Company: LGCY
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001493152-25-022296
Chunk: 42

Company: Legacy Education Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part II, Item 8
Chunk 42
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 of tuition and related fees. We determine the adequacy of our allowance for doubtful accounts based on an analysis of our historical
bad debt experience, current economic trends, and the aging of the accounts receivable and student status. We apply reserves to our receivables
based upon an estimate of the risk presented by the age of the receivables and student status. We write off account receivable balances
of inactive students at the earlier of the time the balances were deemed uncollectible, or one year after the revenue is generated. Bad
debt expense is recorded as a general and administrative expense in the income statement. The Company performs an analysis annually to
determine which accounts are uncollectable and write them off.

Impairment
of long-lived assets

We
evaluate the recoverability of our long-lived assets for impairment, other than goodwill, whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison
of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the assets. If such assets are considered
to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair
value of the assets. Fair value estimates are based on assumptions concerning the amount and timing of estimated future cash flows. We
had no long-lived asset impairments as of September 30, 2025 or June 30, 2025, respectively.

6

Income
taxes

GAAP
requires management to evaluate tax positions taken by us and recognize a tax liability if we have taken an uncertain position that is
more likely than not would be sustained upon examination by the Internal Revenue Service. Management has analyzed our 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.

Corporate
tax applies to corporations and limited liability companies that elect to be treated as corporations. The federal income tax rate for
c-corporations is 21% and the state tax rate is 8.84%, and it applies to net taxable income from business activity in California.

Corporations
are not subject to the state’s franchise tax, but they are subject to the alternative minimum tax (“AMT”) of 6.65%,
which limits the effectiveness of a business writing off expenses against income to lower its corporate tax rate