Company: LGCY
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001493152-25-022296
Chunk: 142

Company: Legacy Education Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 8
Chunk 142
---
 the Northern District of Texas. See Annual Report at Form 10-K “Education Regulations - Financial Value
Transparency and Gainful Employment Regulations.” ED subsequently filed a motion for summary judgment, which was granted by the
court on October 2, 2025, upholding the validity of the regulations. The regulations will apply to us unless they are challenged successfully
in future litigation such as if the plaintiffs appeal the summary judgment ruling and the Fifth Circuit Court of Appeals decides in their
favor. However, we cannot predict whether the plaintiffs will appeal, nor can we predict the outcome of such appeal.

Moreover, the regulations are subject to further amendment
by ED. As noted above, ED established a negotiated rulemaking committee that is scheduled to meet in December 2025 and January 2026 to
consider topics such as financial value transparency and gainful employment as well as separate accountability measures under OBBBA related
to the potential loss of Direct Loan eligibility for certain degree programs with low earnings outcomes for two out of three years. See
“Regulatory Updates – Negotiated Rulemaking;” see also Annual Report at Form 10-K “Education Regulations –
Congressional Action.” We cannot predict whether ED will modify the gainful employment and financial value transparency rules as
a result of the negotiated rulemaking, nor can we predict the timing, scope, and final content of any regulations ED may issue on these
or other topics. The implementation of recent or amended financial value transparency and gainful employment regulations and new laws
and regulations related to other accountability measures could require us to modify or eliminate certain programs to comply with the new
laws and regulations and could result in the loss of eligibility for some or all Title IV Programs for programs that fail to comply with
the regulations which could have a material adverse effect on our student population and our revenues.

4

Key
Financial Metrics

Revenue

Tuition
revenue is primarily derived from postsecondary education services provided to students. Generally, tuition and other fees are paid upfront
and recorded in contract liabilities in advance of the date when education services are provided to the student. A tuition receivable
is recorded for the portion of tuition not paid in advance. In some instances, instalment billing is available to students which reduces
the amount of cash consideration received in advance of performing the service. The contractual terms and conditions associated with
instalment billing indicate that the student is liable for the total contract price, therefore mitigating the Company’s exposure
to losses associated with nonpayment. Tu