Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 45

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1
Chunk 45
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 ownership or an acquisition, which could make it less desirable to acquire an ownership interest in our Company,
or which could result in conditions or restrictions as a result of a transaction involving us or an acquired institution. In addition,
ED’s revisions to its financial responsibility standards published on October 31, 2023 and effective July 1, 2024 impose additional
financial tests, and potentially additional letter of credit requirements, related to changes in ownership.

Most
of our state education agencies, our accreditors, and other regulators include the sale of a controlling interest of common stock in
the definition of a change of control although some agencies could determine that the sale or disposition of a smaller interest would
result in a change of control. A change of control under the definition of one of these agencies would require the affected school to
reaffirm its state authorization, accreditation, or other approval. Some agencies would require approval prior to a sale or disposition
that would result in a change of control in order to maintain authorization or accreditation. The requirements to obtain such reaffirmation
from the states and our accreditors vary widely.

ED
requires institutions to periodically report changes in ownership even when a change does not result in a change in control or require
ED approval. While ED’s regulations require reporting of owners holding at least a five percent ownership interest (as well as
changes representing at least 5% but under 25% on a quarterly basis or sooner if the institution plans to undergo a change in ownership),
the recently implemented overhaul of ED’s electronic application system through which institutions report ownership requests a
disclosure of all owners regardless of their ownership percentage. The new electronic application also requests granular detail about
reported owners. We may not have access to contemporaneous ownership information given the day-to-day fluctuations of trading on the
public market. Access to information regarding Non-Objecting Beneficial Owners is expensive and this information is typically not current
by the time obtained. Moreover, we cannot predict whether investors will timely report investments such that we could access accurate
beneficial ownership information and even if investors do comply with reporting requirements, certain passive investors would not typically
be reported until 45 days following our fiscal year end. We are as yet uncertain regarding our ability to timely obtain ownership information
and timely report this information to ED. Failure to timely report ownership changes could result in adverse action by ED, or conditions
or restrictions imposed by ED on one or more of our institutions.

Our
institutions may encounter difficulty timely identifying and