Company: LGCY
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001493152-25-022296
Chunk: 33

Company: Legacy Education Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part II, Item 8
Chunk 33
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iting bodies. In particular, the Higher
Education Act of 1965, as amended (the “Higher Education Act”), and the regulations promulgated thereunder by ED, subject
the Company to significant regulatory scrutiny on the basis of numerous standards that schools must satisfy in order to participate in
the various federal student financial assistance programs under Title IV of the Higher Education Act.

Composite
Score

As
described above, ED requires institutions to meet standards of financial responsibility. ED deems an institution financially responsible
when the composite score is at least 1.5. The Company’s composite score was 3.0 for the fiscal year ended June 30, 2024. The composite
score calculation for fiscal year ended June 30, 2025, has not yet been completed as of the date of these financial statements and is
due on December 31, 2025.

    F-21

Legacy
Education Inc.

Notes
to Condensed Consolidated Financial Statements

For
the three months ended September 30, 2025 and 2024

90/10
Disclosure

The
Company derives a substantial portion of its revenues from student financial aid received by its students under the Title IV
programs administered by ED pursuant to the Higher Education Act. To continue to participate in the student financial aid programs,
the Company must comply with the regulations promulgated under the Higher Education Act. The regulations restrict the proportion of
cash receipts for tuition and fees from eligible programs to not more than 90% from Title IV programs and other federal educational
assistance funds (the “90/10 revenue test”). If an institution fails to satisfy the test for one year, its participation
status becomes provisional for two consecutive fiscal years. If the test is not satisfied for two consecutive years, eligibility to
participate in Title IV programs is lost for at least two fiscal years. Using ED’s cash-basis, regulatory formula under the
90/10 revenue test, as in effect for its 2024 fiscal year, HDMC, CCC and ICH derived 87.55%, 79.51% and 84.19% for its 90/10 revenue
from the Title IV programs and other federal educational assistance funds, respectively, for the fiscal year ended June 30, 2024. The
90/10 calculations for fiscal year ended June 30, 2025, for each of our institutions are due to ED on December 31, 2025.

Litigation