Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 32

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1
Chunk 32
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 we may not have the capacity to post these letters of credit which could result in sanctions
including loss of Title IV Program eligibility.

ED annually evaluates the financial responsibility
of HDMC, CCC, Integrity, and CCMCC on a consolidated basis. We have calculated our composite score for the 2024 fiscal year to be 3.0;
however, this score is subject to determination by ED based on its review of our consolidated audited financial statements for the 2024
fiscal year. Our next composite score will be calculated based on audited financial statements for the 2025 fiscal year due for submission
to ED by December 31, 2025. We expect the composite score for the 2025 fiscal year to exceed 1.5, but the final composite score is subject
to our final calculation and to determination by ED based on its review of our consolidated financial statements for the 2025 fiscal year.
However, if our composite scores in the future were to decrease, we may become subject to the additional requirements noted above or our
Title IV Program eligibility could be affected. We cannot predict how long it will take ED to make its determination or the outcome of
its determination. On January 30, 2024, due to a failure to timely return unearned Title IV funds to ED, Integrity was required to submit
an acceptable form of financial protection for 25% of the refunds that were made for the fiscal year ended June 30, 2023 in the amount
of $18,828.

On
October 31, 2023, ED published final regulations with a general effective date of July 1, 2024 that, among other things, amended the
“general” standards of financial responsibility to revise the timeframe for institutions to submit annual audits, require
reporting on the status of foreign entity owners, and add events that constitute a failure to demonstrate an institution is able to meet
financial obligations. These regulations also modified the list of triggering events that could result in ED determining that the institution
lacks financial responsibility and must submit to ED a letter of credit or other form of acceptable financial protection and accept other
conditions on the institution’s Title IV Program eligibility. The regulations create lists of mandatory triggering events and discretionary
triggering events. An institution is not able to meet its financial or administrative obligations if a mandatory triggering event occurs.
The mandatory triggering events include:

    ●
    an institution with a composite
    score of less than 1.5 has a