Company: LGCY
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010844
Chunk: 66

Company: Legacy Education Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 66
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9

Legacy
Education Inc.

Notes
to Condensed Consolidated Financial Statements

For
The Three and Nine Months ended March 31, 2025 and 2024

(Unaudited)

Refunds

The
Company pays or credits refunds within 45 days of a student’s cancellation or withdrawal for students who have completed 60% or
less of the period of attendance based on a pro rata calculation. Once the student has completed more than 60% of a period of attendance,
all Title IV funds are considered earned and no refunds are due to ED.

Advertising

The
Company expenses advertising cost as incurred. Advertising costs amounted to $3,480,968 and $3,028,944 during the nine months ended March
31, 2025, and 2024, respectively. Advertising costs amounted to $1,153,593 and $937,440 during the three months ended March 31, 2025,
and 2024, respectively. Advertising costs are included in the general and administrative on the consolidated income statements.

Share-Based
Compensation

The
Company utilizes ASC 718, Stock Compensation, related to accounting for share-based payments and, accordingly, records compensation
expense for share-based awards based upon an assessment of the grant date fair value for stock options and restricted stock awards. The
Company estimates the fair value of stock-based compensation awards on the date of grant using an option-pricing model. The value of
the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s
consolidated statements of operations. The Company estimates the fair value of stock-based compensation awards using the Black-Scholes
model. This model requires the Company to estimate the expected volatility and value of its common stock and the expected term of the
stock options, all of which are highly complex and subjective variables. The expected life was calculated based on the simplified method
as described by the SEC Staff Accounting Bulletin No. 110, Share-Based Payment. The Company’s estimate of expected volatility was
based on the volatility of peers. The Company has selected a risk-free rate based on the implied yield available on U.S. Treasury securities
with a maturity equivalent to the expected term of the options. The Company accounts for forfeitures upon occurrence.

Fair
Value of Financial Instruments

The
Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, accounts payable and accrued
liabilities, deferred, unearned tuition, debt