Company: LGCY
Filing Date: 2025-02-13
Form Type: 10-Q
Source: 0001493152-25-006418
Chunk: 85

Company: Legacy Education Inc.
Filing Date: 2025-02-13
Form: 10-Q
Item: Part I, Item 8
Chunk 85
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 comply with rules and regulations of the accrediting body. As a result, the Company may be subject from time to time
to audits, investigations, claims of noncompliance or lawsuits by governmental agencies, regulatory bodies, or third parties. While there
can be no assurance that such matters will not occur and if they do occur will not have a material adverse effect on these financial
statements, management believes that the Company has complied in all material respects with all regulatory requirements as of the date
of the financial statements.

The
Company is subject to extensive regulation by federal and state governmental agencies and accrediting 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.

    F-20

Legacy
Education Inc.

Notes
to Consolidated Financial Statements

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

(Unaudited)

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.

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 (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 Rule, as in effect for its 2024 fiscal year, HDMC, CCC and Integrity
derived 87.55%,79.51% and 84.19%