Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 227

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 7A
Chunk 227
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 Lease Commitments

Finance
Leases

In
July 2023, the Company entered into an equipment lease for $340,048. The related finance liability has an implied interest rate of 11.16%
per annum and requires 5 equal annual payments due on September 1 of each year. As of June 30, 2025 and June 30, 2024, the balance of
the finance liability was $215,409 and $272,669, respectively.

The
present value of future minimum lease payments due at June 30, 2025, was as follows:

Schedule
of Future Minimum Capital Lease Payments

    2026 
    $81,459 
  
    2027 
     81,459 
  
    2028 
     81,458 
  
    Total minimum payments 
     244,376 
  
    Less: amount representing interest 
     (28,967)
  
    Present value of minimum payments 
    $215,409 
  
    Less: current portion 
     (63,989)
  
    Long term portion 
    $151,420 

The
Company has determined to amortize the lease over the useful life of the equipment or ten years and put the equipment into service in
September 2024. The Company recorded amortization of $28,337 and $0 in the years ended June 30, 2025 and 2024, respectively.

Operating
Leases

The
Company leases its instructional facilities under non-cancelable operating leases expiring at various dates through 2034. In most cases,
the facility leases require the Company to pay various operating expenses of the facilities in addition to base monthly lease payments.
In certain cases, the Company has options available under its leases to renew, and certain leases contain ordinary rental escalations
on the space. Rent expense for the certain leases described above is recorded evenly over each lease term. The difference between rent
expense recorded and the amount paid is reflected as deferred rent on the accompanying balance sheets for those leases with rent escalation
clauses.

The
Company uses its incremental borrowing rate based on the information available at the commencement to determine the present value of
lease payments over the lease term. As of June 30, 2025, the weighted average incremental borrowing rate used by the Company was approximately
6.7%, and the weighted average remaining years left on outstanding leases was 7.58 years.

The
present value of future minimum lease payments due