Company: LGCY
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010844
Chunk: 16

Company: Legacy Education Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 16
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 ongoing evaluations of these institutions to limit concentration
risk exposure. The Company maintains cash balances in excess of these limits from time to time.

As
of March 31, 2025 and June 30, 2024, $5.27 and $2.15 million, respectively, was maintained in a redeemable money market account bearing
interest at approximately 6.0% per annum.

Commitments
and Contingencies

The
Company accrues for a contingent obligation when it is probable that a liability has been incurred and the amount is reasonably estimable.
When the Company becomes aware of a claim or potential claim, the likelihood of any loss exposure is assessed. If it is probable that
a loss will result and the amount of the loss is estimable, the Company records a liability for the estimated loss. If the loss is not
probable or the amount of the potential loss is not estimable, the Company will disclose the claim if the likelihood of a potential loss
is reasonably possible and the amount of the potential loss could be material. Estimates that are particularly sensitive to future changes
include tax, legal, and other regulatory matters, which are subject to change as events evolve, and as additional information becomes
available during the administrative and litigation process. The Company expenses legal fees as incurred.

Income
Taxes

GAAP
requires management to evaluate tax positions taken by the Company and recognize a tax liability if the Company has taken an uncertain
position that is more likely than not would be sustained upon examination by the Internal Revenue Service. Management has analyzed the
Company’s tax positions and believes there are no uncertain positions taken or expected to be taken that would require recognition
of a liability or disclosure in the financial statement.

The
Company accounts for income taxes payable or refundable for the current year and deferred tax assets and liabilities for future tax consequences
of events that have been recognized in the Company’s financial statements or tax returns. Deferred tax assets and liabilities are
measured using enacted tax rates in effect for the year in which the temporary differences are expected to be realized.

The
Company expenses penalties and interest related to federal and state income taxes as incurred. Penalties, if any, are included in general
and administration expenses on the income statement. The estimated federal and state effective tax rates are 21% and 8.84%, respectively.

Emerging
Growth Company

The
Company has elected to be an emerging growth company as defined under the Jumpstart Our Business Startups Act of 2012 (“