Company: LGCY
Filing Date: 2025-09-25
Form Type: 10-K
Source: 0001493152-25-014945
Chunk: 365

Company: Legacy Education Inc.
Filing Date: 2025-09-25
Form: 10-K
Item: Item 1A
Chunk 365
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 basis, including potentially
by posting irrevocable letters of credit, we may not have the capacity to post these letters of credit which could result in sanctions
including loss of Title IV Program eligibility.

ED
annually evaluates the financial responsibility of HDMC, CCC, Integrity, and CCMCC on a consolidated basis. We have calculated our composite
score for the 2024 fiscal year to be 3.0, however this score is subject to determination by ED based on its review of our consolidated
audited financial statements for the 2024 fiscal year. Our next composite score will be calculated based on audited financial statements
for the 2025 fiscal year due for submission to ED by December 31, 2025. We expect the composite score for the 2025 fiscal year to exceed
1.5, but the final composite score is subject to our final calculation and to determination by ED based on its review of our consolidated
financial statements for the 2025 fiscal year. However, if our composite scores in the future were to decrease, we may become subject
to the additional requirements noted above or our Title IV Program eligibility could be affected. We cannot predict how long it will
take the ED to make its determination or the outcome of its determination.

55

On
October 31, 2023, ED published final regulations with a general effective date of July 1, 2024 that, among other things, amended the
“general” standards of financial responsibility to revise the timeframe for institutions to submit annual audits, require
reporting on the status of foreign entity owners, and add events that constitute a failure to demonstrate an institution is able to meet
financial obligations. These regulations also modified the list of triggering events that could result in ED determining that the institution
lacks financial responsibility and must submit to ED a letter of credit or other form of acceptable financial protection and accept other
conditions on the institution’s Title IV Program eligibility. The regulations create lists of mandatory triggering events and discretionary
triggering events. An institution is not able to meet its financial or administrative obligations if a mandatory triggering event occurs.
The mandatory triggering events include:

    ●
    an
    institution with a composite score of less than 1.5 has a recalculated composite score of less than 1.0 as determined by ED as a
    result of an institutional liability from a monetary award or judgment or settlement resulting from a legal proceeding;

    ●
    an
    institution (or an entity