Company: LGCY
Filing Date: 2025-02-13
Form Type: 10-Q
Source: 0001493152-25-006418
Chunk: 13

Company: Legacy Education Inc.
Filing Date: 2025-02-13
Form: 10-Q
Item: Part I, Item 1
Chunk 13
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Allowance
for Credit Losses

The
Company records an allowance for credit losses for estimated losses resulting from the inability, failure or refusal of its students
to make required payments, which includes the recovery of financial aid funds advanced to a student for amounts in excess of the student’s
cost of tuition and related fees. The Company determines the adequacy of its allowance for doubtful accounts based on an analysis of
its historical bad debt experience, current economic trends, and the aging of the accounts receivable and student status. The Company
applies reserves to its receivables based upon an estimate of the risk presented by the age of the receivables and student status. The
Company writes off account receivable balances of inactive students at the earlier of the time the balances were deemed uncollectible,
or one year after the revenue is generated. Bad debt expense is recorded as a general and administrative expense in the accompanying
statements of operations. The Company performs an analysis annually to determine which accounts are uncollectable and then writes them
off.

    F-9

Legacy
Education Inc.

Notes
to Consolidated Financial Statements

For
The Three and Six Months ended December 31, 2024 and 2023

(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 $2,327,375 and $2,095,720 during the six months ended December
31, 2024, and 2023, respectively. Advertising costs amounted to $1,154,718 and $999,136 during the three months ended December 31, 2024,
and 2023, 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