Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 791

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 5
Chunk 791
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 investments.

Factors
Affecting Comparability

We
believe the following factors have had, or can be expected to have, a significant effect on the comparability of recent or future results
of operations:

Seasonality

Our
operations are generally subject to seasonal trends. We generally experience a seasonal increase in new enrollments during the first
quarter of our fiscal year, as well as during the third quarter each year, when most other colleges and universities begin their fall
semesters and subsequent to holiday break. While we enroll students throughout the year, our second quarter revenue generally is lower
than other quarters due to the holiday season.

84

Critical
Accounting Policies and Use of Estimates

The
discussion of our financial condition and results of operations is based upon our annual consolidated financial statements, which have
been prepared in accordance with GAAP. Critical accounting policies are those policies that, in management’s view, are most important
in the portrayal of our financial condition and results of operations. The footnotes to our annual consolidated financial statements
included elsewhere in this Annual Report on Form 10-K include disclosure of significant accounting policies. The methods, estimates,
and judgments we use in applying our accounting policies have a significant impact on the results we report in our financial statements.
These critical accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates
regarding matters that are inherently uncertain.

The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant
items subject to such estimates and assumptions include the evaluation of the Company’s distinct performance obligations, the valuation
of equity instruments and valuation allowances for credit losses related to accounts receivable.

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