Preferred Stock

12 Months Ended

Dec. 31, 2025

On December 28, 2022, APEI issued $40 million of the Series A Senior Preferred Stock, $0.01 par value per share, to affiliates of existing common stockholders of the Company. On June 23, 2025, or the Redemption Date, APEI redeemed all 400 outstanding shares of Series A Senior Preferred Stock for $43.1 million, including an early redemption premium of $3.1 million, and excluding $1.4 million in accrued and unpaid dividends. The loss on redemption of $3.5 million was calculated as the difference between the consideration paid, excluding dividends, and the book value of $39.6 million, and was recorded as a reduction to net income available to common stockholders in the accompanying Consolidated Statements of Income for the year ended December 31, 2025. No shares of preferred stock were issued or outstanding at December 31, 2025. On the Redemption Date, APEI also filed a Certificate of Elimination to its Fifth Amended and Restated Certificate of Incorporation, or the Charter, with the Secretary of State of the State of Delaware eliminating from the Charter all matters set forth in the Certificate of Designation with respect to the Series A Senior Preferred Stock.

Prior to the Redemption Date, the Series A Senior Preferred Stock had cumulative dividends that accrued daily at the annual rate which was equal to Term SOFR (selected by the Company for each divided period), plus 10.00%, and dividends were paid, after declaration by the Company’s Board of Directors, for each dividend period. During the years ended December 31, 2023, 2024, and 2025, $6.0 million, $6.1 million, and $2.8 million of dividends were declared and paid on the Series A Senior Preferred Stock dividends, respectively.

As of December 31, 2024, the liquidation preference of $47.0 million was based on the occurrence of a liquidation event, which was also considered an event of default as defined in the Certificate of Designation and included an early redemption premium amount and a make-whole payment for any redemption of the securities prior to June 30, 2025. As of December 31, 2024, the make-whole payment included in the Liquidation Preference was $4.0 million, which was reduced quarterly.

The following table lists the components of the liquidation preference as of December 31, 2024 (in thousands):


Series A Senior Preferred Stock (plus accrued and unpaid dividends)	40,068
Make whole payment	3,993
Early redemption premium	2,915
Liquidation Preference	$	46,976

The Series A Senior Preferred Stock had no voting rights for directors or otherwise, except as required by law or with respect to certain protective provisions. Without the consent of at least 60% of the then outstanding shares of Series A Senior Preferred Stock, with certain exceptions, the Company could not, among other things, (i) incur any indebtedness if such incurrence would cause the Company’s Total Net Leverage Ratio (as defined in the Purchase Agreement) to exceed 0.75:1, (ii) issue any capital stock senior to or pari passu with the Series A Senior Preferred Stock, (iii) declare or pay any cash dividends on the Company’s common stock, or (iv) repurchase more than an aggregate of $30 million of the Company’s common stock