SUBSEQUENT EVENT

9 Months Ended

Sep. 30, 2024

13.	Subsequent Event

Planned Sale of Las Vegas, Nevada Campus

Subsequent to the end of the third quarter, the board of directors approved a plan to sell the assets related to its Las Vegas, Nevada campus operated under Euphoria Institute of Beauty Arts & Sciences (“Euphoria”). The Company is in discussions with a prospective purchaser and expects to enter into a signed agreement prior to year-end. While the proposed transaction will not be material, it is expected that, for regulatory purposes, the transaction will be a school closure by Lincoln. There are currently approximately 300 students enrolled in programs at Euphoria and it is further expected that enrolled students would be permitted to transfer to the purchaser-operated school post-closing and continue their programs such that the sale should not have a significant impact on the student experience. In the fourth quarter, net assets of Euphoria will be classified on the balance sheet as assets held for sale and the related statement of operations information will be classified in the Transitional segment.

The DOE has confirmed that the proposed transaction will not be treated as a change in ownership and, instead, it will be treated as the closure of Euphoria and the establishment of a new location by the purchaser at the site of Euphoria. Although the parties intend to work toward enabling our current students at the Las Vegas, Nevada campus to complete their programs with the purchaser, certain current and former students could qualify for closed school loan discharges if they do not continue and complete their programs and, in turn, the DOE could impose liabilities and other sanctions on us based on any such closed school loan discharges. Also, we will be required to comply with other DOE, state, and accreditor requirements associated with the transaction, the transfer of the site, and the teaching of current students. Based on current discussions, the transaction is currently expected to close in January, 2025, subject to receipt of required regulatory approvals and satisfaction of other closing conditions.