What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-09-25 compared with 2024-10-01 · 552 added, 400 removed, 534 unchanged (64% of the section changed)

3 unchanged sentences

EDUCATION INC.

CONSOLIDATED FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

the fiscal years ended June 30, 2025 and 2024

3 unchanged sentences

Integrity College of Health)

Consolidated Financial Statements for the fiscal years ended June 30, 2024 and 2023

(dba Contra Costa Medical Career College)

Financial Statements for the fiscal years ended June 30, 2025 and 2024

Report of Independent Registered Public Accounting Firm

3 unchanged sentences

Consolidated Statements of Cash Flows

to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Members of the Board of Directors of

Education Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheets of Legacy Education Inc.

(the “Company”) as of June 30, 2024 and

2023, and the related consolidated income statements, consolidated statements of changes in stockholders’ equity, and consolidated

cash flows for each of the years in the two-year period ended June 30, 2024, and the related notes (collectively referred to as the financial

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company

as of June 30, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two years ended June

30, 2024, in conformity with accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Members of the Board of Directors of

Legacy Education Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheets of Legacy Education Inc.

(the “Company”) as of June 30, 2025 and 2024, and the related consolidated income

statements, consolidated statements of changes in stockholders’ equity, and consolidated cash flows for each of the years in the

two-year period ended June 30, 2025, and the related notes (collectively referred to as the financial statements).

In our opinion, the

financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and

the results of its operations and its cash flows for each of the years in the two years ended June 30, 2025, in conformity with accounting

principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

/s/ L J Soldinger Associates, LLC

have served as the Company’s auditor since 2018.

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ L J Soldinger Associates,

We have served as the Company’s

auditor since 2018.

Deer Park, IL

October 1, 2024

September 25, 2025

Education Inc.

Consolidated Balance Sheets

Balance Sheets

June 30, 2025

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Cash and cash equivalents

Accounts receivable, net of $ 688,848 and $ 340,060 allowance for doubtful accounts as of June 30, 2024 and 2023, respectively

Accounts receivable, net of $ 1,641,052 and $ 688,848 allowance for doubtful accounts as of June 30, 2025 and June 30, 2024, respectively

Prepaid expenses

Other receivables

Related party receivable

Total current assets

Property and equipment, net

Restricted cash

Operating lease right-of-use asset

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Common stock:

$ 0.001 par value, 100,000,000 shares authorized, 9,291,149 shares issued and outstanding

$ 0.001 par value, 100,000,000 shares authorized, 12,452,670 and 9,291,149 shares issued and outstanding as of June 30, 2025 and June 30, 2024, respectively

Additional paid in capital

Retained earnings (accumulated deficit)

Retained earnings

Total stockholders’ equity

2 unchanged sentences

Education Inc.

Consolidated Income Statements

the fiscal years ended June 30, 2024 and 2023

Income Statements

For the fiscal years ended June 30,

Tuition and related income, net

6 unchanged sentences

Operating income

Other income(expense)

Other income and expense

Interest expenses

1 unchanged sentence

Total other income

Income before income taxes

Income before income tax expenses

Income tax expenses

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Education Inc.

Consolidated Statements of Changes in Stockholders’ Equity

Statements of Changes in Stockholders’ Equity

the fiscal years ended June 30, 2025 and 2024

Preferred Stock

Retained Earnings (Accumulated

Balance, June 30, 2023

$ ( 666,916 )

Stock options exercised

Cumulative-effect adjustment (ASC 842)

Dividends paid

Stock-based compensation

Balance, June 30, 2024

Balance, Value

True up, reverse split

Issuance of common stock under acquisition agreement

Issuance of common stock, net of offering costs

Exercise of options

Stock-based compensation

Balance, June 30, 2025

Balance, Value

accompanying notes are an integral part of these consolidated financial statements.

Education Inc.

Consolidated Statements of Cash Flows

the fiscal years ended June 30, 2024 and 2023

Statements of Cash Flows

For the fiscal years ended June 30,

Cash flows provided by (used in) operating activities:

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Prepaid expenses

Other receivables

Other receivable

Related party receivable

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Cash flows used in investing activities:

Cash paid under APA

( 6,133,087 )

Purchases of property and equipment

Net cash used in investing activities

Cash flows provided by financing activities:

Dividend paid in cash

( 6,977,407 )

Cash flows provided by (used in) financing activities:

Proceeds from IPO, net of offering cost

Proceeds from exercise of options

1 unchanged sentence

Principal payments on debt

Net cash used in financing activities

( 1,051,318 )

Net cash provided by (used in) financing activities

Net increase cash and cash equivalents and restricted cash

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Non-cash purchase of financed lease assets

Non-cash dividend

Non-cash purchase of equipment

Prepaid expense reclassifies to offering cost

Common stock issued as part of APA

Promissory note under APA

Net identifiable assets acquired under APA

$ ( 205,670 )

accompanying notes are an integral part of these consolidated financial statements.

3 unchanged sentences

1 - Nature of Business

purposes of these financial statements, “Legacy,”, the “Company,” “we,” “our,” “us,”

or similar references refers to Legacy Education Inc.

and its consolidated subsidiaries, unless the context requires otherwise.

Education, LLC was formed on October 19, 2009 in the state of California as a limited liability company.

The Company operates as career

institution that focuses on real-life training by utilizing educational practices in different job markets.

The Company offers programs

in career paths such as healthcare, veterinary, medical information technology, business management, and green technology.

is accredited by the Accrediting Council for Continuing Education and Training (“ACCET”), and the Accrediting Bureau of Health

Education Schools (“ABHES”) and approved to operate in the state of California by the Bureau for Private Postsecondary Education

The consolidated financial statements include accounts of Legacy Education Inc.

d/b/a High Desert Medical College

(“HDMC”) and its wholly owned subsidiary, Legacy Education Monterey LLC (“Monterey”) d/b/a Central Coast College

(“CCC”), and its wholly owned subsidiary, Advanced Health Services, LLC d/b/a Integrity College of Health (“Integrity”).

Pursuant to an Agreement and Plan of Merger and Reorganization (the “Reorganization Merger”), dated September 1, 2021, effective

as of September 3, 2021 (the “Effective Date”), Legacy Education Merger Sub, LLC, a wholly owned subsidiary of Legacy Education

formed solely for the purpose of implementing the Reorganization Merger, merged with and into Legacy Education, LLC, with Legacy

Education, LLC surviving the merger and becoming a wholly owned subsidiary of Legacy Education Inc., a corporation formed on March 18,

2020 in the State of Nevada for the sole purpose of restructuring the Company from a member-owned Limited Liability Corporation to a

shareholder-owned C-Corporation.

On the Effective Date, in exchange for each Class A Unit owned in Legacy Education, LLC, the members

of Legacy Education, LLC received one share of common stock in Legacy Education Inc.

purposes of these financial statements, “Legacy,” the “Company,” “we,” “our,”

“us,” or similar references refers to Legacy Education Inc.

and its consolidated subsidiaries, unless the context

requires otherwise.

Legacy Education, LLC was formed on October 19, 2009 in the state of California as a limited liability company.

The Company operates as a career institution that focuses on real-life training by utilizing educational practices in different job

The Company offers programs in career paths such as healthcare, veterinary, medical information technology, business

management, and green technology.

The Company’s institutions are accredited by the Accrediting Council for Continuing

Education and Training (“ACCET”) or the Accrediting Bureau of Health Education Schools (“ABHES”) and

approved to operate in the state of California by the Bureau for Private Postsecondary Education (“BPPE”).

consolidated financial statements include accounts of Legacy Education Inc.

d/b/a High Desert Medical College (“HDMC”)

and its wholly-owned subsidiary, Legacy Education Monterey LLC (“Monterey”) d/b/a Central Coast College

(“CCC”), its wholly-owned subsidiary, Advanced Health Services, LLC d/b/a Integrity College of Health

(“Integrity”) and Legacy Education Antioch, LLC (“Antioch”) d/b/a Contra Costa Medical Career College

Pursuant to an Agreement and Plan of Merger and Reorganization (the “Reorganization Merger”),

dated September 1, 2021, effective as of September 3, 2021 (the “Effective Date”), Legacy Education Merger Sub, LLC, a

wholly-owned subsidiary of Legacy Education Inc.

formed solely for the purpose of implementing the Reorganization Merger, merged

with and into Legacy Education, LLC, with Legacy Education, LLC surviving the merger and becoming a wholly-owned subsidiary of

Legacy Education Inc., a corporation formed on March 18, 2020 in the State of Nevada for the sole purpose of restructuring the

Company from a member-owned Limited Liability Corporation to a shareholder-owned C-Corporation.

the Effective Date, in exchange for each Class A Unit owned in Legacy Education, LLC, the members of Legacy Education, LLC received

one share of common stock in Legacy Education Inc.

in a one for one exchange.

The members immediately

prior to the Reorganization Merger became the 100 % owners of Legacy Education Inc.

The members immediately prior to the

Reorganization Merger became the 100 %

owners of Legacy Education Inc.

immediately following the Reorganization Merger.

offers instruction in twenty nine programs including ultrasound technician, ultrasound technician associate of applied science degree,

medical billing and coding, vocational nursing, clinical medical assisting, pharmacy technician, dental assisting, medical

administrative vocational nursing associate of applied science degree and registered nursing

a wholly-owned subsidiary of HDMC, offers instruction in healthcare career training programs, and veterinary

career training.

offers instruction in thirty-three programs including ultrasound technician, ultrasound technician associate of applied science degree,

medical billing and coding, vocational nursing, clinical medical assisting, pharmacy technician, dental assisting, medical administrative

vocational nursing associate of applied science degree and registered nursing.

a wholly-owned subsidiary of HDMC, offers instruction in healthcare career training programs, and veterinary career training.

a wholly-owned subsidiary of HDMC, is an accredited college offering instruction in medical assisting, vocational nursing, medical insurance

coding and billing, diagnostic medical sonography (ultrasound technician) and Bachelors of Science in nursing (RN to BSN).

The accompanying consolidated financial statements, and all per share information

contained herein, have been retroactively adjusted to reflect the reverse stock split described in Note 16.

a wholly owned subsidiary of HDMC effective as of December 18, 2024, is accredited by ACCET and has been granted temporary approval to

participate in the Financial Student Aid programs by the Department of Education (“ED”) following the consummation of the

transaction discussed below in Note 3.

CCMCC offers vocational nursing, surgical technology, sterile processing technician, medical assisting,

diagnostic medical sonography, EKG/ECG technician, and medical administrative assistant/billing and coding specialist programs.

accompanying consolidated financial statements, and all per share information contained herein, have been retroactively adjusted to reflect

the reverse stock split described in Note 13.

Education Inc.

to Consolidated Financial Statements

Fiscal Years ended June 30, 2024 and 2023

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

2 – Summary of Significant Accounting Principals

of Consolidation

consolidated financial statements include the accounts of HDMC and its wholly-owned subsidiaries, CCC and Integrity.

All significant

intercompany balances and transactions have been eliminated in consolidation.

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.

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.

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

Actual results could differ from those estimates.

Significant items subject to

such estimates and assumptions include the assumptions used in the evaluation of the Company’s distinct performance

obligations, the valuation of equity instruments and allowance for credit losses related to accounts receivable.

Significant items subject to such estimates and assumptions include the assumptions

used in the evaluation of the Company’s distinct performance obligations, the valuation of equity instruments and allowance for

credit losses related to accounts receivable.

Reclassifications

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Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents.

These investments

are stated at cost, which approximates fair value.

of Credit and Restricted Cash

October 2018, Integrity received a notice from the U.S.

Department of Education (“ED”) requiring Integrity to post a letter

of credit in the amount of $ 138,977 due to the deficient composite score for the year ended December 31, 2017.

During the fiscal year

ended June 30, 2020, the Company received notice from ED permitting the Company to decrease the letter of credit to $ 98,382 .

maintained passing scores on its composite score since 2019.

The letter of credit is secured by cash on deposit with the issuing bank

and was extended through August 2023, when the ED released the Company from the letter of credit requirement.

Accounting Standards Update (“ASU”) 2016-18, Statements of Cash Flows – Restricted Cash, a statement of cash

flows explaining the change during the period in the total cash, cash equivalents, and amount generally described as restricted cash

or restricted cash equivalents is required.

The accompanying balance sheets as of June 30, 2024 and 2023 have been presented in accordance

with the guidance provided by ASU 2016-18 .

30, 2025 and 2024 approximately $ 10.38 million and $ 2.15 million, respectively, of cash equivalents was held in instruments

considered level 1 securities as defined in the “Fair Value of Financial Instruments” note below.

and Equipment

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are depreciated over the shorter of their lease term or their useful life.

February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations

by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under current

ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use

asset representing its right to use the underlying asset for the lease term on the balance sheet.

ASU 2016-02 is effective for fiscal

years beginning after December 15, 2021, using a modified retrospective approach and early adoption is permitted.

The Company adopted

ASU 2016-02 on July 1, 2022.

Company has elected to apply the short-term scope exception for leases with terms of 12 months or less at the inception of the lease

and will continue to recognize rent expense on a straight-line basis.

As a result of the adoption, on July 1, 2022, the Company recognized

a lease liability of approximately $ 5.7 million, which represented the present value of the remaining minimum lease payments using an

estimated incremental borrowing rate of 3.98 % .

As of July 1, 2022, the Company recognized a right-to-use asset of approximately $ 5.3

Lease expense did not change materially as a result of the adoption of ASU 2016-02.

Company accounts for leases in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification

(“ASC”) Topic 842 Leases, which requires the recognition of assets and liabilities by lessees for those leases classified

as operating leases under GAAP.

The Company determines if an arrangement is a lease at inception and evaluates the lease agreement to

determine whether the lease is a finance or operating lease.

The guidance requires that a lessee should recognize on the balance sheet

a liability to make lease payments and a right-to-use asset representing the Company’s right to use the underlying assets for the

term of the lease.

The guidance allows a lessee who enters into a lease with a term of 12 months or less to make an accounting policy

election by class of underlying assets not to recognize assets and liabilities.

Right-of-use (“ROU”) assets and lease liabilities

are recognized at commencement date based on the present value of lease payment over the lease term.

The Company uses its incremental

borrowing rate based on the information available at the commencement to determine the present value of lease payments over the lease

See Note 12 for more information about the Company’s lease-related obligations.

and Intangibles

represents the excess of the purchase price over the fair market value of the net assets (including intangibles) acquired on December

31, 2019 and January 15, 2019.

The Company has implemented the Business Combinations Topic of the Financial Accounting Standards Board

(“FASB”) Accounting Standards Codification (“ASC”) 350, Intangibles - Goodwill and Other.

Company has implemented the Business Combinations Topic FASB ASC 350, Intangibles - Goodwill and Other.

Goodwill represents

the excess of the purchase price over the fair market value of the net assets (including intangibles) acquired on December 31, 2019,

January 15, 2019 and on December 18, 2024.

tradename, and accreditation are deemed to have an indefinite life, and course curriculum has a definite life of approximately 18 years.

2 unchanged sentences

Education Inc.

to Consolidated Financial Statements

Fiscal Years ended June 30, 2024 and 2023

Note 2 – Summary of Significant

Accounting Principals (Continued)

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

Company reviews intangible assets (with a definite life), excluding goodwill, accreditation and tradenames, for impairment when events

or changes in circumstances indicate the carrying amount may not be recoverable.

We measure the recoverability of these assets by comparing

the carrying amounts to the future undiscounted cash flows that the assets are expected to generate.

If the carrying value of the assets

are not recoverable, the impairment recognized is measured as the amount by which the carrying value of the asset exceeds its fair value.

The Company measures the recoverability of these assets

by comparing the carrying amounts to the future undiscounted cash flows that the assets are expected to generate.

If the carrying value

of the assets are not recoverable, the impairment recognized is measured as the amount by which the carrying value of the asset exceeds

its fair value.

There were no impairments for the periods presented.

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Fair value estimates are based on assumptions concerning the amount and timing of estimated future

The Company had no long-lived asset impairments as of June 30, 2024 and 2023, respectively.

The Company had no long-lived asset impairments as of June 30, 2025 and June 30, 2024.

is recognized when control of promised goods or services is transferred to the Company’s customers in an amount of consideration

1 unchanged sentence

The Company follows the five steps approach for

revenue recognition under ASC 606:

(i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract,

(iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize

revenue when (or as) the Company satisfies a performance obligation.

revenue recognition under FASB ASC 606:

(i) identify the contract(s) with a customer, (ii) identify the performance obligations in the

contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract,

and (v) recognize revenue when (or as) the Company satisfies a performance obligation.

Company identifies a contract for revenue recognition when there is approval and commitment from both parties, the rights of the parties

23 unchanged sentences

from a class.

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

transaction price is stated in the contract and known at the time of contract inception, as such there is variable consideration for

17 unchanged sentences

as well as the determination of the impact of the constraints preventing the variable consideration from being recognized in revenue.

Education Inc.

to Consolidated Financial Statements

Fiscal Years ended June 30, 2024 and 2023

2 – Summary of Significant Accounting Principals (Continued)

Disaggregation

tuition and related revenue consist of the following during the fiscal years ended June 30, 2024 and 2023:

tuition and related revenue consist of the following during the years ended June 30, 2025 and 2024:

Schedule of Disaggregation

2 unchanged sentences

Total revenue

Company operates one reportable business segment offering career-focused, post-secondary education services to students at all stages

of adult life, from recent high school graduates to working parents, through its accredited academic institutions.

The Company’s

primary revenue source is derived from educational programs and services provided at its colleges through tuition and lab fees as well

as fees for supporting educational programs such as books and registration costs.

as a cohesive educational services company, the Company offers its products and services in the State of California at a series of institutions,

using a centralized management approach for all educational services and support functions.

Chief Executive Officer (“CEO”) serves as the Chief Operating Decision Maker (“CODM”).

The CODM evaluates the

Company’s performance based on consolidated net income.

This measure aligns with the Company’s consolidated financial statements

and serves as the basis for resource allocation and performance assessment.

The measure of segment assets is reported on the balance

sheet as total consolidated assets.

The CODM monitors profitability and strategic growth initiatives on a consolidated basis, without

disaggregating profit or loss into separate operating segments.

The Company determined there are no significant segment expenses that

require a separate disclosure.

The consolidated net income is used to assess overall company performance, benchmark against industry

standards, and identify profitability trends, which guides resource allocation and investment in expansion and program upgrades.

CODM also evaluates company performance using operating income.

Operating income provides the CODM with a focused view of the Company’s

profitability excluding the effects of financing activities, tax strategies, and other non-operating items.

This measure enables the

CODM to assess operational efficiency, monitor performance trends, and evaluate the effectiveness of strategies aimed at revenue generation

and cost management.

for Credit Losses

15 unchanged sentences

Company expenses advertising cost as incurred.

Advertising costs amounted to $ 4,124,485 and

$ 3,589,432 for the

years ended June 30, 2024, and 2023, respectively.

Company utilizes ASC 718, Stock Compensation, related to accounting for share-based payments and, accordingly, records compensation

Advertising costs amounted to $ 4,749,214 and $ 4,124,485 for the years ended June 30, 2025,

and 2024, respectively.

Advertising costs are included in general and administrative expenses on the consolidated income statements.

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

Company utilizes FASB 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.

15 unchanged sentences

Value of Financial Instruments

Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, accounts

payable and accrued liabilities, deferred, unearned tuition, debt and finance lease obligations.

carrying values of the Company’s financial instruments approximate fair value.

ASC 820, Fair Value Measurements and Disclosure s (“ASC 820”) establishes a framework for all fair value measurements

and expands disclosures related to fair value measurement and developments.

ASC 820 defines fair value as the price that would be received

to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, accounts payable and accrued

liabilities, deferred, unearned tuition, debt and finance lease obligations.

The carrying values of the Company’s financial instruments

approximate fair value.

ASC 820, Fair Value Measurements (“ASC 820”) establishes a framework for all fair value measurements and expands disclosures

related to fair value measurement and developments.

ASC 820 defines fair value as the price that would be received to sell an asset or

paid to transfer a liability in an orderly transaction between market participants at the measurement date.

820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:

4 unchanged sentences

of Credit Risk

substantial portion of revenues and ending accounts receivable at June 30, 2024 and 2023 are a direct result of the Company’s participation

in Financial Student Aid (“FSA”) programs, which represents a primary source of student tuition.

The FSA programs are subject

to political budgetary considerations.

substantial portion of revenues and ending accounts receivable at June 30, 2025 and June 30, 2024 are a direct result of the Company’s

participation in Financial Student Aid (“FSA”) programs, which represents a primary source of student tuition.

The FSA programs

are subject to political budgetary considerations.

There is no assurance that funding will be maintained at current levels.

The FSA programs are

subject to significant regulatory requirements.

The FSA programs

are subject to significant regulatory requirements.

Any regulatory violation could have a material effect on the Company.

Education Inc.

to Consolidated Financial Statements

Fiscal Years ended June 30, 2024 and 2023

2 – Summary of Significant Accounting Principals (Continued)

Company maintains its cash and cash equivalents in various financial institutions.

4 unchanged sentences

The Company maintains cash balances in excess of these limits from time to time.

of June 30, 2024 and 2023, $ 2.15

and $ 6.1 million, respectively, was maintained in a redeemable money market account bearing interest at approximately 4.88 %

of June 30, 2025 and June 30, 2024, $ 10.38 million and $ 2.15 million, respectively, was maintained in a redeemable money market account

bearing interest at approximately 4.5 % per annum.

and Contingencies

10 unchanged sentences

The Company expenses legal fees as incurred.

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

requires management to evaluate tax positions taken by the Company and recognize a tax liability if the Company has taken an uncertain

9 unchanged sentences

Penalties, if any, are included in general

and administration expenses on the income statement.

and administrative expenses on the income statement.

The estimated federal and state effective tax rates are 21 % and 8.84 %, respectively.

Growth Company

Company has elected to be an emerging growth company as defined under the Jumpstart Our Business Startups Act of 2012 (“JOBS

Included with this election, the Company has also elected to use the provisions within the JOBS Act that allow

companies that go public to continue to use the private company adoption date rules for new accounting policies.

The Company will

remain an emerging growth company until the earlier of (i) the last day of the Company’s fiscal year following the fifth

anniversary of the closing of the Company’s initial public offering of its securities, (ii) the last day of the fiscal year

(a) in which the Company

total annual gross revenue of at least $1.235 billion or (b) in which the Company is deemed to be a large accelerated filer

under the rules of the Securities and Exchange Commission, and (iii) the date on which the Company

has issued more than $1.0 billion of non-convertible debt in any three-year period .

Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the

“Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.

As such, the Company

is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public

companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the

auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, reduced disclosure obligations

regarding executive compensation in the Company’s periodic reports and proxy statements, and exemptions from the requirements

of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not

previously approved.

If some investors find the securities less attractive as a result, there may be a less active trading market

for securities and the prices of securities may be more volatile.

addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended

transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards (that is,

an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise

apply to private companies).

The Company intends to take advantage of the benefits of this extended transition period.

Additionally, the Company is a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.

Smaller reporting

companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited

financial statements.

The Company will remain a smaller reporting company until the last day of the fiscal year in which (1) the market

value of the common stock held by non-affiliates equals or exceeds $250 million as of the as of the last business day of its most recently

completed second fiscal quarter, or (2) the annual revenues equaled or exceeded $100 million during its most recently completed fiscal

year and the market value of the common stock held by non-affiliates equals or exceeds $700 million as of the last business day of its

most recently completed second fiscal quarter.

ASC 260, Earnings Per Share, requires dual presentation of basic and diluted earnings per share (“EPS”) with a reconciliation

1 unchanged sentence

EPS excludes dilution.

Diluted EPS is calculated using the treasury stock method, and reflects the potential dilution that could occur if securities or other contracts to issue common

stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the

Diluted EPS is calculated using the treasury stock method, and reflects the potential dilution that could occur

if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common

stock that then shared in the earnings of the entity.

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

following table provides a reconciliation of the numerators and denominators used to determine basic and diluted net income per common

share for years ended June 30, 2025 and 2024:

of Reconciliation of Basic and Diluted

Schedule of Reconciliation of Basic and Diluted

Weighted-average shares outstanding, basic

Common stock warrants

Dilutive impact of share-based instruments

1 unchanged sentence

Net income per share

Education Inc.

to Consolidated Financial Statements

Fiscal Years ended June 30, 2024 and 2023

2 – Summary of Significant Accounting Principals (Continued)

Accounting Pronouncements

In June 2016, the FASB issued

ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic

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

The amendments are effective for fiscal years beginning after December 15, 2019.

Recently, the FASB issued the final ASU to delay

adoption for smaller reporting companies for fiscal years beginning after December 15, 2022.

We adopted ASU 2016-13 on July 1, 2023 and

it did not have a material impact on our consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU 2020-06,

Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own

Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.

This ASU amends the guidance

on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends

the related earnings per share guidance for both Subtopics.

The ASU will be effective for smaller reporting companies for annual reporting

periods beginning after December 15, 2023 and interim periods within those annual periods and early adoption is permitted.

We are currently

evaluating the impact of the new guidance on our consolidated financial statements.

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.

August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts

in an Entity’s Own Equity.

This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts

in an entity’s 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.

November 2023, the FASB issued ASU 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (“ASU

2023-07”), which requires incremental disclosures related to a public entity’s reportable segments.

Required disclosures

include, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision

maker (“CODM”) and included within each reported measure of segment profit or loss, an amount for other segment items

(which is the difference between segment revenue less segment expenses and less segment profit or loss) and a description of its

composition, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit

or loss in assessing segment performance and deciding how to allocate resources.

The standard also permits disclosure of more than

one measure of segment profit.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods

within fiscal years beginning after December 15, 2024.

There are aspects of ASU 2023-07 that apply to entities with one reportable

The Company adopted this guidance in the fiscal fourth quarter of 2025.

The adoption of ASU 2023-07 is reflected in Note 2,

“Summary of Significant Accounting Policies - Segment Reporting.”.

3 – Acquisition

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 HDMC’s 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 .

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.

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.

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

following is a summary of the estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition:

Schedule of Assets and Liabilities Acquisition

Current and other assets

Property and equipment

Total assets acquired

Liabilities assumed (excluding debt - see Note 9)

( 2,846,489 )

Net assets acquired

$ ( 205,670 )

Purchase price

Accreditation

Course Curriculum

Total excess purchase price

amounts recorded above related to the acquisition are subject to adjustment as the Company has not yet completed the final allocation

of the purchase price.

The Company has one year from the date of acquisition to complete its valuation of assets and liabilities assumed.

are the supplemental consolidated financial results of the Company and CCMCC on an unaudited pro forma basis, as if the acquisitions

had been consummated as of the beginning of the fiscal year 2024 (i.e., July 1, 2023).

Schedule of Revenue and Net Income from Subsidiary

For the Years Ended

pro forma financial information presented above has been prepared by combining the Company’s historical results and the historical

results of CCMCC and adjusting those results to reflect the effects of the acquisition as if it occurred on July 1, 2023.

These results

do not purport to be indicative of the results of operations had the acquisition occurred on the date indicated above, or that may result

in the future, and do not reflect potential synergies or additional costs following the acquisition.

4 - Intangible Assets

intangibles consisted of the following as of June 30, 2024 and June 30, 2023:

Company’s intangible assets consisted of the following as of June 30, 2025 and June 30, 2024:

of Intangible Assets

6 unchanged sentences

Intangibles net

of June 30, 2024 and 2023, no impairment of the Company’s goodwill, nor other intangibles with an indefinite life was required

related to its previous acquisitions of CCC and Integrity.

Although the ACCET accreditation has an indefinite life, the accreditation

requires renewal every five years.

CCC’s ACCET accreditation was most recently renewed in April 2020 and its next renewal is in

The Company recognized $ 5,011 and $ 5,011 in amortization expense for the fiscal year ended June 30, 2024 and 2023.

the Accrediting Bureau of Health Education Schools (“ABHES”) has an indefinite life, the accreditation requires renewal every

Integrity’s next ABHES accreditation renewal is in February 28, 2026.

100 % of goodwill is expected to be deductible

for federal income tax purposes and will be amortized over 15 years on a straight-line basis.

of June 30, 2025 and June 30, 2024, no

impairment of the Company’s goodwill, nor other intangibles

with an indefinite life was required related to its previous acquisitions of CCC, Integrity and CCMCC.

The Company recognized $ 12,920

and $ 5,011 , respectively, in amortization expense for years ended June 30, 2025 and 2024.

the ACCET accreditation has an indefinite life, the accreditation requires renewal every five years.

CCC’s ACCET accreditation

was most recently renewed in April 2025 and its next renewal is in April 2030.

accreditation was most recently renewed in April 2022 and its next renewal is in April 2026.

ABHES accreditation has an indefinite life, the accreditation requires renewal every five years.

Integrity’s next ABHES accreditation

renewal is in February 2026.

of goodwill is expected to be deductible for federal income tax purposes and will be amortized over 15

years on a straight-line basis.

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

5 - Property and Equipment

7 unchanged sentences

Furniture, fixtures and other equipment

Furniture, Fixtures and Other Equipment [Member]

and equipment gross

Less accumulated depreciation and amortization

2 unchanged sentences

Property and equipment, net

and amortization expense associated with property and equipment totaled $ 260,025 and $ 219,477 for the years ended June 30, 2024 and 2023,

and amortization expense associated with property and equipment totaled $ 400,455 and $ 260,025 for years ended June 30, 2025 and 2024,

respectively.

4 unchanged sentences

regardless of financial need, for up to 5 years.

The long-term portion of student receivables utilizing the Tuition Flex program was

The long-term portion of student receivables utilizing the TuitionFlex program was $ 1,966,137

and $ 1,381,194 as of June 30, 2025 and June 30, 2024, respectively.

6 unchanged sentences

Total prepaid expenses

Education Inc.

to Consolidated Financial Statements

Fiscal Years ended June 30, 2024 and 2023

8 – Other Receivables

4 unchanged sentences

Other advance

Receivable from CCMCC Seller

Employee retention credit

Total other receivables

Company paid $ 106,846 federal income taxes on behalf of a foreign investor in Legacy, and the amount due back to the Company was $ 94,454

as of June 30, 2024 and June 30, 2023.

Company paid $ 106,846 of federal income taxes on behalf of a foreign investor in Legacy in the year ended June 30, 2020, and the amount

due back to the Company as of each of June 30, 2025 and June 30, 2024 was $ 94,454 .

the fiscal year ended June 30, 2021, the Company applied for certain Employee Retention Credits (“ERTC”) under the CARES

2 unchanged sentences

$ 37,720 and $ 46,440 , respectively.

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

9 – Accounts Payable and Accrued Liabilities

9 unchanged sentences

10 - Debts and Other Liabilities

(1) Promissory

Company received $ 750,000 in proceeds from several debtors, including $ 150,000 from related parties.

Under 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

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 a future Initial

Public Offering.

Notes and Related Parties Debt

Company received $ 750,000 in proceeds from several creditors, including $ 150,000 from related parties in the form of unsecured promissory

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

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.

of Carrying Amount of Promissory Note

3 unchanged sentences

Promissory note issued on December 30, 2019, related party

Promissory note issued on February 6, 2020

Total other debt

promissory note issued on December 30, 2019 to a related party was repaid during the fiscal year ended June 30, 2023.

The note was repaid

via a cash payment for principal amounting to $ 88,733 , and $ 11,267 was satisfied as an exercise of 43,333 common stock options at $ 0.26

September 2023, the promissory note issued on February 6, 2020 for $ 100,000 was repaid in full.

(2) Equipment

June 2019, the Company entered into an equipment loan for $ 26,647 .

The note accrues interest at a rate of 6.5 % per annum and requires

60 equal monthly payments .

As of June 30, 2024 and June 30, 2023, the principal balance of the promissory note was $ 0 and $ 6,042 , respectively.

August 2019, the Company entered into an equipment loan for $ 26,997 .

The note accrues interest at a rate of 6.95 % per annum and requires

60 equal monthly payments .

As of June 30, 2024 and June 30, 2023, the principal balance of the promissory note was $ 0 and $ 7,652 , respectively.

Education Inc.

to Consolidated Financial Statements

Fiscal Years ended June 30, 2024 and 2023

Note 9 - Debts and Other

Liabilities (Continued)

further note issued on February 6, 2020 in the amount of $ 100,000 was repaid in cash in September 2023.

Equipment Loan

January 2023, the Company entered into an equipment loan for $ 30,744 .

6 unchanged sentences

48 equal monthly payments.

As of June 30, 2024 and June 30, 2023, the principal balance of the promissory note was $ 27,723 and $ 0 , respectively.

As of June 30, 2025 and June 30, 2024, the principal balance of the promissory note was $ 19,660 and $ 27,723 ,

respectively.

November 2023, the Company entered into an equipment loan for $ 14,610 .

1 unchanged sentence

48 equal monthly payments.

As of June 30, 2024 and June 30, 2023, the principal balance of the promissory note was $ 12,582 and $ 0 , respectively.

As of June 30, 2025 and June 30, 2024, the principal balance of the promissory note was $ 9,265 and $ 12,582 ,

respectively.

December 2023, the Company entered into an equipment loan for $ 11,920 .

1 unchanged sentence

36 equal monthly payments.

As of June 30, 2024 and June 30, 2023, the principal balance of the promissory note was $ 9,853 and $ 0 , respectively.

As of June 30, 2025 and June 30, 2024, the principal balance of the promissory note was $ 6,160 and $ 9,853 ,

respectively.

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

February 2024, the Company entered into an equipment loan for $ 35,612 .

1 unchanged sentence

36 equal monthly payments.

The first payment will be on April 1, 2024.

As of June 30, 2024 and June 30, 2023, the principal balance of

the promissory note was $ 32,950 and $ 0 , respectively.

The first payment was on April 1, 2024.

As of June 30, 2025 and June 30, 2024, the principal balance of the

promissory note was $ 21,795 and $ 32,950 , respectively.

June 2024, the Company entered into an equipment loan for $ 48,966 .

1 unchanged sentence

48 equal monthly payments.

The first payment will be on June 1, 2024.

As of June 30, 2024 and June 30, 2023, the principal balance of

the promissory note was $ 48,125 and $ 0 , respectively.

The first payment was on June 1, 2024.

As of June 30, 2025 and June 30, 2024, the principal balance of the

promissory note was $ 37,752 and $ 48,125 , respectively.

July 2024, the Company entered into an equipment loan for $ 39,189 .

The note accrues interest at a rate of 11.15 % per annum and requires

48 equal monthly payments.

The first payment was on July 1, 2024.

As of June 30, 2025 and June 30, 2024, the principal balance of the

promissory note was $ 30,946 and $ 0 , respectively.

June 2025, the Company entered into an equipment loan for $ 528,176 .

The note accrues interest at a rate of 9.392 % per annum and requires

48 equal monthly payments.

The first payment was on June 26, 2025.

As of June 30, 2025 and June 30, 2024, the principal balance of the

promissory note was $ 515,029 and $ 0 , respectively.

CCMCC acquisition Seller Loan

part of the acquisition described in Note 3, Antioch issued the seller of CCMCC a promissory note in the principal amount of $ 400,000 .

Under the terms of the note, interest shall accrue at 6 % and shall be repaid in twelve equal monthly payments of principal and interest.

As of June 30, 2025, the principal balance of the promissory note of $ 202,992 is presented as a current liability on the accompanying

consolidated balance sheet.

December 31, 2019, the Company acquired Integrity, assuming its two bank loans, which are secured by all business assets of the Company.

3 unchanged sentences

Bank loan #1, monthly payment $ 803.69 , due in 110 months , effective interest rate 6.44 %

Bank loan #2, monthly payment $ 5,672.86 start on November 23, 2020, due in 48 months

Bank loan #2, monthly payment $ 5,672.86 starting on November 23, 2020, due in 48 months

Total bank loans

maturities over the remaining term of total debt for (1) to (3) are as follows:

of Future Maturities over the Remaining of Debt

of Future Maturities over Remaining Term of Debt

Long-term debt

1 unchanged sentence

Long-term portion of debt

(1) Includes $ 50,000

related party debt

Includes $ 50,000 related party debt

11 - Related Party Transactions

shareholder of the Company was paid $ 90,000 and $ 90,000 as consulting fees in the years ended June 30, 2025 and 2024, respectively.

director of the Company was paid $ 78,000 and $ 83,000 in consulting fees in the years ended June 30, 2024 and 2023, respectively.

A director of the Company was paid $ 132,988 in consulting fees in the years

ended June 30, 2024.

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 balance of this note was $ 50,000 as of June 30, 2024 and June 30, 2023.

of June 30, 2024 and June 30, 2023, the Company had a balance due from a shareholder, who is also the President of the Company, totaling

$ 0 and $ 69,975 .

This amount was included in the related party receivable on the balance sheet.

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.

Education Inc.

to Consolidated Financial Statements

Fiscal Years ended June 30, 2024 and 2023

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

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.

Director’s 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 .

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.

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.

12 – Lease Commitments

1 unchanged sentence

The related finance liability has an implied interest rate of 11.16 %

per annum and requires 5

equal annually payments on September 1, 2023.

As of June 30, 2024 and June 30, 2023, the balance of the finance liability was $ 272,669

respectively.

per annum and requires 5 equal annual payments due on September 1 of each year.

As of June 30, 2025 and June 30, 2024, the balance of

the finance liability was $ 215,409 and $ 272,669 , respectively.

present value of future minimum lease payments due at June 30, 2025, was as follows:

5 unchanged sentences

Long term portion

Company has determined to amortize the lease over the useful life of the equipment or ten years and put the equipment into service in

September 2024.

The Company recorded amortization of $ 28,337 and $ 0 in the years ended June 30, 2025 and 2024, respectively.

Company leases its instructional facilities under non-cancelable operating leases expiring at various dates through 2034.

6 unchanged sentences

expense recorded and the amount paid is reflected as deferred rent on the accompanying balance sheets for those leases with rent escalation

the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present

value of the lease payments.

The Company has elected the practical expedient to use the risk-free rate as its incremental borrowing rate.

30, 2024 are as follows:

Company uses its incremental borrowing rate based on the information available at the commencement to determine the present value of

lease payments over the lease term.

As of June 30, 2025, the weighted average incremental borrowing rate used by the Company was approximately

6.7 %, and the weighted average remaining years left on outstanding leases was 7.58 years.

present value of future minimum lease payments due at June 30, 2025 was as follows:

of Future Minimum Operating Lease Payments

1 unchanged sentence

imputed interest

( 4,593,403 )

Current portion of operating lease

Long term portion of operating lease

rent expense and related taxes and operating expenses under operating leases for the fiscal years ended June 30, 2024 and 2023 were $ 3,368,780

rent expense and related taxes and operating expenses under operating leases for the years ended June 30, 2025 and 2024 were $ 4,483,574

and $ 3,368,780 , respectively.

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

balance sheet information related to leases was as follows:

8 unchanged sentences

of Other supplemental Information

For the years ended June 30,

Cash paid for operating lease

Education Inc.

to Consolidated Financial Statements

Fiscal Years ended June 30, 2024 and 2023

13 – Stockholders’ Equity

September 9, 2024, the Company’s stockholders approved an amendment to the Company’s articles of incorporation to effectuate

a 1-for-2 reverse split of the Company’s common stock.

The amendment to the Company’s 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.

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, which have liquidation preference over

the common stock and are non-voting.

shares of common stock were issued during the year ended June 30, 2024.

During the fiscal year ended June 30, 2023, the Company issued 86,666 shares

of common stock at $ 0.52 per share under notice of exercise options.

of June 30, 2024 and June 30, 2023 the Company had 9,291,149 shares of common stock outstanding, and no shares of preferred stock issued

and outstanding.

shares are designated as common stock, and 10,000,000 shares are designated as preferred stock.

August 2024, 76,000 stock options were exercised at $ 0.52 per share of common stock.

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.

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 additional 375,000 shares of common stock to cover allotments.

December 18, 2024, the Company issued 118,906 common shares pursuant to the terms of the APA.

total of 89,602 stock options were exercised during the year ended June 30, 2025 at $ 3.74 per share.

shares were issued during the year ended June 30, 2024.

of June 30, 2025 and June 30, 2024 the Company had 12,452,670 and 9,291,149 shares of common stock outstanding, respectively, and no

shares of preferred stock issued and outstanding.

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

14 - Warrants

Classified Warrants

2024 Common Stock Warrants

September 2024, the Company issued warrants to certain underwriters to purchase 143,750 shares of the Company’s common stock in

connection with the Company’s initial public offering for services provided.

The warrants were immediately exercisable at a price

of $ 4.60 per share and have an expiration date of September 27, 2029.

At issuance, the fair value of the warrants was determined to be

$ 227,700 using the Black-Scholes model.

As the warrants are accounted for as an equity issuance cost, the fair value of the warrants

was recorded within additional paid-in capital on the Company’s consolidated balance sheets.

The warrants are not remeasured in

future periods as they meets the conditions for equity classification.

Company valued the warrants, based on a Black-Scholes Option Pricing Method, which included the following inputs:

of inputs for Warrant Fair Value measurement

Expected term

Expected volatility

Risk-free interest rate

Expected dividend yield

15 - Share-Based Compensation Plans

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.

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.

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.

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.

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.

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 and non-employee service providers pursuant to its 2021 Equity Incentive Plan.

September 27, 2024, the Company granted stock options to purchase an aggregate of 250,000 shares of its common stock at an exercise price

of $ 4.00 per share to employees, directors, consultants and non-employee service providers pursuant to its 2021 Equity Incentive Plan.

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.

April 2, 2025, the Company granted stock options to purchase an aggregate of 479,648

shares of its common stock at an exercise price of $ 7.25

per share to employees and directors pursuant to its 2021 Equity Incentive Plan.

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.

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

summary of the activity related to stock option units granted is as follows:

1 unchanged sentence

Units Granted

Summary of Stock Options Outstanding

Weighted Average Exercise

Weighted Average

Contractual Term (Years)

Summary of Stock Options

Outstanding as of June 30, 2023

1 unchanged sentence

Outstanding as of June 30, 2024

Exercisable as of June 30, 2024

Forfeited, canceled, or expired

1 unchanged sentence

Exercisable as of June 30, 2025

Education Inc.

to Consolidated Financial Statements

Fiscal Years ended June 30, 2024 and 2023

13 - Share-Based Compensation Plans (Continued)

summary of the activity related to vested and unvested stock option units granted is as follows:

of Vested and Unvested Stock Options Units Granted

Options Outstanding

Contractual Life

Balance – June 30, 2023, unvested

4 unchanged sentences

Balance – June 30, 2024, unvested

Company valued these options using the Black Scholes model utilizing volatility 45 %, and a risk-free rate of 4.18 %.

The fair value of

the options was $ 1.84 per option.

Company recorded share-based compensation expense of $ 1,882,076

during the fiscal year ended June 30, 2024, which is included in educational services.

Unamortized compensation expense associated with unvested options is $ 737,333

as of June 30, 2024.

The weighted average period over which these costs are expected to be recognized is approximately 2.75

Options issued

Options vested

Options expired

Balance – June 30, 2025, unvested

Company valued options issued in April 2024 using the Black Scholes model utilizing volatility 45 %, and a risk-free rate of 4.18 %.

fair value of the options was $ 1.84 per option.

Company valued options issued in September 2024 using the Black Scholes model utilizing volatility 45 %, and a risk-free rate of 3.75 %.

The fair value of the options was $ 1.94 per option.

Company valued options issued in April 2025 using the Black Scholes model utilizing volatility 55 %, and a risk-free rate of 4.01 %.

fair value of the options was $ 4.05 per option.

Company recorded share-based compensation expense of $ 552,800 and $ 1,882,076 during the years ended June 30, 2025 and 2024, respectively,

which is included in educational services in the consolidated income statements.

Unamortized compensation expense associated with unvested

options was $ 832,205 and $ 737,333 as of June 30, 2025 and June 30, 2024, respectively.

The weighted average period over which these costs

are expected to be recognized is approximately 2.00 and 2.75 years.

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

16 - Income Tax

36 unchanged sentences

Income tax expense

Education Inc.

to Consolidated Financial Statements

Fiscal Years ended June 30, 2024 and 2023

14 - Income Tax (Continued)

components of the Company’s deferred income tax assets included in deferred income taxes, non-current on the balance sheets are

3 unchanged sentences

Deferred tax assets:

Deferred rent, right-of-use asset and lease liability

Lease liability and deferred rent

Allowance for doubtful accounts

5 unchanged sentences

Deferred tax liability:

Right of use asset

( 4,503,369 )

Property and equipment and intangible assets

Deferred tax liability

( 5,293,530 )

Net deferred tax asset

1 unchanged sentence

As of June 30, 2024, the earliest tax year still subject

to examination for federal and state purposes is the fiscal year ended June 30, 2021.

to examination for federal purposes is the fiscal year ended June 30, 2022 and state purposes is the fiscal year ended June 30, 2021.

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

17 - Other Commitments and Contingency

1 unchanged sentence

financial responsibility and administrative capability.

In addition, the Company is accredited with ACCET and ABHES and approved by other

agencies and must comply with rules and regulations of the accrediting body.

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.

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 with all regulatory requirements as of the date of the financial statements.

In addition, the Company’s 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.

Company is subject to extensive regulation by federal and state governmental agencies and accrediting bodies.

3 unchanged sentences

the various federal student financial assistance programs under Title IV of the Higher Education Act.

Defense to Repayment

October 28, 2016, ED published its new regulations with an effective date of July 1, 2017.

The new regulations allow a borrower to assert

a defense to repayment on the basis of a substantial misrepresentation, any other misrepresentation in cases where certain other factors

are present, a breach of contract or a favorable non-default contested judgment against a school for its act or omission relating to

the making of the borrower’s loan or the provision of educational services for which the loan was provided.

In addition, the financial

responsibility standards contained in the new regulations establish the conditions or events that trigger the requirement for an institution

to provide ED with financial protection in the form of a letter of credit or other security against potential institutional liabilities.

Triggering conditions or events include, among others, certain state, federal or accrediting agency actions or investigations.

regulations also prohibits schools from requiring that students agree to settle future disputes through arbitration.

Management believes

no misrepresentations have occurred nor has any agency actions or investigations occurred as of the date of these financial statements.

described above, ED requires institutions to meet standards of financial responsibility.

1 unchanged sentence

when the composite score is at least 1.5.

The Company’s composite score was 3.0 for the fiscal year ended June 30, 2023.

The Company’s

composite score calculation for the fiscal year ended June 30, 2024 has not been completed as of the date of these financial statements

and is due on December 31, 2024.

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.

Company derives a substantial portion of its revenues from student financial aid received by its students under the Title IV programs

3 unchanged sentences

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”).

institution fails to satisfy the test for one year, its participation status becomes provisional for two consecutive fiscal years.

the test is not satisfied for two consecutive years, eligibility to participate in Title IV programs is lost for at least two fiscal

Using ED’s cash-basis, regulatory formula under the 90/10 Rule, as in effect for its 2023 fiscal year, HDMC, CCC and Integrity

derived 84.53%,75.48% and 88.14% for its 90/10 revenue from Title IV program funds, respectively.

The 90/10 calculation for fiscal year ended June 30, 2024 has not yet been completed as of the date of these financial

statements and is due on December 31, 2024.

Company does not believe it is a party to any other pending or threatened litigation arising from services currently or formerly performed

by the Company.

To the extent that there may be other pending or threatened litigation that management is unaware of, they do not believe

there to be any possible claims that could have a material adverse effect on their business, results of operations or financial condition.

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, respectively, for the fiscal year ended June 30, 2024.

The 90/10 calculations for fiscal year ended June

30, 2025, for each of our institutions are due to ED on December 31, 2025.

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.

18 – Subsequent Events

Effective July 1, 2024 the Company entered into a

sublease agreement amending a lease originally entered into January 21, 2016, as amended, to increase usage at the premises to 37,914

square feet at a facility located in Salinas, CA expiring July 31, 2032 with a base rent of $ 64,051 monthly, and such additional rent

as may be applicable including a proportional share of utilities and operating costs.

Concurrent with the execution of the lease the Company

remitted an additional deposit of $ 37,750 .

Reverse Stock Split

On September 9, 2024, our stockholders

approved an amendment to our articles of incorporation to effect a 1-for-2 reverse split of our common stock.

The amendment to our certificate

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.

September 27, 2024, the Company completed its initial public offering of 2,500,000 shares, priced at $ 4.00 per share.

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.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data