Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 190

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1
Chunk 190
---
pliance 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 applicable 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.

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. The composite score calculation for fiscal year ended June 30, 2025, has
not yet been completed as of the date of these financial statements and is due on December 31, 2025.

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 and other federal educational assistance funds
(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 revenue test, as in effect for
its 2024 fiscal year, HDMC, CCC and ICH derived  87.55%, 79.51% and 84.19% for its 90/10 revenue from Title IV program and other federal
educational assistance funds,