Company: LGCY
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010844
Chunk: 34

Company: Legacy Education Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 34
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 ended June 30, 2024.

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 (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 Rule, as in effect for its 2024 fiscal year, HDMC, CCC and Integrity
derived 87.55%,79.51% and 84.19% for its 90/10 revenue from Title IV program funds, respectively, for the fiscal year ended June 30,
2024.

Litigation

The
Company is unaware of any other pending or threatened litigation arising from services currently or formerly performed by the Company.
The Company is unaware of any possible claiming that could have a material adverse effect on the Company’s business, results of
operations or financial condition.

Note
17 – Subsequent Events

On
April 2, 2025 the Company granted a total of 479,648 stock options pursuant to the Company’s Amended and Restated 2021 Equity
Incentive Plan to certain officers and directors for exercise at 7.25 per share. The options vest over 3 years in equal monthly
installments with the first tranche vesting on grant date and expiring on April 2, 2035.

F-21

ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You
should read the following discussion and analysis of our financial condition and results of operations together with our financial statements
and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion
and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially
from those discussed below. Factors that could cause or contribute to such differences include,