The for-profit chain faces declining enrollment and a bleeding balance sheet, but success online is uncertain and sale prospects are limited.
In January, the company that operates National American University added language to a securities filing that probably no corporate executive enjoys having to say.
Management noted the company’s $8.7 million working capital deficiency and cash shortage raised “substantial doubt regarding the Company’s ability to continue as a going concern.” In other words, the for-profit college operator might not survive the next 12 months.
Accounting guidelines for when a company must issue such warnings were laid out in 2014 and got their first major test when Sears Holdings issued a “going concern” warning in a 2017 earnings report, tanking its stock and roiling the retail world. (Sears would go on to file for Chapter 11 bankruptcy protection about a year and a half later and faced potential liquidation before its former CEO bought its remaining stores.)