Financial Analysis

Note 3 Acquisition On December 18, 2024, Antioch completed its acquisition of CCMCC for a base purchase price of $ 8,000,000 . Under the asset purchase agreement (APA), Antioch acquired certain assets and assumed certain liabilities of CCMCC. Under the terms of the APA as consideration for the sale, Antioch paid Sellers $ 6,600,000 subject to a working capital adjustment, entered into a $ 400,000 promissory note, described in Note 10, and issued 118,906 shares of HDMCs common stock with a combined value equivalent to $ 1,000,000 held in an escrow account for a period of one year. The working capital adjustment was required to equal zero on the transaction date and includes certain acquired assets and assumed liabilities. As of the date of this report, the net working capital adjustment has been determined to be $ 466,920 for a total purchase price of $ 7,533,080 . The acquisition was accounted for in accordance with the acquisition method of accounting. Under this method, the cost of the target is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess estimated fair values of the identifiable net assets over the amount paid was $ 7,738,750 which has been allocated between goodwill and other intangible assets and is included on the accompanying consolidated balance sheet. Legacy Education Inc. Notes to Consolidated Financial Statements For Fiscal Years ended June 30, 2025 and 2024 The fo …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Note 17 - Other Commitments and Contingency Regulatory In order for students to participate in Title IV federal financial aid programs, the Company is required to maintain certain standards of financial responsibility and administrative capability. In addition, the Companys institutions are accredited by ACCET or ABHES and approved by other agencies and must comply with the applicable rules and regulations of the accrediting body and other agencies. As a result, the Company may be subject from time to time to audits, investigations, claims of noncompliance 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 requir …

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Note 10 - Debts and Other Liabilities (1) Promissory Notes and Related Parties Debt The Company received $ 750,000 in proceeds from several creditors, including $ 150,000 from related parties in the form of unsecured promissory notes. Under the terms of the unsecured promissory notes, the principal shall be due and payable on the earlier to occur (i) the 9-month anniversary of the first advance under each promissory note; or (ii) the completion of an initial public offering by payee (Maturity Date), and the promissory note shall bear interest at a monthly rate of 1% based upon the amount outstanding as of any calculation date. Interest shall be payable monthly commencing on the 15th day of each calendar month following the date funds are first advanced. The maturity dates on these promissory notes were extended to March 31, 2021 . The noteholders agreed to defer the repayment of the principal balance until the completion of an initial public offering and subsequently agreed to defer the repayment until demanded or paid. Schedule of Carrying Amount of Promissory Note June 30, 2025 June 30, 2024 Promissory note issued on November 12, 2019 $ 500,000 $ 500,000 Promissory note issued on December 30, 2019, related party 50,000 50,000 Total other debt $ 550,000 $ 550,000 A further note issued on February 6, 2020 in the amount of $ 100,000 was repaid in cash in September 2023. (2) Equipment Loan In January 2023, the Company entered into an equipment loan for $ 30,744 . The note accru …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The tuition and related revenue consist of the following during the years ended June 30, 2025 and 2024: Schedule of Disaggregation of Revenue 2025 2024 Tuition and lab fees (recognized over time) $ 56,906,769 $ 41,200,761 Books, registration and other fees (recognized at a point in time) 7,261,256 4,799,555 Total revenue $ 64,168,025 $ 46,000,316

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Note 15 - Share-Based Compensation Plans Stock Options The Company utilizes ASC 718, Stock Compensation, related to accounting for share-based payments and, accordingly, records compensation expense for share-based awards based upon an assessment of the grant date fair value for stock options and restricted stock awards. The Black Scholes option pricing model was used to estimate the fair value of the options granted. This option pricing model requires a number of assumptions, of which the most significant are: expected stock price volatility, the expected pre-vesting forfeiture rate, and the expected option term (the amount of time from the grant date until the options are exercised or expire). The Company estimated a volatility factor utilizing a weighted average of comparable published volatilities of its peers. The Company applied the simplified method to determine the expected term of stock-based compensation grants. In prior years, the Company had granted time vested options to purchase shares of common stock with exercise prices ranging from $ 0.52 - $ 1.80 on the date of grant by the Board. These options vest ratably over a period of three years and expire ten years from the date of grant and the fair value of these options were calculated using the Black-Scholes Merton model. On April 1, 2024, the Company granted stock options to purchase an aggregate of 1,425,171 shares of its common stock at an exercise price of $ 3.74 per share to employees, directors, consultants …

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Note 16 - Income Tax The Company has deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets are subject to periodic recoverability assessments. Realization of the deferred tax assets, net of deferred tax liabilities is principally dependent upon achievement of projected future taxable income. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences. The Company has no valuation allowance as of June 30, 2025. On December 22, 2017, the Tax Cuts and Jobs Act (the Act) was signed into law. For businesses, the Act reduces the corporate federal tax rate from a maximum of 35 % to a flat 21 % rate. The rate reduction took effect on January 1, 2018. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted though income tax expense. The components of income tax expense (benefit) are as follows: Schedule of Components of Income Tax Expense (Benef …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13). ASU 2016-13 provides guidance for recognizing credit losses on financial instruments based on an estimate of current expected credit losses model. The amendments are effective for fiscal years beginning after December 15, 2019. Subsequently, the FASB issued the final ASU to delay adoption for smaller reporting companies for fiscal years beginning after December 15, 2022. The Company adopted ASU 2016-13 on July 1, 2023 and it did not have a material impact on its consolidated financial statements and related disclosures. In August 2020, the FASB issued ASU 2020-06, DebtDebt with Conversion and Other Options (Subtopic 470-20) and Derivatives and HedgingContracts in Entitys Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entitys Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entitys own equity, and also improves and amends the related EPS guidance for both Subtopics. The Company adopted ASU 2020-06 on July 1, 2024 and it did not have a material impact on its consolidated financial statements and related disclosures. In November 2023, the FASB issued ASU 2023-07, Segment ReportingImprovements to Reportable Segment Disclosures (ASU 2023-07), w …

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Note 11 - Related Party Transactions A shareholder of the Company was paid $ 90,000 and $ 90,000 as consulting fees in the years ended June 30, 2025 and 2024, respectively. A director of the Company was paid $ 135,875 and $ 78,000 , respectively, as consulting fees in the years ended June 30, 2025 and 2024, respectively. Legacy Education Inc. Notes to Consolidated Financial Statements For Fiscal Years ended June 30, 2025 and 2024 A company controlled by a director of the Company was paid $ 152,279 and $ 127,970 , respectively, as consulting fees during the years ended June 30, 2025 and 2024, respectively. Directors fees of $ 35,500 , $ 33,750 , and $ 28,000 , respectively, were paid to 3 individual directors in the year ended June 30, 2025. During the year ended June 30, 2024, one director received $ 18,000 and two directors each received $ 4,500 . In December 2019, the Company received $ 50,000 of proceeds from a promissory note, entered into with an executive of the Company, which bears interest at the rate of 12 % per annum and matures on the earlier of the nine-month anniversary of the loan or the completion of an initial public offering. The Company completed an initial public offering in September 2024, and the parties agreed to carry the note as due on demand. The balance of this note was $ 50,000 and $ 50,000 as of June 30, 2025 and June 30, 2024, respectively. …

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Note 2 Summary of Significant Accounting Principals Principal of Consolidation The audited consolidated financial statements include the accounts of HDMC and its wholly-owned subsidiaries, CCC, Integrity and CCMCC. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the assumptions used in the evaluation of the Companys distinct performance obligations, the valuation of equity instruments and allowance for credit losses related to accounts receivable. Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net income. Cash and Cash Equivalents The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. As of June 30, 2025 and 2024 approximately $ 10.38 million and $ 2.15 mi …

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Note 13 Stockholders Equity Reverse Stock Split On September 9, 2024, the Companys stockholders approved an amendment to the Companys articles of incorporation to effectuate a 1-for-2 reverse split of the Companys common stock. The amendment to the Companys articles of incorporation was filed with the Nevada Secretary of State on September 9, 2024. The consolidated financial statements, and all share and per share information contained herein, have been retroactively adjusted to reflect the reverse stock split. As of June 30, 2025 and June 30, 2024, the Company had 110,000,000 shares of authorized capital, par value $ 0.001 , of which 100,000,000 shares are designated as common stock, and 10,000,000 shares are designated as preferred stock. Equity Transactions In August 2024, 76,000 stock options were exercised at $ 0.52 per share of common stock. On September 27, 2024, the Company completed its initial public offering of 2,500,000 shares of common stock, priced at $ 4.00 per share. Concurrently, the Company issued 2,013 shares as true up shares as a result of the 1-for-2 reverse split. In conjunction with the offering, the Company granted stock purchase warrants to purchase an aggregate of 143,750 shares of its common stock at an exercise price of $ 4.60 per share to underwriters. During the three months ended December 31, 2024, in connection with the initial public offering, the Company issued 375,000 common shares in respect to the underwriters option to purchase up to an …

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Note 18 Subsequent Events The Company has evaluated subsequent events and transactions that occurred up to the date the consolidated financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing