the deferral of up to
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participants who make contributions under the plan. Amounts contributed and deferred under the plan are credited or charged with the performance of investment options offered under the plan as elected by the participants. The participant’s “investments” are in a hypothetical portfolio of investments which are tracked by an administrator. Total liabilities under the NDCP plan included in accrued liabilities on the Consolidated Balance Sheets as of June 30, 2026 and 2025 were $
We have elected to fund our NDCP plan obligations through a rabbi trust. The rabbi trust is subject to creditor claims in the event of insolvency, but the assets held in the rabbi trust are not available for general corporate purposes. Amounts in the rabbi trust are placed in investments whose performance is generally consistent with the investments chosen by participants under their NDCP plan accounts, which are designated as trading securities and carried at fair value. The fair value of the investments in the rabbi trust included in prepaid expenses and other current assets on the Consolidated Balance Sheets as of June 30, 2026 and 2025 was $
17. Fair Value Measurements
Fair value is defined under GAAP as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. The following fair value hierarchy prioritizes the inputs in valuation methodologies used to measure fair value:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 – Unobservable inputs for the asset or liability. These fair value measurements require significant judgment.
The valuation methodologies used for our assets and liabilities measured at fair value and their classification in the valuation hierarchy are described below.
The carrying value of our cash, cash equivalents, and restricted cash approximates fair value because of their short-term nature and is classified as Level 1.
Covista maintains a rabbi trust with investments in stock and bond mutual funds to fund obligations under our nonqualified deferred compensation plan. The fair value of the investments in the rabbi trust included in prepaid expenses and other current assets on the Consolidated Balance Sheets as of June 30, 2026 and 2025 was $
The carrying value of the credit extension programs, which approximates their fair value, is included in accounts and financing receivables, net and other assets, net on the Consolidated Balance Sheets as of June 30, 2026 and 2025 of $
Covista has a nonqualified deferred compensation plan for highly compensated employees and its Board members. The participant’s “investments” are in a hypothetical portfolio of investments which are tracked by an administrator. Changes in the fair value of the nonqualified deferred compensation obligation are derived using quoted prices in active markets based on the market price per unit multiplied by the number of units. Total liabilities under the plan included in accrued liabilities on the Consolidated Balance Sheets as of June 30, 2026 and 2025 were $
As of June 30, 2026 and 2025, the principal amount of our Term Loan B was $
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2025, the principal amount of our Notes was $
We recorded asset impairments of $
During the second quarter of fiscal year 2026, we made a $
Covista has elected not to measure any assets or liabilities at fair value other than those required to be measured at fair value on a recurring basis. Assets measured at fair value on a nonrecurring basis include goodwill, intangible assets, and assets of businesses where the long-term value of the operations are deemed to be impaired. Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually or more frequently if circumstances arise indicating potential impairment. This impairment review was most recently completed as of May 31, 2026. See Note 12 “Goodwill and Intangible Assets” for additional information on the impairment review, including valuation techniques and assumptions.
18. Commitments and Contingencies
Covista is subject to lawsuits, administrative proceedings, regulatory reviews, and investigations associated with financial assistance programs and other matters arising in the conduct of its business and certain of these matters are discussed below. Descriptions of certain matters from prior SEC filings may not be carried forward in this report to the extent we believe such matters no longer are required to be disclosed or there has not been, to our knowledge, significant activity relating to them. As of June 30, 2026, we adequately reserved for matters that management has determined a loss is probable and that loss can be reasonably estimated. For those matters for which we have not recorded an accrual, their possible impact on Covista’s business, financial condition, or results of operations, cannot be predicted at this time. The continued defense, resolution, or settlement of any of the following matters could require us to expend significant resources and 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.
As previously disclosed, pursuant to the terms of the Stock Purchase Agreement by and between Covista and Cogswell, dated as of December 4, 2017, as amended, Covista sold DeVry University to Cogswell and Covista agreed to indemnify DeVry University for certain losses up to $
In late January 2024 and early February 2024, ED sent notices to Chamberlain, RUSM, RUSVM, and Walden that it had received Borrower Defense to Repayment (“BDR”) applications filed by students between June 23, 2022 and November 15, 2022, which ED subsequently sent to each institution for awareness and optional response. Without a similar notice, in June 2025, AUC also received BDR claims that had been filed during the same 2022 timeframe. Each application seeks forgiveness of federal student loans made to these students. In the notices received, ED indicated that: (1) the notification was occurring prior to any substantive review of the application as well as its adjudication; (2) it would send the applications to each institution in batches of
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will respond to all applications received; they believe that none properly stated an eligible claim for loan forgiveness. To date, none of Covista’s institutions have received an ED notice of BDR application approvals or recoupment intent.
19. Segment Information
We present
Chamberlain – This segment includes the operations of Chamberlain, which offers degree and certificate programs in the nursing and health professions postsecondary education industry.
Walden – This segment includes the operations of Walden, which offers degree and certificate programs, including those in nursing, education, counseling, business, information technology, psychology, public health, social work and human services, public administration and public policy, and criminal justice.
Medical and Veterinary – This segment includes the operations of AUC, RUSM, and RUSVM, collectively referred to as the “medical and veterinary schools,” which offer degree and certificate programs in the medical and veterinary postsecondary education industry.
These segments are consistent with the method by which Covista’s Chief Operating Decision Maker (“CODM”) evaluates performance and allocates resources. Covista’s CODM is our Chief Executive Officer. Our measure of segment profitability utilized by our CODM is adjusted operating income. Our CODM uses this measure to assess the operating results and performance of our segments, perform analytical comparisons to budget, and allocate resources to each segment during monthly operating reviews and annual budget process. Adjusted operating income excludes Home Office expense, restructuring expense, business integration expense, amortization of acquired intangible assets, litigation reserve, asset impairments, strategic advisory costs, loss on assets held for sale, and debt modification costs because these are not associated with the ongoing operations of the segments. “Home Office” includes activities not allocated to a reportable segment and is included to reconcile segment results to the Consolidated Financial Statements. Total assets by segment are not presented as our CODM does not review or allocate resources based on segment assets. The accounting policies of the segments are the same as those described in Note 2 “Summary of Significant Accounting Policies.”
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Summary financial information by reportable segment is as follows (in thousands):
Year Ended June 30, | |||||||||
2026 | 2025 | 2024 | |||||||
Revenue: |
| ||||||||
Chamberlain | $ | | $ | | $ | | |||
Walden | | | | ||||||
Medical and Veterinary | | | | ||||||
Consolidated | $ | | $ | | $ | | |||
Cost of educational services: | |||||||||
Chamberlain | $ | | $ | | $ | | |||
Walden | | | | ||||||
Medical and Veterinary | | | | ||||||
Other segment expenses(1): | |||||||||
Chamberlain | $ | | $ | | $ | | |||
Walden | | | | ||||||
Medical and Veterinary | | | | ||||||
Adjusted operating income: | |||||||||
Chamberlain | $ | | $ | | $ | | |||
Walden | | | | ||||||
Medical and Veterinary | | | | ||||||
Total segment adjusted operating income | | | | ||||||
Reconciliation to Consolidated Financial Statements: | |||||||||
Home Office expense |
| ( |
| ( |
| ( | |||
Restructuring expense |
| ( |
| ( |
| ( | |||
Business integration expense | — |
| — |
| ( | ||||
Amortization of acquired intangible assets | ( |
| ( |
| ( | ||||
Litigation reserve | — |
| |
| ( | ||||
Asset impairments | — |
| ( |
| — | ||||
Strategic advisory costs | ( |
| ( |
| — | ||||
Loss on assets held for sale | — |
| ( |
| ( | ||||
Debt modification costs | — |
| ( |
| ( | ||||
Consolidated operating income | | | | ||||||
Interest expense |
| ( |
| ( |
| ( | |||
Other income, net |
| |
| |
| | |||
Consolidated income from continuing operations before income taxes | $ | | $ | | $ | | |||
Depreciation: | |||||||||
Chamberlain | $ | | $ | | $ | | |||
Walden | | | | ||||||
Medical and Veterinary | | | | ||||||
Home Office |
| |
| |
| | |||
Consolidated | $ | | $ | | $ | | |||
Amortization of acquired intangible assets: | |||||||||
Walden | $ | | $ | | $ | | |||
Consolidated | $ | | $ | | $ | | |||
| (1) |
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Covista conducts its educational operations in the U.S., Barbados, St. Kitts, St. Maarten, and the U.K.
Year Ended June 30, | |||||||||
2026 | 2025 | 2024 | |||||||
Revenue by geographic area: |
| ||||||||
Domestic operations | $ | | $ | | $ | | |||
Barbados, St. Kitts, St. Maarten, and the U.K. |
| |
| |
| | |||
Consolidated | $ | | $ | | $ | | |||
June 30, | ||||||
2026 | 2025 | |||||
Long-lived assets by geographic area: | ||||||
Domestic operations | $ | | $ | | ||
Barbados, St. Kitts, St. Maarten, and the U.K. |
| |
| | ||
Consolidated | $ | | $ | | ||
No one customer accounted for more than 10% of Covista’s consolidated revenue for all periods presented.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on an evaluation of our disclosure controls and procedures (as such term is defined in Exchange Act Rule 13a-15(e)) that was conducted under the supervision and with the participation of Covista’s management, including our Chief Executive Officer and Chief Financial Officer, our Chief Executive Officer and Chief Financial Officer concluded that Covista’s disclosure controls and procedures were effective as of June 30, 2026.
Management’s Annual Report on Internal Control over Financial Reporting
The management of Covista prepared and is responsible for the consolidated financial statements and all related financial information contained in this report. This responsibility includes establishing and maintaining adequate internal control over financial reporting, as defined by Rules 13a-15(f) of the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management regularly monitors our internal controls over financial reporting, and actions are taken to correct any deficiencies as they are identified.
As of June 30, 2026, Covista’s management has assessed the effectiveness of its internal control over financial reporting, using the criteria specified by the Committee of Sponsoring Organizations of the Treadway Commission’s 2013 report Internal Control — Integrated Framework. Based upon this assessment, Covista’s management concluded that as of June 30, 2026, Covista’s internal control over financial reporting was effective.
The effectiveness of Covista’s internal control over financial reporting as of June 30, 2026 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their attestation report included in Item 8. “Financial Statements and Supplementary Data” of this report.
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Changes in Internal Control over Financial Reporting
There were no changes during the fourth quarter of fiscal year 2026 in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
Item 9B. Other Information
| (a) | None. |
| (b) | On |
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
| (a) | Information Regarding Directors and Executive Officers. The information required by this Item 10 relating to directors and nominees for election to the Board is incorporated by reference from information under the section “Election of Directors” in the Proxy Statement. The information required by this Item 10 with respect to our executive officers is set forth in “Information About Our Executive Officers” at the end of Part I of this Annual Report on Form 10-K. |
| (b) | Compliance with Section 16(a) of the Exchange Act. If applicable, the information required by this Item 10 with respect to compliance with Section 16(a) of the Exchange Act will be contained in the Proxy Statement under the caption “Delinquent Section 16(a) Reports,” which is incorporated by reference to the Proxy Statement. |
| (c) | Code of Business Conduct and Ethics. In accordance with the information required by this Item 10 relating to the code of ethics required by Item 406 of Regulation S-K, Covista has a Code of Conduct and Ethics, which applies to its directors, officers (including the Chief Executive Officer, the Chief Financial Officer, and the Chief Accounting Officer), and all other employees. The full text of the Code is available on Covista’s website. Covista intends to satisfy the SEC’s requirements regarding amendments to, or waivers from, the Code by posting such information on its website. |
| (d) | Procedures for Shareholders to Recommend Director Nominees. There have been no material changes to the procedures by which security holders may recommend nominees to our Board. |
| (e) | Audit Committee Information. The information required by this Item 10 relating to Covista’s audit and finance committee financial experts and identification of Covista’s audit committee is incorporated by reference from information under the section “Board Structure and Operations” in the Proxy Statement. |
| (f) | Insider Trading Policy. The information required by this Item 10 relating to insider trading policies and procedures is incorporated by reference from information under the section “Prohibition on Hedging and Pledging” in the Proxy Statement. |
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Item 11. Executive Compensation
The information required by this item is incorporated by reference from information contained under the sections “Election of Directors,” “Say-on-Pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers,” and “Executive Compensation Tables” in the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item is incorporated by reference from information contained under the sections “Voting Securities and Principal Holders” and “Executive Compensation Tables – Equity Compensation Plan Information” in the Proxy Statement.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference from information contained under the sections “Certain Relationships and Related Person Transactions” and “Director Independence” in the Proxy Statement.
Item 14. Principal Accountant Fees and Services
The information required by this item is incorporated by reference from information contained under the sections “Audit Fees and Other Fees” and “Pre-Approval Policies” in the Proxy Statement.
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) The following documents are filed as part of this report:
| 1. | Financial Statements |
Consolidated Financial Statements filed as part of this report are listed under Item 8. “Financial Statements and Supplementary Data.”
| 2. | Financial Statement Schedules |
All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and accompanying notes included in this Form 10-K.
| 3. | Exhibits |
Exhibit | Exhibit Description | Filed Herewith | Incorporated by Reference to: | |||
|---|---|---|---|---|---|---|
2 | Plan of acquisition, reorganization, arrangement, liquidation or succession | |||||
2.1 | Stock Purchase Agreement, by and between the Registrant and Cogswell Education, LLC, dated December 4, 2017 (the “Cogswell Agreement”) | Exhibit 2.1 to the Registrant’s Form 8-K dated December 4, 2017 | ||||
2.2 | Amendment No. 1 to the Cogswell Agreement, dated August 2, 2018 | Exhibit 2.1 to the Registrant’s Form 8-K dated August 3, 2018 | ||||
2.3 | Amendment No. 2 to the Cogswell Agreement dated as of December 11, 2018 | Exhibit 2.3 to the Registrant’s Form 8-K dated December 12, 2018 | ||||
2.4 | Amendment No. 3 to the Cogswell Agreement, dated as of December 11, 2018 | Exhibit 2.4 to the Registrant’s Form 8-K dated December 12, 2018 | ||||
2.5 | Membership Interest Purchase Agreement by and between the Registrant and Laureate Education, Inc., dated as of September 11, 2020 | Exhibit 2.1 to the Registrant’s Form 8-K dated September 16, 2020 | ||||
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Exhibit | Exhibit Description | Filed Herewith | Incorporated by Reference to: | |||
|---|---|---|---|---|---|---|
2.6 | Waiver and Amendment to Membership Interest Purchase Agreement by and between the Registrant and Laureate Education, Inc., dated as of July 21, 2021 | Exhibit 2.1 to the Registrant’s Form 8-K dated July 27, 2021 | ||||
3 | Articles of incorporation | |||||
3.1 | Restated Certificate of Incorporation of the Registrant, dated as of February 5, 2026 | Exhibit 3.2 to the Registrant’s Form 8-K dated February 5, 2026 | ||||
3.2 | Amended and Restated By-Laws of the Registrant, as amended as of February 5, 2026 | Exhibit 3.3 to the Registrant’s Form 8-K dated February 5, 2026 | ||||
4 | Instruments defining the rights of securities holders, including indentures | |||||
4.1 | Description of Registrant’s Securities | X | ||||
10 | Material contracts | |||||
10.1 | Credit Agreement, dated as of August 12, 2021, (as amended by Amendment No. 1 to Credit Agreement, dated as of June 27, 2023, Amendment No. 2 to Credit Agreement, dated as of January 26, 2024, Amendment No. 3 to Credit Agreement, dated as of August 21, 2024, Amendment No. 4 to Credit Agreement and Incremental Assumption Agreement, dated as of August 6, 2025 and Amendment No. 5 to Credit Agreement and Incremental Assumption Agreement, dated as of March 2, 2026) by and between the Registrant, as borrower, the lenders party thereto and Morgan Stanley Senior Funding, Inc. as administrative agent and collateral agent (the “Credit Agreement”) | Exhibit 10.1 to the Registrant’s Form 10-Q for the quarter ended March 31, 2026 | ||||
10.2* | Registrant’s Fourth Amended and Restated Incentive Plan of 2013 | Exhibit 10(f) to the Registrant’s Form 10-Q for the quarter ended September 30, 2022 | ||||
10.3* | Registrant’s Nonqualified Deferred Compensation Plan | Exhibit 4.3 to the Registrant’s Form S-8 dated August 27, 2014 | ||||
10.4* | Registrant’s Retirement Plan | Exhibit 10(d) to the Registrant’s Form 10-K for the year ended June 30, 2022 | ||||
10.5* | Amendment One to the Registrant’s Retirement Plan | Exhibit 10(e) to the Registrant’s Form 10-K for the year ended June 30, 2022 | ||||
10.6* | Amendment Two to the Registrant’s Retirement Plan | Exhibit 10(f) to the Registrant’s Form 10-K for the year ended June 30, 2022 | ||||
10.7* | Amendment Three to the Registrant’s Retirement Plan | Exhibit 10(g) to the Registrant’s Form 10-K for the year ended June 30, 2022 | ||||
10.8* | Form of Indemnification Agreement between the Registrant and its Directors | Exhibit 10(f) to the Registrant’s Form 10-K for the year ended June 30, 2010 | ||||
10.9* | Form of Restricted Stock Unit Award Agreement for Directors | Exhibit 10(d) to the Registrant’s Form 10-Q for the quarter ended September 30, 2021 | ||||
10.10* | Form of Restricted Stock Unit Award Agreement for Executive Officers (for awards granted in fiscal year 2025) | Exhibit 10.1 to the Registrant’s Form 10-Q for the quarter ended December 31, 2024 | ||||
10.11* | Form of Restricted Stock Unit Award Agreement for Employees (for awards granted in fiscal year 2025) | Exhibit 10.2 to the Registrant’s Form 10-Q for the quarter ended December 31, 2024 | ||||
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Exhibit | Exhibit Description | Filed Herewith | Incorporated by Reference to: | |||
|---|---|---|---|---|---|---|
10.12* | Form of Performance-Based Restricted Stock Unit Award Agreement for Executive Officers (for awards granted in fiscal year 2025) | Exhibit 10.3 to the Registrant’s Form 10-Q for the quarter ended December 31, 2024 | ||||
10.13* | Form of Performance-Based Restricted Stock Unit Award Agreement for Employees (for awards granted in fiscal year 2025) | Exhibit 10.4 to the Registrant’s Form 10-Q for the quarter ended December 31, 2024 | ||||
10.14* | Form of Restricted Stock Unit Award Agreement for Executive Officers (for awards granted in fiscal year 2026) | Exhibit 10.1 to the Registrant’s Form 10-Q for the quarter ended December 31, 2025 | ||||
10.15* | Form of Restricted Stock Unit Award Agreement for Employees (for awards granted in fiscal year 2026) | Exhibit 10.2 to the Registrant’s Form 10-Q for the quarter ended December 31, 2025 | ||||
10.16* | Form of Performance-Based Restricted Stock Unit Award Agreement for Executive Officers (for awards granted in fiscal year 2026) | Exhibit 10.3 to the Registrant’s Form 10-Q for the quarter ended December 31, 2025 | ||||
10.17* | Form of Performance-Based Restricted Stock Unit Award Agreement for Employees (for awards granted in fiscal year 2026) | Exhibit 10.4 to the Registrant’s Form 10-Q for the quarter ended December 31, 2025 | ||||
10.18* | Executive Employment Agreement effective September 8, 2021, between the Registrant and Stephen W. Beard | Exhibit 10.1 to the Registrant’s Form 8-K dated August 6, 2021 | ||||
10.19* | Executive Employment Agreement effective October 18, 2021, between the Registrant and Robert J. Phelan | Exhibit 10.1 to the Registrant’s Form 8-K dated November 15, 2021 | ||||
10.20* | Executive Employment Agreement effective June 14, 2021, between the Registrant and Douglas G. Beck | Exhibit 10(gg) to the Registrant’s Form 10-K for the year ended June 30, 2021 | ||||
10.21* | Executive Employment Agreement effective May 17, 2022, between the Registrant and Michael Betz | Exhibit 10.43 to the Registrant’s Form 10-K for the year ended June 30, 2024 | ||||
10.22* | Executive Employment Agreement effective April 1, 2024, between the Registrant and Scott Liles | Exhibit 10.35 to the Registrant’s Form 10-K for the year ended June 30, 2025 | ||||
19 | Insider trading policies and procedures | |||||
Insider Trading Policy | Exhibit 19.1 to the Registrant’s Form 10-K for the year ended June 30, 2024 | |||||
19.2 | Insider Sales and Ownership Policy Addendum | Exhibit 19.2 to the Registrant’s Form 10-Q for the quarter ended December 31, 2025 | ||||
21 | Subsidiaries of the registrant | |||||
21.1 | Subsidiaries of the Registrant | X | ||||
23 | Consents of experts and counsel | |||||
23.1 | Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm | X | ||||
31 | Rule 13a-14(a)/15d-14(a) Certifications | |||||
31.1** | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended | X | ||||
31.2** | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended | X | ||||
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Exhibit | Exhibit Description | Filed Herewith | Incorporated by Reference to: | |||
|---|---|---|---|---|---|---|
32 | Section 1350 Certifications | |||||
32.1** | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||
97 | Policy Relating to Recovery of Erroneously Awarded Compensation | |||||
97.1 | Incentive Compensation Recovery Policy | Exhibit 97.1 to the Registrant’s Form 10-K for the year ended June 30, 2024 | ||||
101 | Interactive Data File | |||||
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | X | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||
104 | Cover Page Interactive Data File | |||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||
* Designates management contracts and compensatory plans or arrangements.
** Filed or furnished herewith.
Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Covista Inc. | ||
Date: August 6, 2026 | By: | /s/ Robert J. Phelan |
Robert J. Phelan | ||
Senior Vice President and Chief Financial Officer | ||
(Principal Financial Officer) | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
/s/ Stephen W. Beard | Chairman and Chief Executive Officer | August 6, 2026 | ||
Stephen W. Beard | (Principal Executive Officer) | |||
/s/ Robert J. Phelan | Senior Vice President and Chief Financial Officer | August 6, 2026 | ||
Robert J. Phelan | (Principal Financial Officer) | |||
/s/ Manjunath Gangadharan | Vice President and Chief Accounting Officer | August 6, 2026 | ||
Manjunath Gangadharan | (Principal Accounting Officer) | |||
/s/ Michael W. Malafronte | Lead Independent Director | August 6, 2026 | ||
Michael W. Malafronte | ||||
/s/ William W. Burke | Director | August 6, 2026 | ||
William W. Burke | ||||
/s/ Donna J. Hrinak | Director | August 6, 2026 | ||
Donna J. Hrinak | ||||
/s/ Georgette Kiser | Director | August 6, 2026 | ||
Georgette Kiser | ||||
/s/ William Krehbiel | Director | August 6, 2026 | ||
William Krehbiel | ||||
/s/ Sharon O’Keefe | Director | August 6, 2026 | ||
Sharon O’Keefe | ||||
/s/ Kenneth J. Phelan | Director | August 6, 2026 | ||
Kenneth J. Phelan | ||||
/s/ Betty Vandenbosch | Director | August 6, 2026 | ||
Betty Vandenbosch | ||||
/s/ Lisa W. Wardell | Director | August 6, 2026 | ||
Lisa W. Wardell |
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