Lease Commitments

6 Months Ended

Dec. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Lease Commitments

Note 12 – Lease Commitments

Finance Leases

In July 2023, the Company entered into an equipment lease for $340,048. 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 December 31, 2024 and June 30, 2024, the balance of the finance liability was $203,862 and $272,669, respectively.

The present value of future minimum lease payments due at December 31, 2024, was as follows:

2025	-
2026		81,459
2027		81,459
Thereafter		81,458
Total minimum payments		244,376
Less: amount representing interest		(40,514	)
Present value of minimum payments	$	203,862
Less: current portion		(60,559	)
Long term portion	$	143,303

The Company has determined to amortize the lease over the useful life of the equipment or ten (10) years and put the equipment into service in September 2024. The Company recorded amortization of $11,335 in the three and six months ended December 31, 2024.

Operating Leases

The Company leases its instructional facilities under non-cancelable operating leases expiring at various dates through 2034. In most cases, the facility leases require the Company to pay various operating expenses of the facilities in addition to base monthly lease payments. In certain cases, the Company has options available under its leases to renew, and certain leases contain ordinary rental escalations 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 clauses.

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. As of December 31, 2024, the weighted average incremental borrowing rate used by the Company was approximately 6.7%, and the weighted average remaining years left on outstanding leases was 7.83 years.

The present value of future minimum lease payments due at December 31, 2024 was as follows:

2025	$	1,745,795
2026		3,026,432
2027		2,126,398
2028		1,954,026
2029		1,876,893
After 2029		8,956,056
Total future minimum operating lease payments		19,685,600
Less: imputed interest		(4,717,489	)
Total		14,968,111
Current portion of operating lease		2,512,695
Long term portion of operating lease	$	12,455,416

Total rent expense and related taxes and operating expenses under operating leases for the three and six months ended December 31, 2024 were $994,159 and $1,993,274, respectively. Total rent expense and related taxes and operating expenses under operating leases for the three and six months ended December 31, 2023 were 840,026 and $1,707,650, respectively.

Legacy Education Inc.

Notes to Consolidated Financial Statements

For The Three and Six Months ended December 31, 2024 and 2023

(Unaudited)

Supplemental balance sheet information related to leases was as follows:

	December 31, 2024		June 30, 2024
Operating lease right-of-use assets	$	14,721,700	$	3,575,369
Operating lease liability - current	$	2,512,695	$	1,868,560
Operating lease liability – non-current		12,455,416		1,947,620
Total operating lease liability	$	14,968,111	$	3,816,180

Other supplemental information:

	For the six months ended December 31,
	2024		2023
Cash paid for operating lease	$	1,253,157	$	1,251,902