What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-09-24 compared with 2025-09-25 · 594 added, 462 removed, 624 unchanged (63% of the section changed)

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the fiscal years ended June 30, 2026 and 2025

Education Inc.

High Desert Medical College)

Central Coast College)

Integrity College of Health)

(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

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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.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Members of the Board of Directors and Shareholders of

Education Inc.

on the Financial Statements

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

(the “Company”) as of June 30, 2026 and

2025, 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, 2026, 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, 2026 and 2025, and the results of its operations and its cash flows for each of the years in the two years ended June

30, 2026, 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.

Accordingly, we express no such opinion.

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.

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

We have served as the Company’s auditor since 2018.

Deer Park, IL

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Financing lease, net of current portion

Other liabilities

Operating lease liability, net of current portion

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$ 0.001 par value, 10,000,000 shares authorized;

no shares issued and outstanding

no shares issued

and outstanding

Common stock:

$ 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

$ 0.001 par value, 100,000,000 shares

authorized, 12,797,221 and 12,452,670 shares issued and outstanding as of June 30, 2026 and June 30, 2025,

Additional paid in capital

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Other income and expense

Loss on disposal of fixed assets

Loss on debt settlement

Interest expenses

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Balance, June 30, 2024

Stock-based compensation

Balance, June 30, 2024

True up, reverse split

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Balance, June 30, 2025

Issuance of common stock under SELF agreement

Cashless exercise of warrants

Exercise of options

Stock-based compensation

Balance, June 30, 2026

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

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Cash flows provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Loss on disposal of fixed assets

Loss on debt settlement

Non cash compensation

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Deferred income tax

Provision for allowance for doubtful accounts for accounts receivable and contracts receivable

Provision for credit losses

Changes in assets and liabilities:

Accounts receivable

Accounts receivable, net

( 8,985,834 )

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Purchases of property and equipment

( 1,345,816 )

Net cash used in investing activities

( 1,345,816 )

( 6,977,407 )

Cash flows provided by (used in) financing activities:

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Net cash provided by (used in) financing activities

Net increase cash and cash equivalents and restricted cash

Net increase in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash, beginning of year

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Supplemental disclosure of noncash activities

Non-cash purchase of financed lease assets

Non-cash purchase of equipment

Prepaid expense reclassifies to offering cost

Prepaid expense reclassified to offering costs

Common stock issued as part of APA

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$ ( 205,670 )

Common stock issued to settle debt

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

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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.

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.

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 a 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.

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”).

The consolidated financial statements include accounts of Legacy Education Inc.

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 (“CCMCC”).

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.

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.

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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).

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

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

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

transaction discussed below in Note 3.

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the reverse stock split described in Note 13.

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

2 – Summary of Significant Accounting Principals

2 – Summary of Significant Accounting Policies

of Consolidation

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.

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”)

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Reclassifications

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.

amounts in the consolidated statement of cash flows for the year ended June 30, 2025 have been reclassified to conform to the current

year presentation.

The Company revised the presentation of its receivables-related operating activities to present the provision for

credit losses as a separate non-cash adjustment in the reconciliation of net income to net cash provided by operating activities, and

to reflect write-offs and recoveries within the change in accounts receivable, net.

A write-off reduces both gross accounts receivable

and the related allowance and has no effect on cash.

The revised presentation conforms the provision reported in the operating section

of the consolidated statements of cash flows to the gross provision for credit losses reported in the allowance for credit losses roll-forward

below, and is consistent with the indirect method requirements of ASC 230-10-45-28 and the illustrative presentation in ASC 230-10-55-13.

These reclassifications affect only the classification of amounts within operating activities and had no effect on net income, total

assets, total liabilities, total stockholders’ equity, or net cash provided by operating activities for any period presented.

Additionally, $ 152,279 of consulting fees paid to

a company controlled by a director was reclassified from general and administrative expense to general and administrative – related

party expense in the consolidated statements of operations for the year ended June 30, 2025 to conform to the current year presentation.

The reclassification had no effect on total costs and expenses, operating income, net income or earnings per share.

effect of the reclassification on the consolidated statement of cash flows for the year ended June 30, 2025 is as follows:

of Reclassification on the Consolidated Statement of Cash Flows

Year ended June 30, 2025

As Previously Reported

Effect of Reclassification

As Reclassified

Year ended June 30, 2025

As Previously Reported

Effect of Reclassification

As Reclassified

Provision for credit losses (a)

Accounts receivable, net (b)

( 2,993,192 )

( 3,870,967 )

Net cash provided by operating activities

(a) Previously captioned

“Provision for allowance for doubtful accounts for accounts receivable and contracts receivable.”

(b) Previously captioned

“Accounts receivable.”

and Cash Equivalents

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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

(“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 term.

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

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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,

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.

tradename, and accreditation are deemed to have an indefinite life, and course curriculum has definite lives of 10 years and 17.6 years.

Goodwill and indefinite life intangible assets are not amortized but are subject to, at a minimum, annual impairment tests.

expenses costs to maintain or extend intangible assets as incurred.

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

Company expenses costs to maintain or extend intangible assets as incurred.

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

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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

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

its fair value.

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

to which the Company expects to be entitled to in exchange for those goods or services.

The Company follows the five steps approach for

to which the Company expects to be entitled in exchange for those goods or services.

The Company follows the five-step approach for

revenue recognition under FASB ASC 606:

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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

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applies reserves to its receivables based upon an estimate of the risk presented by the age of the receivables and student status.

Company writes off account receivable balances of inactive students at the earlier of the time the balances were deemed uncollectible,

Company writes off accounts receivable balances of inactive students at the earlier of the time the balances were deemed uncollectible,

or one year after the revenue is generated.

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statements of operations.

The Company performs an analysis annually to determine which accounts are uncollectable and then writes them

Company pays or credits refunds within 45 days of a student’s cancellation or withdrawal for students who have completed 60 % or

less of the period of attendance based on a pro rata calculation.

Once the student has completed more than 60 % of a period of attendance,

all Title IV funds are considered earned and no refunds are due to ED.

The Company evaluates expected credit losses on a periodic basis utilizing historical collection experience,

aging of receivables, student status, current economic conditions, and other relevant collectability factors.

following table presents a roll forward of the allowance for credit losses for the fiscal years presented:

of Allowance for Credit Losses

June 30, 2026

June 30, 2025

Beginning balance

Allowance acquired on acquisition (1)

Provision for credit losses

( 3,716,346 )

( 2,499,750 )

Ending balance

(1) Represents

allowance for credit losses acquired in connection with the acquisition of CCMCC on December 18, 2024.

As part of the acquisition,

the Company acquired gross accounts receivable of approximately $ 2.18 million and an associated allowance for credit losses of

approximately $ 44 thousand, resulting in net acquired accounts receivable of approximately $ 2.13 million.

Company pays or credits refunds within 45 days of a student’s cancellation or withdrawal for students who have completed 60 %

or less of the period of attendance based on a pro rata calculation.

Once the student has completed more than 60 % of a period of

attendance, all Title IV funds are considered earned and no refunds are due to ED.

Company expenses advertising cost as incurred.

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.

Company estimates the fair value of stock-based compensation awards on the date of grant using an option-pricing model.

the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s

consolidated statements of operations.

The Company estimates the fair value of stock-based compensation awards using the Black-Scholes

This model requires the Company to estimate the expected volatility and value of its common stock and the expected term of the

stock options, all of which are highly complex and subjective variables.

The expected life was calculated based on the simplified method

as described by the SEC Staff Accounting Bulletin No.

Advertising costs amounted to $ 5,930,560 and $ 4,749,214 for the years ended

June 30, 2026, and 2025, respectively.

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

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.

The Company estimates the fair value of stock-based compensation awards on the date of grant using an option-pricing model.

The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods

in the Company’s consolidated statements of operations.

The Company estimates the fair value of stock-based compensation awards

using the Black-Scholes model.

This model requires the Company to estimate the expected volatility and value of its common stock and

the expected term of the stock options, all of which are highly complex and subjective variables.

The expected life was calculated based

on the simplified method as described by the SEC Staff Accounting Bulletin No.

110, Share-Based Payment.

The Company’s estimate of expected volatility was

based on the volatility of peers.

The Company has selected a risk-free rate based on the implied yield available on U.S.

Treasury securities

with a maturity equivalent to the expected term of the options.

The Company accounts for forfeitures upon occurrence.

The Company’s estimate

of expected volatility was based on the volatility of peers.

The Company has selected a risk-free rate based on the implied yield available

Treasury securities with a maturity equivalent to the expected term of the options.

The Company accounts for forfeitures upon

Value of Financial Instruments

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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.

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:

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of Credit Risk

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.

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

substantial portion of the Company’s revenues and student receivables are derived from students who participate in federal

financial aid programs administered by the U.S.

Department of Education (“ED”) under Title IV of the Higher Education

Although financial aid funds are disbursed through these programs and represent a significant source of funding for student

tuition, the related accounts receivable represent obligations of individual students and not direct receivables from ED or other

governmental agencies.

The Title IV programs are subject to significant federal regulatory requirements and political and budgetary

considerations, and there can be no assurance that funding levels or program availability will remain at current levels.

material noncompliance with applicable regulatory requirements could have a material adverse effect on the Company’s

operations and financial condition.

No individual student or other customer accounted for more than 10% of consolidated revenues or

gross accounts receivable as of June 30, 2026 or June 30, 2025.

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

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

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.

As of June 30, 2026 and June 30, 2025, the Company’s bank deposits in excess of FDIC insured limits were approximately

$ 10.8 million and $ 8.6 million, respectively.

of June 30, 2026 and June 30, 2025, $ 10.71

million and $ 10.38

million, respectively, was held in U.S.

Treasury bills and U.S.

Treasury money market funds in a brokerage account, which are not

insured by the FDIC.

The weighted average yield on these holdings was approximately 3.5 %

and 4.0 % per annum as of June 30, 2026 and June 30, 2025, respectively.

and Contingencies

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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

position that is more likely than not would be sustained upon examination by the Internal Revenue Service.

Management has analyzed the

Company’s tax positions and believes there are no uncertain positions taken or expected to be taken that would require recognition

of a liability or disclosure in the financial statement.

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

uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service.

Management has

analyzed the Company’s tax positions and believes there are no uncertain positions taken or expected to be taken that would

require recognition of a liability or disclosure in the financial statements.

Company accounts for income taxes payable or refundable for the current year and deferred tax assets and liabilities for future tax consequences

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and administrative expenses on the income statement.

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

The estimated federal and state effective tax rates are 21 %

respectively.

Growth Company

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.

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

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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

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

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 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

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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

7 unchanged sentences

Accounting Pronouncements

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 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

1 unchanged sentence

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.”.

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

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 segment.

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.”

March 2024, the FASB issued ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements,

which removes references to various FASB Concepts Statements from the Codification.

The Company adopted this guidance on July 1, 2025.

The adoption did not have a material effect on the Company’s consolidated financial statements.

Company is an emerging growth company and has elected to use the extended transition period provided in Section 7(a)(2)(B) of the Securities

Act for complying with new or revised accounting standards.

As a result, the Company adopts new or revised accounting standards on the

dates applicable to entities that are not public business entities.

The following accounting pronouncements have been issued but not

yet adopted by the Company:

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires disaggregated

information about the effective tax rate reconciliation by specified category and disaggregation of income taxes paid by federal,

state and foreign jurisdiction.

The standard is effective for the Company for the fiscal year ending June 30, 2027, and is to be applied

prospectively, with retrospective application permitted.

The Company is evaluating the effect of adoption, which is expected to result

in expanded income tax disclosures with no change to the amounts recognized in the consolidated financial statements.

July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts

Receivable and Contract Assets, which provides a practical expedient for estimating expected credit losses on current accounts receivable

and current contract assets arising from transactions accounted for under Topic 606.

The standard is effective for the Company

for the fiscal year ending June 30, 2027, with early adoption permitted.

The Company is evaluating whether it will elect the practical

expedient and the effect adoption would have on its consolidated financial statements.

November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

(Subtopic 220-40):

Disaggregation of Income Statement Expenses, as amended in January 2025 by ASU 2025-01, which requires disaggregated

disclosure of specified categories of expense included within relevant income statement expense captions.

The standard is effective for

the Company for the fiscal year ending June 30, 2028, and for interim periods thereafter.

The Company is evaluating the effect of adoption,

which is expected to result in expanded expense disclosures with no change to the amounts recognized in the consolidated financial statements.

December 2025, the FASB issued ASU 2025-12, Codification Improvements, which includes amendments to Topic 260, Earnings Per Share.

standard is effective for the Company for the fiscal year ending June 30, 2028, and interim periods within that fiscal year, and is to

be applied retrospectively to each prior period presented.

The Company is evaluating the effect of adoption.

2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements, which revises the disclosure requirements

for interim reporting periods.

The standard is effective for the Company for interim reporting periods within the fiscal year ending

June 30, 2029.

The Company is evaluating the effect of adoption on its interim financial statements.

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 .

The primary reasons for the acquisition were to expand the Company’s program offerings and campus locations.

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 the Company’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.

1 unchanged sentence

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

of the amount paid over the estimated fair values of the identifiable net assets was $ 7,733,785 which has been allocated between goodwill

and other intangible assets and is included on the accompanying consolidated balance sheet.

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

11 unchanged sentences

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.

connection with the CCMCC acquisition, the Company acquired the following accounts receivable balances:

of Acquired Accounts Receivable Balances

Gross accounts receivable

Allowance for credit losses

Net accounts receivable acquired

acquired allowance for credit losses of approximately $ 44 thousand is included as the acquisition-date opening balance in the allowance

for credit losses roll forward presented in Note 2.

Company completed the allocation of the purchase price within the measurement period, which ended December 18, 2025.

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

17 unchanged sentences

Intangibles net

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.

of June 30, 2026 and June 30, 2025, 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 $ 19,611 and

in amortization expense for years ended June 30, 2026 and 2025, respectively.

Estimated amortization expense for course curriculum

is $ 19,611 for each of the fiscal years ending June 30, 2027, 2028, 2029, 2030 and 2031.

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

1 unchanged sentence

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

CCMCC’s accreditation was most recently

renewed in April 2026 and its next renewal is in April 2031.

HDMC’s ACCET accreditation was most recently renewed in April

2024 and its next renewal is in April 2029.

Integrity’s ABHES accreditation was renewed in February 2026 and its next renewal

is scheduled for February 2032.

ABHES accreditation has an indefinite life, the accreditation requires periodic renewal.

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

on a straight-line basis.

5 - Property and Equipment

7 unchanged sentences

Furniture, fixtures and other equipment

and equipment gross

Property and equipment, gross

Less accumulated depreciation and amortization

2 unchanged sentences

Property and equipment, net

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

respectively.

and amortization expense associated with property and equipment totaled $ 590,474 and $ 400,455 for years ended June 30, 2026

and 2025, respectively.

6 – Accounts Receivable

following table presents the components of accounts receivable as reported in the Company’s consolidated balance sheets:

of Accounts Receivable Consolidated Balance Sheets

June 30, 2026

June 30, 2025

Accounts receivable, net (current)

Accounts receivable, long-term

Total net accounts receivable

are presented net of the allowance for credit losses of $ 1,994,492 (fiscal 2026) and $ 1,641,052 (fiscal 2025).

Activity in the allowance

for credit losses is presented in the roll-forward in Note 2.

TuitionFlex Program is designed to create a flexible tuition credit program for students and families to help bridge the financial gap,

2 unchanged sentences

regardless of financial need, for up to 6 years.

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.

The long-term portion of student receivables utilizing the TuitionFlex program was $ 2,153,680 and

$ 1,966,137 as of June 30, 2026 and June 30, 2025, respectively.

7 – Prepaid Expenses

11 unchanged sentences

Other advance

Tenant improvement allowance receivable

Receivable from CCMCC Seller

Employee retention credit

Amounts due from the State of California

Total other receivables

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 .

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, 2026 and June 30, 2025 was $ 94,454 .

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

Act in the approximate amount of $ 2.9 million.

The remaining balance of the ERTC receivable as of June 30, 2025 and June 30, 2024 was

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

Education Inc.

Notes to Consolidated Financial Statements

For Fiscal Years ended June 30, 2025 and 2024

The remaining balance of the ERTC receivable as of June 30, 2026 and June 30, 2025

was $ 49,848 and $ 37,720 , respectively.

9 – Accounts Payable and Accrued Liabilities

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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.

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 of (i) the 9-month anniversary of the first advance under each promissory note;

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

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.

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

4 unchanged sentences

Total other debt

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

May 31, 2026, the Company entered into an exchange agreement with Strategic Education Loan Fund, LLC (“SELF”), the holder

of an unsecured promissory note issued on November 12, 2019 in the principal amount of $ 500,000 .

Under the exchange agreement, SELF exchanged

the note for 75,000 shares of the Company’s common stock and irrevocably waived all interest and other amounts accrued under the

note through the date of the agreement.

The exchange closed on May 31, 2026, at which time the note was cancelled and all of SELF’s rights

under the note were extinguished.

The shares were issued in reliance on the exemptions from registration provided by Section 3(a)(9)

and/or Section 4(a)(2) of the Securities Act of 1933, as amended, and are subject to transfer restrictions that expire on May 31, 2027

and terminate earlier upon a change in control of the Company.

with the exchange, the Company engaged SELF as a consultant under a four-year consulting agreement and granted SELF an option to purchase

100,000 shares of common stock.

See Note 15 – Share-Based Compensation Plans.

Company accounted for the exchange as an extinguishment of debt.

The consideration used to extinguish the debt consists of the following:

Schedule of Consideration Used to

Extinguish the Debt

75,000 shares of common stock

Loss on extinguishment of debt

$ ( 333,250 )

Equipment Loan

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

The note accrues interest at a rate of 6.0 % per annum and requires

48 equal monthly payments.

As of June 30, 2025 and June 30, 2024, the principal balance of the promissory note was $ 13,015 and $ 20,929 ,

respectively.

The note accrues interest at a rate of 6.0 % per annum and

requires 48 equal monthly payments.

As of June 30, 2026 and June 30, 2025, the principal balance of the promissory note was

$ 4,498 and $ 13,015 , respectively.

August 2023, the Company entered into an equipment loan for $ 35,580 .

The note accrues interest at a rate of 10.14 % per annum and requires

48 equal monthly payments.

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

respectively.

The note accrues interest at a rate of 10.14 % per annum and

requires 48 equal monthly payments.

As of June 30, 2026 and June 30, 2025, the principal balance of the promissory note was

$ 10,741 and $ 19,660 , respectively.

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

The note accrues interest at a rate of 10.72 % per annum and requires

48 equal monthly payments.

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

respectively.

The note accrues interest at a rate of 10.72 % per annum and

requires 48 equal monthly payments.

As of June 30, 2026 and June 30, 2025, the principal balance of the promissory note was

$ 5,575 and $ 9,265 , respectively.

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

The note accrues interest at a rate of 13.53 % per annum and requires

36 equal monthly payments.

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

The note accrues interest at a rate of 13.53 % per annum and

requires 36 equal monthly payments.

As of June 30, 2026 and June 30, 2025, the principal balance of the promissory note was

$ 1,935 and $ 6,160 , respectively.

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

The note accrues interest at a rate of 8 % per annum and requires

36 equal monthly payments.

The note accrues interest at a rate of 8 % per annum and requires 36 equal

monthly payments.

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.

As of June 30, 2026 and June 30, 2025, the principal balance of the promissory

note was $ 9,714 and $ 21,795 , respectively.

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

The note accrues interest at a rate of 11.16 % per annum and requires

48 equal monthly payments.

The note accrues interest at a rate of 11.16 % per annum and requires 48 equal

monthly payments.

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.

As of June 30, 2026 and June 30, 2025, the principal balance of the promissory

note was $ 26,161 and $ 37,752 , 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 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.

As of June 30, 2026 and June 30, 2025, the principal balance of the promissory

note was $ 21,752 and $ 30,946 , 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 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

As of June 30, 2026 and June 30, 2025, the principal

balance of the promissory note was $ 0 and $ 515,029 , respectively.

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.

of Bank Loans

June 30, 2025

June 30, 2024

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

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

Total bank loans

As of June 30, 2026 and June 30, 2025, the principal balance of the promissory note of $ 0 and $ 202,992 , respectively, is presented

as a current liability on the accompanying consolidated balance sheet.

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

3 unchanged sentences

Long-term portion of debt

Includes $ 50,000 related party debt

$ 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 $ 135,875 and $ 78,000 , respectively, as consulting fees in the years ended June 30, 2025 and 2024, respectively.

Education Inc.

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.

shareholder of the Company was paid $ 190,000 and $ 90,000 as consulting fees in the years ended June 30, 2026 and 2025,

respectively.

director of the Company was paid $ 176,100

and $ 135,875

as consulting fees in the years ended June 30, 2026 and 2025, respectively.

company controlled by a director of the Company was paid $ 103,800

and $ 152,279

as consulting fees during the years ended June 30, 2026 and 2025, respectively.

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, 2026 and June 30, 2025, 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 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.

per annum and requires 5 equal

annual payments due on September 1 of each year.

As of June 30, 2026 and June 30, 2025, the balance of the finance liability was

and $ 215,409 ,

respectively.

present value of future minimum lease payments due at June 30, 2026 was as follows:

of Future Minimum Capital Lease Payments

of Future Minimum Finance Lease Payments

Total minimum payments

3 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 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 $ 34,005 and $ 28,337 in the years ended June 30, 2026 and 2025,

respectively.

Company leases its instructional facilities under non-cancelable operating leases expiring at various dates through 2036.

3 unchanged sentences

on the space.

Rent expense for the certain leases described above is recorded evenly over each lease term.

The difference between rent

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

Operating lease cost, including the effect of rent escalation clauses, is recognized on a straight-line basis over

the lease term.

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

As of June 30, 2026, the weighted average incremental borrowing rate used by the Company was

approximately 6.59 %,

and the weighted average remaining years left on outstanding leases was 6.03 years.

6 unchanged sentences

Long term portion of operating lease

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

rent expense and related taxes and operating expenses under operating leases for the years ended June 30, 2026 and 2025 were $ 5,396,086 and

$ 4,483,574 , respectively.

balance sheet information related to leases was as follows:

10 unchanged sentences

Cash paid for operating lease

Tenant improvement allowance.

the Company’s lease at 35450 Inland Valley Drive, Wildomar, California, the landlord has agreed to provide a tenant improvement

allowance of $ 20.00 per rentable square foot, or approximately $ 1,062,520 in the aggregate across the three phases of the lease.

The allowance

is accounted for as a lease incentive.

The $ 103,460 portion of the allowance attributable to the first phase of the lease, which commenced on

April 1, 2026, had not been received as of the commencement date and is therefore included as a reduction of the lease payments used to

measure the related lease liability and right-of-use asset.

Accordingly, the 2027 amount in the table of future minimum operating lease

payments above is presented net of the $ 103,460 allowance.

The remaining $ 959,060

relates to the second and third phases, which had not commenced as of June 30, 2026, and no amount has been recognized in respect of those

Uncommenced lease.

On July 1, 2026,

the Company commenced the second phase of its building lease at 35450 Inland Valley Drive, Wildomar, California, which provides an additional

31,057 square feet of rentable space.

The Company is obligated to make lease payments of approximately $ 894,000 during the first year

of the second phase, increasing over the 10-year lease term to approximately $1,167,000 in the final year, and totaling approximately

$ 10.3 million.

Because the second phase had not commenced as of June 30, 2026, no right-of-use asset or lease liability related to the

second phase was recognized in the accompanying consolidated financial statements.

13 – Stockholders’ Equity

1 unchanged sentence

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.

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, 2026 and June 30, 2025, the Company had 110,000,000 shares of authorized capital, par value $ 0.001 , of which

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

100,000,000 shares are designated as common stock, and 10,000,000 shares are designated as preferred

the fiscal year ended June 30, 2026, 130,809 stock options were exercised at $ 3.74 per share of common stock.

the fiscal year ended June 30, 2026, 50,000 stock options were exercised at $ 1.78 per share of common stock.

the fiscal year ended June 30, 2026, the Company issued 88,742 shares of common stock upon receipt of notice of the cashless

exercise of a total of 143,750 warrants.

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.

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

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.

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

over-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

of June 30, 2026 and June 30, 2025 the Company had 12,797,221 and 12,452,670 shares of common stock outstanding,

respectively, and no shares of preferred stock issued and outstanding.

14 - Warrants

1 unchanged sentence

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.

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.

are not remeasured in future periods as they meet the conditions for equity classification.

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

4 unchanged sentences

Expected dividend yield

the fiscal year ended June 30, 2026, the Company issued 88,742 shares of common stock upon the cashless exercise of warrants.

There were no warrants outstanding at June 30, 2026.

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.

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

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.

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.

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

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 was 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

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 was 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 was calculated using the Black-Scholes-Merton

October 16, 2025, the Company granted stock options to purchase an aggregate of 58,708 shares of its common stock at an exercise

price of $ 9.51 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 was calculated using the Black-Scholes-Merton

May 31, 2026, in connection with a four-year consulting agreement, the Company granted a non-employee consultant a nonqualified option

to purchase 100,000 shares of common stock under the Company’s Amended and Restated 2021 Equity Incentive Plan at an exercise price

of $ 11.11 per share.

The option expires on the tenth anniversary of the date of grant and vests in 48 equal monthly installments, subject

to acceleration in full upon a change in control of the Company, a termination of the consultant by the Company without cause, or the

Company’s current Chief Executive Officer ceasing to serve in that capacity.

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

1 unchanged sentence

Units Granted

Summary of Stock Options

of Stock Options

Remaining Contractual

Outstanding as of June 30, 2024

7 unchanged sentences

of Vested and Unvested Stock Options Units Granted

Date Fair Value

Contractual Life (Years)

Balance – June 30, 2024, unvested

1 unchanged sentence

Options vested

Options expired

Options exercised

Forfeited or cancelled

Balance – June 30, 2025, unvested

1 unchanged sentence

Options vested

Options expired

Forfeited or cancelled

Balance – June 30, 2026, 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.

The 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 %.

1 unchanged sentence

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

The fair value of the options was $ 4.05 per option.

Company valued options issued in October 2025 using the Black Scholes model utilizing volatility 58 %, and a risk-free rate of 3.65 %.

The fair value of the options was $ 5.46 per option.

Company valued options issued in May 2026 using the Black Scholes model utilizing volatility 60 %, and a risk-free rate of 4.20 %.

The fair value of the options was $ 6.61 per option.

Company recorded share-based compensation expense of $ 1,170,977 and $ 552,800 during the years ended June 30, 2026 and 2025,

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

Unamortized compensation expense associated

with unvested options was $ 2,421,731 and $ 832,205 as of June 30, 2026 and June 30, 2025, respectively.

The weighted average

period over which these costs are expected to be recognized is approximately 2.25 years.

16 - Income Tax

5 unchanged sentences

upon achievement of projected future taxable income.

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.

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, 2026 and 2025.

December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law.

2 unchanged sentences

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.

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 through income tax expense.

components of income tax expense (benefit) are as follows:

5 unchanged sentences

Total income tax expense

tax expense differed from the amount computed using the U.S.

federal income tax rate of 21% for June 30, 2025 and 2024 as follows:

Income tax expense differed from the amount computed using the U.S.

income tax rate of 21 % for June 30, 2026 and 2025 as follows:

Schedule of Federal Income Tax Expense

30 unchanged sentences

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

13 unchanged sentences

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

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

ED deems an institution financially responsible

when the composite score is at least 1.5.

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

administered by ED pursuant to the Higher Education Act.

To continue to participate in the student financial aid programs, the Company

must comply with the regulations promulgated under the Higher Education Act.

The regulations restrict the proportion of cash receipts

for tuition and fees from eligible programs to not more than 90% from Title IV programs 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.

As described above, ED requires institutions

to meet standards of financial responsibility.

ED deems an institution financially responsible when the composite score is at least 1.5.

We have calculated the Company’s composite score to be 3.0 for the fiscal year ended June 30, 2025.

The composite score

calculation for fiscal year ended June 30, 2026, has not yet been completed as of the date of these financial statements and is due on

December 31, 2026.

The Company derives a substantial portion

of its revenues from student financial aid received by its students under the Title IV programs administered by ED pursuant to the Higher

Education Act.

To continue to participate in the student financial aid programs, the Company must comply with the regulations promulgated

under the Higher Education Act.

The regulations restrict the proportion of cash receipts for tuition and fees from eligible programs

to not more than 90% from Title IV programs and other federal educational assistance funds (the “90/10 revenue test”).

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

Using ED’s cash-basis, regulatory formula under the 90/10 revenue test, as in effect for its 2025 fiscal year, HDMC, CCC,

ICH, and CCMCC derived 86.82%, 80.35%, 84.71%, and 59.80% for their 90/10 revenue from Title IV program and other federal educational

assistance funds, respectively, for the fiscal year ended June 30, 2025.

The 90/10 calculations for fiscal year ended June 30, 2026,

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

for each of our institutions are due to ED on December 31, 2026 and each is expected to be below 90%.

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

The Company is unaware of any possible claims that could have a material adverse effect on the Company’s business, results of

operations or financial condition.

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.

Company has evaluated subsequent events and transactions that occurred up to the date the consolidated financial statements

Based upon this review, other than as described below, the Company did not identify any subsequent events that would

have required adjustment or disclosure in the consolidated financial statements.

On September 14, 2026, CCC entered into a lease agreement

for approximately 28,218 rentable square feet in Houston, Texas for its planned new campus.

The lease has an initial term of 130 months

following the commencement date defined in the lease, which is the earlier of the substantial completion of tenant improvements to the

premises or the date CCC opens for business in the entire premises.

Base rent and CCC’s pro rata share of the building’s operating

expenses are abated for the first ten months of the lease term, and total base rent over the initial lease term is approximately $ 6.9

CCC will also pay rent on any portion of the premises it occupies before the commencement date.

The landlord will provide a tenant

improvement allowance, and the lease includes an option to renew for one additional seven-year term at fair market rent.

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