ZVO Zovio Inc

Risks

• Risks Related to the Proposed Ashford Transactions and Proposed Change in the Structure of Our Operations
• Failure to complete the asset purchase agreement with the Arizona Board of Regents, for and on behalf of the University of Arizona and the University of Arizona Global Campus, which is subject to conditions and also may not close due to uncertainties, may prevent us from executing on our strategic plans, and could materially and adversely impact us.
• The Conversion Transaction is subject to the receipt of regulatory approvals that if not obtained, could delay or prevent its consummation, and an excessive delay in finalizing the Conversion Transaction could disrupt our business during its pendency.
• If the Department does not approve the change of control related to the Conversion Transaction and recertify Ashford to continue participating in the Title IV programs, its students would lose their access to Title IV program funds, or there are significant limitations as a condition of Ashford’s continued participation in the Title IV programs, as a service provider to Ashford, our business, financial condition and results of operations, as well as our stock price, could be materially and adversely affected.
• The separation of Ashford via the Conversion Transaction, may not be completed on the terms or timeline currently contemplated and failure to complete, or any delay of, the separation of Ashford from Zovio Inc may negatively impact our planned business, financial condition or results of operations.
• Risks Related to the Extensive Regulation of Our Business
• The failure of Ashford to demonstrate financial responsibility may result in a loss of eligibility to participate in Title IV programs or require the posting of a letter of credit in order to maintain eligibility to participate in Title IV programs.
• Risks Related to Our Business
• We may require additional financing in the future and if such financing is not available on terms acceptable to us, it could adversely affect our ability to grow.
• We may be susceptible to a number of political, economic, and geographic risks that could harm our business. Significant disruptions in the global economic environment, as a result of a pandemic such as COVID-19, may cause a decrease in our enrollment and adversely affect our business and financial results.
• The recent coronavirus outbreak has been declared a pandemic by the World Health Organization, has spread to the United States and many other parts of the world and will adversely affect our business operations, financial results, and employee availability, and may cause a decrease in our enrollment and a drop in student retention.