NYSE: LGCY

Central
Coast College (“CCC”)

CCC was established in the State of California in
1983. In 1991, CCC moved to its current location in Salinas, California to accommodate growing enrollment numbers and the addition of
new training programs. In September 2026, CCC entered into a lease for a new, additional location in Houston, Texas, which CCC currently projects to open in November 2026, subject to receipt of the required regulatory and accreditation approvals.

CCC offers the following certificate or degree programs:
Computer Specialist: Accounting, Medical Administrative Assistant, Medical Assisting, Nursing Assistant, UT, UT Associate of Applied Science,
Veterinary Assistant, Veterinary Technology Associate of Applied Science, VN, Surgical Technology (Associate of Applied Science), Dental
Assisting, Sterile Processing Technician, Pharmacy Technician, MRI Associate of Applied Science, and Cardiac Sonography Associate of Applied
Science. CCC also offers an avocational Phlebotomy Technician program. As of June 30, 2026, CCC had 576 students enrolled in its programs.

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Integrity
College of Health (“Integrity”)

Integrity
was established in the State of California in 2007. Integrity’s campus is located in Pasadena, California. Integrity offers
VN, Registered Nurse to Bachelor of Science in Nursing (“RN to BSN”), Medical Assisting, Medical Billing and Coding,
Veterinary Assistant, Sterile Processing Technician, and Diagnostic Medical Sonography programs. Integrity earned initial
accreditation from the National League for Nursing Commission for Nursing Education Accreditation (NLN CNEA) for its Bachelor of
Science in Nursing RN to BSN Track in June 2025. Integrity also plans to offer an Emergency Medical Technician (“EMT”)
program (for which Integrity is not planning to seek ED approval because it does not intend to make Title IV funds available for
students who enroll in the program). Integrity has filed its application for the program with the California Bureau for Private
Postsecondary Education, is awaiting final approval and expects to begin offering the program in late 2026. For purposes of our
financial statements, Legacy Education, L.L.C. is deemed to have acquired Integrity in December 2019. As of June 30, 2026, Integrity
had 196 students enrolled in its programs.

Contra
Costa Medical Career College (“CCMCC”)

CCMCC was established in the State of California
in 2007. CCMCC’s campus is located in Antioch, California. CCMCC offers the following certificate and degree programs: VN,
Surgical Technology (Associate of Applied Science), Sterile Processing Technician, Pharmacy Technician, Diagnostic Medical
Sonography, Medical Assisting with Phlebotomy, Dental Assisting, Clinical Medical Assisting, EKG/ECG Technician, Medical
Administrative Assistant/Billing and Coding Specialist, and Phlebotomy (avocational) programs. CCMCC also has obtained approval from
ACCET and BPPE to offer programs in Cardiac Sonography Associate of Applied Science, Veterinary Assistant, and MRI Associate of
Applied Science, and plans to begin offering the programs in the second quarter of fiscal 2027. As of June 30, 2026, CCMCC had 508
students enrolled in its programs.

Our
History

●
In
2003, HDMC began offering classes in Lancaster, CA (main campus).

●
In
2008, HDMC began offering classes in Bakersfield, CA (branch campus).

●
In
October 2009, our current Chief Executive Officer, LeeAnn Rohmann founded our Company.

●
In
July 2010, we acquired the assets of HDMC.

●
From
2011 to 2013, HDMC received VA approval, Workforce Investment Act approval and Department of Rehabilitation approval for its programs.

●
In
April 2013, HDMC received ACCET accreditation.

●
In
December 2013, HDMC received Board of Vocational Nursing and Psychiatric Technicians (“BVNPT”) accreditation of new
licensed vocational nurses curriculum on a provisional basis, which provision was removed in 2017.

●
In
March 2014, HDMC became eligible to participate in the Title IV Programs and, in April 2014, received its first disbursements under
the Title IV Programs.

●
From
2015 to 2017, HDMC added pharmacy technician and dental assisting programs, went through re-accreditation with ACCET, received approval
to participate in Cal Grant programs, and was removed from provisional status by BVNPT.

●
In
January 2018, the UT Associate of Applied Science (“AAS”) degree program was approved by BPPE and ACCET to offer through
interactive distance learning.

●
In
July 2018, HDMC received branch approval for the Temecula, CA campus.

●
In
July 2018, HDMC introduced medical billing and coding programs and online UT AAS program.

●
In
December 2018, we entered into the management services agreement with Integrity.

●
In
December 2018, ED conducted and completed a program review at HDMC to confirm compliance with Title IV regulations, noting only minor
findings.

●
In
January 2019, we acquired CCC.

●
In
January 2019, HDMC received approval for licensed vocational nurse students (20 students) for Bakersfield, CA.

●
In
February 2019, the UT AAS degree program was approved by ED.

●
In
February 2019, HDMC opened its campus in Temecula, CA.

●
In
December 2019, we acquired a 24.5% ownership interest in Integrity.

●
In
September 2020, we acquired the remaining 75.5% interest in Integrity.

●
In
2021 and 2022, we received hybrid approval for all programs, launched new accredited programs of Cardiac Sonography AAS, Vocational
Nursing AAS, and Ultrasound AAS in CCC, and obtained the Vocational Nursing program in HDMC Temecula.

●
In
2023, we launched new accredited programs of Certified Nurse Assistant program at HDMC, Magnetic Resonance Imaging AAS (HDMC), Veterinary
Assisting (ICH), Vocational Nursing (CCC), RN approval (HDMC).

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●
In
January 2024, we started our first Associate Degree of Nursing program (HDMC).

●
In
April 2024, HDMC was re-accredited by ACCET through April 2029 for all programs.

●
In
December 2024, we acquired the assets of Contra Costa Medical Career College

●
In
April 2025, CCC was re-accredited by ACCET through April 2030 for all programs.

●
In
June 2025, Integrity earned initial accreditation from the National League for Nursing Commission for Nursing Education Accreditation
(NLN CNEA) for its Bachelor of Science in Nursing RN- BSN Track through February 2031.

●

In
February 2026, Integrity was re-accredited by ABHES through February 2032 for all programs.

●

In
April 2026, CCMCC was re-accredited by ACCET through April 2031.

Industry
Background

In
the United States, the post-secondary education market is large, fragmented, and competitive. According to the National Center for
Education Statistics, as of the 2022-23 school year, degree granting career colleges served approximately 1.7 million
undergraduate students, which was approximately 8.0% of the estimated 21.5 million total undergraduates in degree programs.
According to estimates released by the National Student Clearinghouse Research Center, total enrollments in all higher education
sectors increased 2.4% and 3.2% in the spring of 2024 and 2025, respectively. Enrollment at proprietary colleges increased 5.1% and
3.7% in the spring of 2024 and 2025, respectively. The industry is heavily dependent on continued availability of federal student
financial assistance under Title IV of the Higher Education Act (“Title IV Programs”), and concerns about potential
reductions in such funding also could negatively affect demand for higher education.

Notwithstanding
periods of weaker demand in past years, we believe that demographic, economic, and social trends may support growth
over time in demand for career-focused postsecondary education in the United States. According to the U.S. Census Bureau, in 2024, approximately
64.0 million adults age 25 and older in the civilian noninstitutionalized population had a high school diploma or equivalent as their
highest level of educational attainment, and approximately 32.2 million had some college experience but no college degree.
Other trends that could positively impact demand for our programs include:

●
increasing
demand by employers for certain types of professional and skilled workers;

●
growth
in the number of high school graduates from 2.8 million in 1999-2000 to an estimated 3.8 million in 2022-2023, according to the National
Center for Education Statistics;

●
the
significant and measurable income premium and enhanced employment prospects attributable to post-secondary education;

●
a
number of initiatives underway to reduce the cost of a post-secondary education; and

●
a
continued demand from working adults for programs offered by accredited institutions.

Our
Market Opportunity

We
believe that the community college system in California, where we currently operate, is not meeting current educational and workforce
needs. Plagued by poor completion rates, uncertain career pathways and corresponding poor job placement rates, California community colleges
are not the stepping stones to success they once were. Aspiring students who want in-demand skills are often stuck between choosing an
expensive four-year school with course requirements unrelated to their interests, on one hand, and a community college that lacks a clear
mission and the ability to place them in their desired careers, on the other hand.

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Our
colleges directly address this employment need through our focused, high-quality programs. Our campuses are strategically located near
hospitals and clinics to allow easy access for our students to externships and full-time employment opportunities.

The
geographic footprint of our colleges extends from Southern to Central California, home to approximately 24 million people, including
an aging population who will depend on the skills our students are able to provide as healthcare workers.

Our
target demographic is early- to mid-20-year-olds with a desire to better their economic situation by choosing a program with strong job
opportunities, primarily within a 100-mile radius of each campus for most programs for ease of drive and availability. Students choose
a for-profit career college because they can get trained and on the job within months. Prospective students need caring career direction
and advice, more so than your traditional college students.

According
to the Bureau of Labor Statistics, employment in the healthcare and social assistance industry is projected to grow 8.4% from 2024 to
2034 resulting in over 1.9 million new jobs. This growth rate is much stronger than other industries, largely due to the aging population
and the growing prevalence of chronic conditions.

Our
Growth Strategies

Our
growth strategy goals consist of the following:

●
Plan
for moderate growth in existing programs.

●
Approval
of registered nursing programs in Bakersfield and Salinas, California.

●
New
programs in dental hygiene

●
Continued
launch of new program offerings, including online offerings.

●
Launch
new branch campuses in California and beyond, including CCC’s planned campus in Houston, Texas.

●
Acquire
new institutions (new locations, new programs) outside of California, including in Texas, Nevada, Colorado and New Mexico and
programs in trades to increase national footprint.

●
Meet
benchmark standards for completion and placement.

Our
business strategy is based on helping our graduates succeed, which we believe will drive our financial results. To that end, we are pursuing
the following operating strategies:

●
Focusing
on student and graduate success, including improving retention rates while maintaining high standards of academic quality and rigor;

●
Maintaining
and improving upon our ability to offer affordable degrees, where graduates receive a high return on their investment;

●
Expanding
and optimizing our relationship-based marketing efforts and increasingly personalizing the prospective student experience; and

●
Further
strengthening and expanding our product offering and the alignment of our offering with employer needs.

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We
are focused on the following operational priorities to deliver these strategies:

Curriculum
and Assessment. Across our portfolio, we continue to refine and implement best practices for teaching and learning models and
focus on learner success to improve completion rates and align the curriculum to employers’ needs to drive career success. Our
goal is to further strengthen our position as a recognized leader in high quality learning.

We
are committed to delivering a superior academic, professionally aligned, real-world education to our students. We seek to develop a deep
understanding of the professions we serve and the competencies required of skilled professionals in these fields. This commitment guides
the development of our curricula, the recruitment of our faculty and staff, and the design of our support services.

Graduate
Success. We look for opportunities to improve our students’ educational experience and increase the likelihood of students
successfully completing their programs. Our programs surround students with a supportive, flexible, and engaging environment to help
them achieve academic success. To foster that environment, we maintain a comprehensive focus on improving early cohort persistence, a
personalized on-boarding experience for new learners, simplified administrative interactions, and continuous improvements in the quality
and frequency of interaction between our learners and our faculty.

Relationship-Based
Marketing. We continue to focus on building our brands and establishing our strong differentiation as a provider of high quality
and professionally aligned educational offerings as well as an innovative and leading provider of job-ready skills for the 21st
century workforce. We continue to expand on this differentiation through a variety of initiatives, including creating brand recognition,
optimizing marketing efforts, interacting with prospective students earlier in the decision process and expanding strategic employer
relationships. Our marketing strategy is designed to attain greater strategic control over our new enrollment growth and strengthen engagement
with prospective as well as current students and graduates, who can act as advocates for our institutions.

Innovation
and Diversification. We seek to expand the addressable market by investing in innovation, student success, academic infrastructure,
and new business models. We also seek to drive growth through a multifaceted strategy of enhancing existing program offerings, developing
new and innovative programs, branching and acquisitions.

Competition

The
for-profit, post-secondary education industry is highly competitive and highly fragmented with no single participant controlling a significant
market share. We compete for students with traditional public and private two-year and four-year degree-granting accredited colleges
and universities, other proprietary degree-granting accredited schools, and alternatives to higher education. In addition, we face competition
from various non-traditional, credit-bearing and noncredit-bearing education programs, provided by both proprietary and not-for-profit
providers, including massive open online courses offered worldwide without charge by traditional educational institutions and other direct-to-consumer
education services. As the proportion of traditional colleges providing alternative learning modalities increases, we will face increasing
competition for students from traditional colleges, including colleges with well-established reputations for excellence. As online learning
matures as a modality for education delivery across higher education, we believe that the intensity of the competition we face will continue
to increase.

We
believe the key factors affecting our competitive position include the quality of the programs offered, the quality of other services
provided to students, our reputation among students and in the general marketplace, the cost and perceived value of our offerings, the
employment rate and terms of employment for our graduates, the ease of access to our offerings, the quality and reputation of our faculty
and other employees, the quality of our campus facilities and online platform, the time commitment required to complete our program and
obtain a degree, the quality and size of our alumni base, and our relationship with other learning institutions.

Some
of our local competitors include San Joaquin Valley College, Career Care Institute, UEI College, Bakersfield College, American Career College, and the Pima Medical
Institute. Such competitors may have greater financial resources and greater brand recognition than us. In addition, public institutions
receive government subsidies and other financial sources not available to for-profit schools.

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Marketing
and Recruiting

We
use a variety of marketing and recruiting methods to attract students and increase enrollment. Our marketing and recruiting efforts are
targeted at prospective students who are high school graduates entering the workforce, or who are currently underemployed or unemployed
and require additional training to enter or re-enter the workforce.

Marketing
and Advertising. We advertise through a variety of marketing channels to inform prospective students interested in entering or
advancing their healthcare careers about the college and the programs we offer. We utilize a fully integrated marketing approach in our
lead generation and admissions process that includes the use of traditional media such as radio, billboards, direct mail, a variety of
print media and event marketing campaigns. Our digital marketing efforts, which include paid search, search engine optimization, online
video and display advertising and social media, have grown significantly in recent years and currently drive the majority of our new
student leads and enrollments. Our websites’ integrated marketing campaigns direct prospective students to call us or visit the
HDMC, CCC, Integrity and CCMCC websites where they will find details regarding our programs and campuses and can request additional information
regarding the programs that interest them.

Referrals.
Referrals from current students, high school counselors and satisfied graduates and their employers have historically represented
approximately 20% of our new enrollments. Our school administrators actively work with our current students to encourage them to recommend
our programs to prospective students. We continue to build strong relationships with high school guidance counselors and instructors
by offering annual seminars at our training facilities to further familiarize these individuals with the strengths of our programs.

Recruiting.
Our recruiting efforts are conducted by a group of approximately 20 campus-based and field representatives who meet directly
with prospective students during presentations conducted at high schools, or during a visit to one of our campuses.

Student
Support

Admissions.
Students enrolling in our programs must have a high school diploma or a General Educational Development Certificate and demonstrate
competence in writing and logical reasoning. For programs leading to a degree students must also complete an application and pass one
or more entrance assessments, including the Wonderlic Scholastic Level Exam (“SLE”) or TEAS for the Vocational Nursing programs.
While each of our programs has different admissions criteria, we screen all applications and counsel the students on the most appropriate
program to increase the likelihood that our students complete the requisite coursework and obtain and sustain employment following graduation.
As of June 30, 2026, our diverse population was comprised of 60% Hispanic, 11% Black/African American, 14% White, 6% Asian, 5% Two or
More Races, 1% Native Hawaiian or Other Pacific Islander, and 1% American Indian or Alaska Native, with 2% Race and Ethnicity unspecified.
The age distribution shows 48% of our students are 25 and older, while 52% are 24 or younger, with a significant majority of 86% being
women and 13% being men and 1% Gender unspecified.

Enrollment.
We enroll students continuously throughout the year, with our largest classes enrolling in late summer or early fall following
high school graduation. We had 3,377 students enrolled as of June 30, 2026, an increase of 8.9% compared to 3,101 students as of June
30, 2025. Our expanding student body reflects the trust and confidence in our educational offerings and our ability to prepare students
for successful careers.

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The
chart below outlines our quarterly consolidated new student starts and end of quarter student enrollment across our colleges.

September 30,

2024

December 31,

2024

March 31,

2025

June 30,

2025

September 30,

2025

December 31,

2025

March 31,

2026

June 30,

2026

Consolidated

Starts
849
397
1,227
721
1,117
593
1,078
695

Ending Enrollment
2,539
2,768
3,245
3,101
3,495
3,234
3,550
3,377

Year over Year (%)

Starts
12 %
-4 %
71 %
16 %
32 %
49 %
-12 %
-4 %

Ending Enrollment
25 %
45 %
50 %
42 %
38 %
17 %
9 %
9 %

Retention.
To maximize student retention, the staff at each school is trained to recognize the early warning signs of a potential drop and
to assist and advise students on academic, financial, employment and personal matters. We monitor weekly our retention rates by instructor,
course, program and school. When we become aware that a particular instructor or program is experiencing a higher than normal dropout
rate, we quickly seek to determine the cause of the problem and attempt to correct it. When we identify that a student is experiencing
difficulty academically, we offer tutoring, remediation and assistance and guidance from the program director. With an average monthly
program retention rate of 98.1%, our focus on student success and support throughout their educational journey is evident.

Outcome.
Our core mission is to prepare students for competitive careers in their chosen fields. As of June 30, 2026, we boast an average
placement rate of 72.7%, with individual rates of 73.2% for High Desert Medical College, 72.0% for Central Coast College, 73.4% for Contra
Costa Medical Career College and 67.5% for Integrity College of Health. Additionally, our students have achieved an 82.4% NCLEX Pass
Rate and a 60.0% Veterinary Technician National Exam Pass Rate, demonstrating the effectiveness of our programs.

Faculty
and Employees

Across
the organization, we seek to hire faculty who have teaching and/or practitioner experience in their particular discipline and who possess
significant and appropriate academic credentials. We hire our faculty in accordance with established criteria set by relevant state law
and accreditation standards, including relevant work experience and educational background. We require meaningful industry experience
of our teaching staff in order to maintain the quality of instruction in all of our programs and to address current and industry-specific
issues in our course content. In addition, we provide intensive instructional training and continuing education, including quarterly
instructional development seminars, annual reviews, technical upgrade training, faculty development plans and weekly staff meetings.

We
also employ non-faculty staff in student services, academic advising and academic support, enrollment services, administration, financial
aid, information technology, human resources, finance and other administrative functions. The staff of each campus typically includes
a campus director, a director of education, a registrar, a career services coordinator, a financial-aid officer, a business officer and
a career advisor and instructors, all of whom are industry professionals with experience in our areas of study.

As
of June 30, 2026, we had approximately 120 full-time faculty, including 16 program directors, as well as approximately 180 part-time
faculty.

As
of June 30, 2026, we and our institution also employed approximately 185 combined non-faculty staff in the areas of university services,
academic advising and academic support, enrollment services, university administration, financial aid, information technology, human
resources, corporate accounting, finance and other administrative functions. None of our employees is a party to any collective bargaining
or similar agreement with us.

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Education
Regulations

As
a provider of postsecondary education, we are subject to extensive regulation by federal, state and accrediting agencies. The applicable
educational regulatory requirements cover virtually all phases of the operations of our institutions, including, but not limited to,
educational program offerings, facilities, instructional and administrative staff, administrative procedures, marketing and recruiting,
financial operations, data security and privacy, adequacy and substantiation of graduation and job placement rates and other student
outcomes, distribution of information to current and prospective students, professional licensure requirements, payment of refunds to
students who withdraw, the receipt of federal and state financial aid by our students (including institutional, programmatic, and student
eligibility requirements), private and institutional loan programs, distance education, third party servicers, written arrangements with
other institutions or organizations to provide some or all of an educational program, student complaints, student services, student admissions,
transfer of academic credits, acquisitions or openings of new institutions, additions of new campuses and educational programs, closure
or relocation of existing locations and changes in corporate structure and ownership.

Each
of our institutions (HDMC, CCC, Integrity and CCMCC) participates in the Title IV Programs, as well as other federal and state financial
aid programs and is subject to extensive regulation by ED, other federal and state educational agencies and accreditors. CCC, HDMC,
and CCMCC are approved to offer, and must comply with applicable requirements related to, veterans education assistance administered
by the Department of Veterans Affairs (“VA”). CCC and HDMC are also approved to offer and must comply with applicable requirements
related to Cal Grants administered by the California Student Aid Commission, and funds administered under the Workforce Innovation and
Opportunity Act. We derive a substantial portion of our revenue and cash flows from the Title IV Programs and a significant portion of
our students rely on financial aid received under the Title IV Programs in order to attend our institutions. To participate in the Title
IV Programs, an institution must receive and maintain authorization by the appropriate state education agencies, be accredited by an
accrediting body recognized by ED, hold programmatic accreditation if required by a state or federal agency (including as a condition
of employment in the occupation for which the institutional program prepares the students), and be certified by ED as an eligible institution.

The
laws, regulations, standards and policies of our regulators change periodically and are subject to new and changing interpretation by
our regulators. Changes in, or new interpretations of, applicable laws, regulations, standards, or policies, or our failure to comply
with those laws, regulations, standards, or policies could have a material adverse effect on our receipt of funds under the Title IV
Programs and other federal and state financial aid programs, the accreditation of our institutions and programs, the authorization of
our institutions to operate in various states, our permissible activities, or our costs of doing business. We cannot predict with certainty
how all of the requirements applied by our regulators will be interpreted or whether our institutions will be able to comply with these
requirements in the future. Given the complex nature of these requirements and the fact that they are subject to interpretation, it is
possible that we may inadvertently violate these laws, regulations, standards, or policies. If we are found to have violated any applicable
regulations, laws, standards or policies, we may be subject to liabilities, sanctions, and other consequences. See “Risk Factor
- If our institutions fail to comply with the extensive educational regulatory requirements applicable to our business, we could incur
financial penalties, restrictions on our operations, loss of federal and state financial aid funding for our students, loss of accreditation,
or loss of our authorization to operate our institutions or our educational programs.”

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Under
the provisions of the Higher Education Act (“HEA”), an institution must apply to ED for continued certification to participate
in the Title IV Programs at least every six years or when it undergoes a change in ownership resulting in a change of control. ED defines
an institution to consist of both a main campus and its additional locations, if any. Under this definition, for ED purposes, we operate
the following four institutions, collectively consisting of four main campuses and two additional locations: HDMC with locations in Lancaster,
Bakersfield, and Temecula, CCC with a location in Salinas and a planned new location in Houston, Texas, Integrity with a location in
Pasadena, and CCMCC with a location in Antioch. Generally, the recertification process includes a review by ED of an institution’s
educational programs and locations, administrative capability, financial responsibility and other oversight categories. The current expiration
date of the program participation agreements for HDMC and CCC is September 30, 2026, and these institutions have timely applied for recertification
by ED and remain eligible to participate in the Title IV Programs during ED’s review of the recertification applications. The current expiration date of the program participation agreement for Integrity is March 31, 2029. CCMCC is currently participating
in the Title IV Programs under a temporary provisional program participation agreement in connection with the change in ownership and
control resulting from our acquisition of the institutions. The CCMCC temporary provisional program participation agreement had an expiration
date of January 31, 2025, but it continues on a month-to-month basis thereafter based on the institution’s submission to ED of
certain required documentation and remains in effect until the conclusion of ED’s review of CCMCC’s pending application for
approval of its change in ownership and control.

ED
typically provides provisional certification to an institution following a change in ownership resulting in a change of control and also
may provisionally certify an institution for other reasons, including, but not limited to, noncompliance with certain standards of administrative
capability and financial responsibility. Integrity is currently approved under a provisional program participation agreement following ED’s approval of its change in ownership and CCMCC is currently approved under a temporary provisional program participation agreement.
An institution that is provisionally certified receives fewer due process rights than those received by other institutions in the event
ED takes certain adverse actions against the institution, is required to obtain prior ED approvals of new campuses and educational programs
and may be subject to heightened scrutiny by ED. However, provisional certification does not otherwise limit an institution’s access
to Title IV Program funds.

On
October 31, 2023, ED published a final rule revising its Title IV Program certification regulations with an effective date of July 1,
2024. The rule codifies additional grounds for placing an institution on provisional certification, including a determination by ED that
an institution is at risk of closure and ED’s consideration of supplementary performance measures that include an institution’s
withdrawal rate, recruiting expenses, and licensure pass rate. The revised certification regulations also increase the number of requirements
contained in an institution’s Program Participation Agreement (including, for example, a requirement to comply with all state laws
related to closure), require certain ownership entities to sign the Program Participation Agreement, establish new standards for maximum
program length (including a prohibition on the length of certain educational programs from exceeding the required minimum number of hours
established by applicable state(s) for entry-level training requirements for the occupation for which the programs train students), requires
certification that an institution’s programs meet applicable educational requirements for graduates to obtain required occupational
licensure or certification in a state, and restricts the ability of institutions to withhold transcripts. The revised regulations also
impose new potential conditions on provisionally certified institutions, including, but not limited to, the submission of teach-out and/or
document retention plans, growth restrictions, acquisition restrictions, additional reporting requirements, limitations on written arrangements,
and additional conditions applicable to institutions found to have engaged in substantial misrepresentations or institutions seeking
to convert to nonprofit status following a change in ownership. The revised certification regulations are expansive, complex and could
be difficult for our institutions to comply with as interpreted by ED. If ED finds that any of our institutions do not fully satisfy
all required eligibility and certification standards, ED could limit, condition, suspend, terminate, revoke, or decline to renew our
institutions’ participation in the Title IV Programs or impose liabilities or other sanctions. Continued Title IV Program eligibility
is critical to the operation of our business. If our institutions become ineligible to participate in the Title IV Programs, or have
that participation significantly conditioned, we may be unable to conduct our business as it is currently conducted which would have
a material adverse effect on our business, financial condition, results of operations and cash flows.

State
Authorization. Our institutions are subject to the educational laws and regulations of the State of California where our
physical campuses are located, and CCC’s new additional location in Houston will be subject to the educational laws and
regulations of the State of Texas. We also may be subject to the educational laws of other states if we acquire a new institution in
the state or if one of our institutions adds a new campus in the state or otherwise conducts other operations in the state covered
by applicable state educational law including, but not limited to, student recruitment, advertising, or certain types of distance
education. State educational laws establish standards and requirements for, among other things, student instruction, faculty
qualifications, campuses and facilities, educational programs, financial stability, administrative staff, marketing and recruiting,
distribution of information to current and prospective students, payment of refunds to students who withdraw, private and
institutional loans, distance education, student services, student complaints, student admissions, transfer of academic credits,
substantive changes, acquisitions, and policies and minimum graduation and job placement outcomes for institutions and/or their
individual educational programs. Our institutions are authorized to operate by the California Bureau for Private Postsecondary
Education (“BPPE”). CCC must obtain approval from the Texas Workforce Commission (“TWC”) to operate its
planned new campus in Houston, Texas, and has not yet submitted its application to the TWC; however, no assurance can be provided
that we will receive the TWC approval or the Texas Higher Education Coordinating Board approvals described below in a timely manner,
or at all. We also may be required to obtain approvals and comply with requirements of state agencies that regulate certain
occupational educational programs such as, for example, VN and phlebotomy. The California Board of Registered Nursing approves the
Associate degree of Nursing program at HDMC. The VN programs at HDMC, Integrity and CCMCC are approved by BVNPT. The phlebotomy
programs at HDMC, CCC and CCMCC are approved by the California Department of Public Health. CCC will also require Texas Board of
Nursing approval to offer VN and registered nursing programs at the new planned campus in Houston, Texas. CCC has submitted a letter
of intent to the Texas Board of Nursing and expects to submit its application after it receives TWC approval. In addition, CCC will
require approval from the Texas Higher Education Coordinating Board (“THECB”) to offer degree programs at the Houston
campus, and expects to submit its applications to the THECB for UT, cardiac sonography, MRI and registered nursing degree programs
at the same time as its TWC application. In addition, we are subject to state consumer protection laws.

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Attorneys
general in many states have become more active in enforcing consumer protection laws, including, for example, laws related to marketing,
advertising and recruiting practices and the financing of education at for-profit educational institutions. Further, some state attorneys
general have partnered with federal and state agencies to review industry practices and collaborate on enforcement actions against educational
institutions. These actions increase the likelihood of scrutiny of marketing, advertising, recruiting, financing, and other practices
of educational institutions and may result in unforeseen consequences, increasing risk and making our operating environment more challenging.

Adverse
media coverage regarding the allegations of state consumer protection law violations by us or other for-profit education companies could
damage our reputation, result in decreased enrollments, revenues and profitability and have a negative impact on our stock price. Such
coverage could also result in continued scrutiny and regulation by ED, Congress, accreditors, state legislatures, state attorneys general
or other governmental authorities of us and other for-profit educational institutions.

State
education laws and regulations may limit our campuses’ ability to operate or to award degrees, diplomas, or certificates or
offer new programs. Moreover, under the HEA, authorization by state education agencies is necessary to maintain eligibility to
participate in the Title IV Programs. ED regulations also require institutions offering postsecondary education through distance
education to students located in a state in which the institution is not physically located (as determined by the institution at the
time of a student’s initial enrollment and, if applicable, upon formal receipt of information from the student that their
location has changed to another state) to meet state educational requirements in that state or participate in a state authorization
reciprocity agreement in order to disburse Title IV funds to such students. We have obtained approval to offer portions of our
programs via distance education from ACCET for CCC, CCMCC and HDMC, ABHES for Integrity, and from BPPE for HDMC, CCC, CCMCC and
Integrity. The State of California does not, however, presently participate in any state authorization reciprocity agreement whereby
our institutions may offer programs via distance education to students located in other states without applicable state
authorizations from those other states. Our institutions presently do not have any state postsecondary authorizations outside of
California, although CCC plans to seek postsecondary authorization in Texas and has not yet submitted its application to the TWC.
CCC does not currently plan to provide programs via distance education to residents of states other than California and Texas, and
the other Legacy institutions only provide distance education to residents of California. In addition, an institution must make
disclosures readily available to enrolled and prospective students regarding whether programs leading to professional licensure or
certification meet state educational requirements, and provide a direct disclosure to students in writing if the program leading to
professional licensure or certification does not meet state educational requirements in the state in which the student is located
(which is only California for our current students, and will include Texas once students begin classes at the planned campus in
Houston). Under ED’s rules effective July 1, 2024, an institution must certify that its programs satisfy the applicable
educational requirements for professional licensure or certification needed to practice or find employment in an occupation for
which the program prepares a student in the state in which the school is located or where a student is located or intends to seek
employment (which, although our current students are located in California, could be a state other than California and could require
us to refrain from enrolling students in a state if our program does not satisfy the applicable educational requirements in the
state). We believe the Title IV-eligible educational programs offered by our institutions satisfy all currently applicable state
educational requirements for professional licensure or certification.

State
legislatures often consider legislation affecting regulation of postsecondary educational institutions. Our institutions are located
in California (although we anticipate CCC will soon operate a location in Texas) which has expansive laws and regulations impacting
for-profit schools like our institutions. Enactment of this legislation and ensuing regulations, or changes in interpretation of
existing regulations, may impose substantial costs on our institutions and require them to modify their operations in order to
comply with the new regulations. If we are unable to comply with applicable past, current or future state education, consumer
protection, licensing, authorization or other requirements in California, Texas, and in any other states in which we may operate in
the future, or determine that we are unable to cost effectively comply with new or revised requirements, we could be subject to
liabilities, sanctions and other consequences. See “Risk Factor – Any failure to comply with state laws and
regulatory requirements, including educational regulations, or new state legislative or regulatory initiatives affecting our
institutions, could have a material adverse effect on our total student enrollment, results of operations, financial condition and
cash flows.”

15

Institutional
Accreditation. In the U.S., accrediting agencies are non-governmental entities that periodically review the academic quality
of an institution’s instructional programs and its administrative and financial operations to ensure the institution has the resources
to perform its educational mission. Accrediting agencies impose standards that extend to most aspects of an institution’s operations
and educational programs including, but not limited to, requirements to maintain threshold graduation and job placement rates for its
educational programs. HDMC, CCC, and CCMCC are currently accredited by ACCET through April 2029, April 2030, and April 2031, respectively.
Integrity is accredited by ABHES through February 2032. ED requires an institution to be accredited by an ED-recognized accrediting agency
in order for the institution to participate in the Title IV Programs. ACCET and ABHES are ED-recognized accrediting agencies. The failure
to comply with accreditation standards could subject an institution to additional requirements, sanctions, and consequences including
the potential loss of accreditation. See “Risk Factor - If one or more of our institutions fails to maintain institutional accreditation,
or if certain of our programs cannot obtain or maintain programmatic accreditation, our student enrollments would diminish, and our business
would suffer.”

Programmatic
Accreditation. Many states and professional associations require professional programs to be accredited. While
programmatic accreditation is not a sufficient basis to qualify for institutional Title IV Program certification, programmatic
accreditation may improve employment opportunities for program graduates in their chosen field. Moreover, ED requires an institution
to hold programmatic accreditation for an educational program if required by a state or federal agency (including as a condition of
employment in the occupation for which the institutional program prepares the students). The veterinary technology program at CCC is
accredited by the American Veterinary Medical Association. Integrity’s Registered Nurse to Bachelor of Science in Nursing
program has received initial accreditation from the Commission for Nursing Education Accreditation. In the Spring 2026 visit cycle,
ABHES conducted a reaccreditation visit for CCMCC’s Associate of Applied Science in Surgical Technology. CCMCC was granted
reaccreditation for the program, with no comments, through February 28, 2033. Additionally, CCC and HDMC are pursuing initial
programmatic accreditation with ABHES for the Surgical Technology Associate of Applied Science program. ABHES completed its Fall
2026 visit for CCC’s program and its visit report is pending; CCC expects the ABHES commission to consider the program in
January 2027, with a decision expected in mid-February 2027. HDMC expects to submit its self-study in November 2026 for a Spring
2027 visit, with consideration by the ABHES commission expected in July 2027 and a decision expected in August 2027. All of the
Title IV-eligible educational programs offered by our institutions are within the scope of institutional accreditation from either
ACCET or ABHES, and we do not believe any of our Title IV-eligible educational programs that do not hold programmatic accreditation
are required to hold programmatic accreditation by any currently applicable state or federal agency. Those of our programs that do
not have programmatic accreditation where available, or fail to maintain such accreditation, may experience adverse publicity, loss
of access to Title IV funds, declining enrollments, litigation or other claims from students or suffer other adverse impacts, which
could result in it being impractical for us to continue offering such programs.

ED
Recognition of Accrediting Agencies. Our participation in the Title IV Programs is dependent on ED continuing to recognize the
accrediting agencies that accredit our colleges and universities. Each of our institutions is currently accredited by an ED-recognized
accrediting agency. The standards and practices of these agencies have become a focus of attention by state attorneys general, members
of Congress, ED’s Office of Inspector General and ED over recent years.

ED
held negotiated rulemaking sessions between April and May 2026 to consider amendments to the regulations respecting the
Secretary’s recognition of accrediting agencies and related institutional eligibility requirements for the Title IV Programs.
The negotiators reached consensus on the proposed rule, which covers topics including institutions switching from one accreditor to
another, the recognition process for accrediting agencies, and the recognition criteria for accrediting agencies, including
requirements for their standards and policies regarding acceptance of transfer credit, institutional outcomes, academic freedom, and
violations of federal and state law. On August 19, 2026, ED published a notice of proposed rulemaking containing language materially
identical to the consensus language and will undergo a period of public notice and comment before ED makes any amendments and
publishes the final regulations. Therefore, we cannot predict the ultimate content and timing of the final regulations. The earliest
the new regulations could go into effect is July 1, 2027. Any future regulations or regulatory changes resulting from this
negotiated rulemaking process could impact the ability of the accreditors that accredit our institutions to maintain recognition by
ED and the accreditation requirements applicable to our institutions. We cannot predict whether and how such rulemaking would impact
our institutions and operations.

16

If
ED withdraws recognition from ACCET and/or ABHES in the future, ED may continue our schools’ eligibility for a period of up to
18 months from the date of the withdrawal of recognition, and our schools could apply for accreditation from the other ED-recognized
accrediting agencies. ED could impose provisional certification and other conditions and restrictions on our schools during this period.
If ACCET and/or ABHES lose recognition from ED and our schools are unable to obtain accreditation from a different ED-recognized accrediting
agency in the required time period, our schools could lose eligibility to participate in Title IV Programs.

Congressional
Action. The U.S. Congress must periodically reauthorize the HEA and other laws governing the Title IV Programs and annually determine
the funding level for each Title IV Program, and may pass new laws or revise existing laws at any time. Political and budgetary concerns
significantly affect the Title IV Programs. We cannot predict when or whether Congress will consider or vote on legislation to reauthorize
the HEA or to create new laws or revise existing laws. Furthermore, we cannot predict with any certainty the outcome of the HEA reauthorization
process nor the extent to which any legislation that Congress could adopt at any time could materially affect our business, financial
condition and results of operations. Current requirements for student or school participation in Title IV Programs may change or one
or more of the present Title IV Programs could be replaced by other programs with materially different student or school eligibility
requirements. For example, the American Rescue Plan Act of 2021 (“ARPA”) was signed into law in March 2021 and included,
among other things, a provision that amended the 90/10 Rule in the HEA. See “Risk Factors - Our institutions could lose their
eligibility to participate in the Title IV programs if the percentage of their revenues derived from applicable federal educational student
aid programs is too high.” If we cannot comply with the provisions of the HEA, as they may be enforced or amended, or if the
cost of such compliance is excessive, or if funding is materially reduced, our revenues or profit margin could be materially adversely
affected.

On
July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”), which became effective July 1, 2026
and makes changes to the HEA, including changes impacting the Title IV programs. ED conducted a negotiated rulemaking process in 2025
and 2026 for the purpose of establishing new regulations implementing the new OBBBA requirements. See “Education Regulations –
Negotiated Rulemaking.” We are currently assessing, and will continue to assess, the potential impact of the requirements on us
and our institutions. Among other things, the OBBBA establishes limits on the amount of Title IV loans students and parents can borrow.
These limits will not apply to students that will be enrolled as of the effective date, up until their expected time of completion as
defined by the OBBBA. The OBBBA establishes a limit of $20,000 annually and $65,000 in total for PLUS loans taken out by parent borrowers
for undergraduate programs. The OBBBA also creates a lifetime loan limit of $257,500 for all borrowers. It also requires institutions
to prorate loans for students attending less than full-time. We are in the process of evaluating the impact these loan limitations may
have on our institutions and enrollments and the extent to which alternative sources of funding such as third-party loans may be needed
for some of our students.

The
OBBBA also establishes a new accountability measure that applies to our degree programs and that is based on a comparison of graduate
earnings to the earnings of working adults without degrees. See “Education Regulations - Financial Value Transparency, Gainful
Employment, and Accountability Regulations.” We cannot yet predict with certainty whether our degree programs will meet the accountability
measure or whether they will be at risk of losing eligibility to participate in the Title IV loan programs.

The
OBBBA also restricts student eligibility for the Pell Grant. See “Education Regulations – Negotiated Rulemaking.”
Based on our assessment, we do not currently expect this change to have a material impact on the Pell eligibility of our
students. The
OBBBA also establishes Workforce Pell Grants for eligible students enrolled in certain short-term educational programs that meet
eligibility requirements. See “Education Regulations - Negotiated Rulemaking.” We do not plan to participate in the
Workforce Pell Grants at this time but we may evaluate potential opportunities under the regulations in the future.

Additionally,
the OBBBA delays the effective date of the 2022 version of the revised borrower defense to repayment regulations and closed school loan
discharge regulations for ten years, until July 1, 2035. See “Education Regulations - Borrower Defense to Repayment Regulations.”

17

Congressional
committees and members actively continue to propose and consider legislation on a wide range of topics related to the Title IV programs
that could impact further the amount of Title IV funding available to schools and students and impose additional accountability requirements
on institutions and also that could eliminate or modify certain rules that are less favorable to schools like ours. However, the process
of Congressional passage of new legislation is ongoing, is subject to further negotiation and amendment, and is further subject to Congressional
approval. Therefore, the timing and outcome of this process and the scope of any additional legislation that might be enacted cannot
be predicted with any certainty at this time. We are continuing to monitor the process.

Executive
Action. There are indications the new administration, and potentially the U.S. Congress, will attempt to dissolve ED, diminish
its operational role, and/or transfer some or all of its functions to one or more agencies. In March 2025, ED implemented a reduction
in force (“RIF”) that, coupled with resignations by ED staff, reportedly reduced ED’s workforce by approximately half.
The RIF also eliminated several school participation divisions, including the school participation division that previously oversaw the
operations of our institutions, and eliminated or significantly reduced several other offices or divisions within ED. We currently are
working with other offices and personnel at ED on some of our pending matters, but it is possible that we could encounter delays and
difficulties obtaining timely ED approval of recent and future acquisitions of other schools. See “Education Regulations –
School Acquisitions” and “Education Regulations – Change of Control.” We also could encounter delays and difficulties
obtaining timely ED approval of new campuses or other educational programs for which we wish to offer Title IV funds to students and
which require ED approval. See “Education Regulations – Opening Additional Campuses and Adding Educational Programs.”

In
March 2025, President Trump issued an Executive Order calling for all necessary steps to close ED although the executive order did not
indicate the process or timing for accomplishing this task nor identify where some of the functions of ED might be transferred. In 2025
and 2026, ED announced several new interagency agreements under which other federal agencies will provide certain services to ED. We
continue to monitor developments in this area, but cannot yet predict whether the administration or Congress will be successful in closing
or further reducing ED and/or transferring some or all of its functions to one or more agencies, whether such a proposal would disrupt
or change the availability of Title IV funds to us and our students or change the rules applicable to us and our schools to continue
receiving Title IV funds, or whether our operations will be impacted by the implementation of the interagency agreements. We also cannot
predict the success of any litigation challenging any efforts to close or restructure ED. Any executive or legislative action impacting
ED, the availability of Title IV funds, or the rules applicable to us could have a material adverse effect on us and our institutions.

Financial
Value Transparency, Gainful Employment, and Accountability Regulations. On May 19, 2023, ED published a notice of proposed rulemaking
on financial value transparency and gainful employment, and on October 10, 2023, ED published final regulations which became effective
on July 1, 2024. The financial value transparency and gainful employment regulations included standards for annually evaluating postsecondary
educational programs based on the calculation of debt-to-earnings rates and an “earnings premium” measure. If these calculations
show that any of our educational programs do not comply with debt-to-earnings or median earnings regulatory thresholds for two of three
consecutive years, those educational programs would lose Title IV Program eligibility. Multiple lawsuits were filed challenging these
regulations, and these were consolidated into one case in the U.S. District Court for the Northern District of Texas. ED subsequently
filed a motion for summary judgment, which was granted by the court on October 2, 2025, upholding the validity of the regulations. On
November 24, 2025, the plaintiffs appealed the summary judgment ruling. We cannot predict the outcome of the appeal at the Fifth Circuit
Court of Appeals.

The
rule establishes formulae for calculating these rates using data such as student debt, student earnings data, and median earnings data
for working adults with only a high school diploma or GED, which the rule uses to compare to median earnings data of the institution’s
graduates. Under the regulations, ED will annually calculate and publish the debt-to-earnings rates and median earnings data for our
educational programs.

18

However,
ED published final regulations on July 1, 2026 that create new accountability measures based in part on the accountability metrics in
the OBBBA and the metrics in the existing gainful employment rules. The new earnings premium measure applies to all degree and non-degree
programs at all institutions and eliminates the debt-to-earnings rate measure in the existing gainful employment regulations. Under the
earnings premium measure for undergraduate programs (as opposed to the separate measure for graduate programs), the median annual earnings
of program completers are compared to the “earnings threshold,” which is the median earnings of holders of high school diplomas
who are working adults aged 25-34 using the methodology prescribed in the regulations. If a program does not meet the applicable standard,
the institution must provide a prescribed warning to students and prospective students explaining that it has not passed ED’s standards
based on reported earnings of program graduates and that the program could lose access to Direct Loans based on the next calculated metrics.
The warning must also include information about accessing the program information website maintained by ED and explain that the student
must acknowledge the student viewed the warning in order for the institution to disburse Title IV funds to the student. If the program
fails the earnings premium measure in two out of three consecutive award years for which the earnings premium measure is calculated,
this would result in the program’s loss of eligibility for Title IV Direct Loans once ED completes a termination action under its
established proceedings, unless the institution successfully appeals under those proceedings. If more than 50% of an institution’s
Title IV-recipient students enrolled in, or more than 50% of the institution’s total Title IV funds are from, programs that fail
the earnings premium measure in two out of three consecutive award years for which the earnings premium measure is calculated, the institution
could be deemed not administratively capable and be placed on provisional status, and the programs could potentially lose access to all
Title IV HEA funds if the institution does not successfully appeal the determination. If the institution meets this threshold in at least
one of the three most recent consecutive award years, the institution must provide a warning explaining that program could also lose
access to the other Title IV funds. The final rule also, among other things, describes the process and formulas for calculating earnings
accountability measures, revises the requirements for institutional reporting to ED, specifies the period of ineligibility for programs
that fail the earnings premium measure, allows for limited retention of eligibility during orderly program closure, and modifies the
institutional data ED is required to disclose on its program information website (this data will continue to include a program’s
earnings premium measure).

The
new regulations will go into effect on July 1, 2027 with certain provisions having taken effect on August 31, 2026.
It is expected that the first accountability measure calculations will take place in early 2027, and that programs cannot lose
eligibility under the new rules until July 1, 2028 after the second accountability measures have been calculated. These dates are
subject to change. We are currently evaluating the potential impact of the regulations on the Company. If one or more of our
programs fail to comply with the new requirements, those programs could lose access to Title IV Direct Loans, and potentially all
Title IV eligibility, which could have a material adverse effect on our student population and our revenues. The new regulations
could also require us to modify or eliminate programs to comply with the new regulations.

We
expect the new regulations will impact our institutions and operations, but we cannot predict the ultimate scope, content, and impact
of the regulations and guidance including any regulations further implementing the new OBBBA requirements. We are currently assessing,
and will continue to assess, the potential impact of the new requirements on us and our institutions and to monitor the negotiated rulemaking
process.

ED
issued guidance on August 11, 2026 requiring institutions that failed to report, or fully report, gainful employment data for prior
years to provide such data by January 15, 2027. If one or more of our institutions fail to meet the October 1, 2026 reporting
deadline for the most recent year of gainful employment data or fail to provide any missing gainful employment data for prior years
by January 15, 2027, ED could impose fines or sanctions or could take administrative action against our institutions.

19

Borrower
Defense to Repayment Regulations. In 1994, pursuant to certain provisions of the Higher Education Act, ED published its first
version of the “borrower defense to repayment” (“BDR”) regulations which generally allow federal student loan
borrowers to assert a defense to repaying their federal loans based on the conduct of the institution they attended. The amount of loans
discharged by ED pursuant to an adjudicated BDR claim may be assessed by ED as a Title IV Program liability against the institution.
On November 1, 2016, the Department adopted revised BDR regulations that became effective on July 1, 2017. Under the 2017 version of
the BDR regulations, borrowers with federal student loans disbursed after July 1, 2017 can assert a defense to repayment and be eligible
for relief based on a nondefault, favorable, contested judgment against the institution from a state or federal court; a claim that
the institution failed to perform its obligations under a contract with the student or a claim the institution committed a “substantial
misrepresentation” on which the borrower reasonably relied to his or her detriment. On September 23, 2019, the Department again
revised its BDR regulations effective July 1, 2020, and created a distinct standard and process for BDR applications applicable to federal
student loans first disbursed after July 1, 2020. Under the 2019 version of the BDR regulations, a borrower can assert a defense to repayment
and be eligible for relief if the borrower establishes that the institution made a misrepresentation of material fact upon which the
borrower reasonably relied in deciding to obtain their loan; the misrepresentation related to the borrower’s enrollment or continuing
enrollment at the institution or the provision of education services for which the loan was made; and the borrower was financially harmed
by the misrepresentation.

On
November 1, 2022, ED again revised the BDR regulations with an effective date of July 1, 2023. The 2022 version of the BDR regulations
included amendments regarding, among other things, (i) acts or omissions by or on behalf of an institution of higher education a borrower
may assert as a defense to repayment of certain Title IV Program loans; (ii) procedures for adjudicating borrower defense claims, and
(iii) prohibiting the use of mandatory pre-dispute arbitration clauses and class action waivers in enrollment agreements and requiring
disclosures of judicial and arbitration filings and awards pertaining to a borrower defense claim.

Among
other things, the revised 2022 version of the BDR regulations also amended the processes for borrowers to receive from ED a
discharge of the obligation to repay certain Title IV Program loans when the BDR applications are received on or after, or pending
with ED as of July 1, 2023. The revised 2022 version of the BDR regulations applies the revised federal BDR standard to all BDR
claims received on or after, or pending with the Secretary as of July 1, 2023, but would not allow for recovery against institutions
for discharged amounts first disbursed prior to July 1, 2023 unless the BDR claim would have been approved under the substantive BDR
standard applicable to the time period in which the loan was disbursed as set forth in the prior versions of the BDR regulations.
The defenses to repayment are based on certain acts or omissions, including misrepresentations by an institution or a covered party.
The regulations establish detailed procedures and standards for the loan discharge processes, including the information required for
borrowers to receive a loan discharge, and the authority of ED to seek recovery from the institution of the amount of discharged
loans. The 2022 version of the revised BDR regulations was to take effect on July 1, 2023, in addition to certain closed school loan
discharge provisions that are part of the same rule, but are currently enjoined and delayed. The Career Colleges and Schools of
Texas (“CCST”) filed a complaint challenging the regulations in February 2023. In April 2024, the U.S. Court of Appeals
for the Fifth Circuit granted a preliminary injunction to block enforcement of the revised 2022 version of the BDR regulations while
the case is pending. Further, the OBBBA, enacted July 4, 2025, delays the effective date of the 2022 version of the revised BDR
regulations for ten years, until July 1, 2035. Therefore, the amendments to the BDR regulations that were to take effect on July 1,
2023 are not in effect, but the previous BDR regulations in effect prior to July 1, 2023, which first became effective in 2020,
generally remain in effect in the meantime and apply different substantive standards and procedures based on when a BDR
claimant’s loans were disbursed. CCST filed an amended complaint in March 2026 to also challenge the version of the BDR
regulations that became effective in 2020. We cannot predict the outcome of this pending litigation.

On
June 22, 2022, ED reached a settlement with plaintiffs in the case titled Sweet v. Cardona, which was filed by student loan borrowers
to challenge ED’s adjudication of BDR claims. The settlement resulted in automatic relief of claims pending as of June 22, 2022
that were filed against institutions on a list of about 150 institutions named in the settlement agreement, which did not include any
of our institutions. In addition, under the settlement, any borrower who filed a defense to repayment claim between June 22, 2022 and
November 15, 2022 are “Post-Class Applicants” whose applications were to be adjudicated under the 2016 version of the BDR regulations
and decided by January 2026. HDMC received and timely responded to seven BDR applications from Post-Class Applicants. CCC, Integrity,
and CCMCC (at least since we acquired CCMCC) did not receive any BDR applications from Post-Class Applicants. If we or our representatives
are found to have engaged in certain acts or omissions under the broad definitions contained in the 2016 version of the BDR regulations,
or other BDR regulations that could be in place in the future, we could be subject to substantial repayment obligations and subject to
other sanctions.

20

Since
March 2026, CCC has received six BDR applications from ED, HDMC has received eighteen BDR applications from ED, and Integrity has received
four BDR applications from ED. CCC, HDMC, and Integrity have either timely responded to, or are in the process of timely responding to,
these BDR applications, disputing the validity of the claims. CCMCC has not received any BDR applications in 2026. ED published guidance
on March 30, 2026 explaining that it had resumed adjudicating BDR applications that are not impacted by the Sweet v. Cardona settlement.
The guidance explains that ED will adjudicate the BDR applications under the currently effective regulations, and that ED will notify
institutions of the applications received. It is possible that we could receive BDR claims in the future, including because the March
30, 2026 guidance indicates ED had not yet notified institutions of BDR claims that would be adjudicated under the version of the BDR
regulations that became effective in 2020. If we or our representatives are found to have engaged in certain acts or omissions under
the definitions contained in the BDR regulations, or other BDR regulations that could be in place in the future, we could be subject
to substantial repayment obligations and subject to other sanctions.

The
enjoined 2022 version of the BDR regulations, and the versions of the BDR regulations that are currently in effect and that could be
in effect in the future, could have a material adverse effect on our business, financial condition, results of operations, and cash flows
and result in the imposition of significant restrictions on us and our ability to operate, including a requirement that our institutions submit a letter of credit based on expanded standards of financial responsibility. See “Education Regulations - Financial Responsibility
Standards.”

In
recent years, ED has been more active in processing BDR applications and has recently distributed claims to institutions for an opportunity
to respond to borrower allegations. ED may, on its own or in response to other constituencies, allocate additional resources to reviewing
and adjudicating BDR applications from federal student loan borrowers. We cannot predict how many BDR applications have been filed by
our former students, but if we receive such claims from ED, we may incur significant costs in responding to the borrower allegations
and, if adjudicated as valid by ED, repaying the federal government for the amount of loans discharged pursuant to such claims.

ED
also grants closed school loan discharges to students when it determines the student’s institution or campus has closed. When an
institution or location meets ED’s definition of a closed school or location, affected students can apply for a discharge of the
Title IV loans incurred for the program of study the student did not complete due to the closure, and ED grants the discharge if the
student meets certain requirements. ED also may seek to recover the cost of the discharge from the institution. If any of our locations
or institutions close, our institutions could be subject to liabilities for closed school loan discharges. In conjunction with the 2022
revisions to the BDR rule, ED also revised the closed school loan discharge provisions. However, these revisions are also enjoined as
well as delayed under the OBBBA. We cannot predict the outcome of any future revisions to the closed school loan discharge provisions
that ED may initiate.

90/10
Revenue Test. Under the HEA, a proprietary institution that derives more than 90% of its total revenue from the Title IV Programs
or, for fiscal years beginning on or after January 1, 2023 from all federal educational assistance funds, for two consecutive fiscal
years becomes immediately ineligible to participate in the Title IV Programs and may not reapply for eligibility until the end of at
least two fiscal years (“90/10 Rule”). An institution whose receipts of applicable funds exceed 90% of revenue for a single
fiscal year will be placed on provisional certification, be required to notify ED and its students of the possibility of a loss of Title
IV Program eligibility, and may be subject to other enforcement measures, including a requirement to submit a letter of credit. See “Education
Regulations - Financial Responsibility Standards.” If an institution violated the 90/10 Rule and became ineligible to participate
in Title IV Programs but continued to disburse Title IV Program funds, ED would require the institution to repay all Title IV Program
funds received by the institution after the effective date of the loss of eligibility.

We
have calculated the 90/10 Rule percentage for the 2025, 2024, and 2023 fiscal years as follows for HDMC, CCC, and Integrity: HDMC 86.82%,
87.55%, and 84.53%; CCC 80.35%, 79.51%, and 74.48%; and Integrity 84.71%, 84.19%, and 88.14%, respectively. CCMCC’s 90/10 Rule
percentage available at the time the Company was acquiring CCMCC was 48.63%, for its 2025 fiscal year was 59.80%, and the percentage
for the 2026 fiscal year is expected to be below 90%. Our calculations of the 90/10 Rule percentage for the 2026 fiscal year for HDMC,
CCC, Integrity, and CCMCC are due on December 31, 2026 and each is expected to be below 90%. The 90/10 calculations for our institutions
are subject to review and potential recalculation by ED. In addition, the 90/10 Rule is complex and there is some ambiguity in certain
technical aspects of the calculation methodology by ED under the 90/10 Rule. If ED comes out with additional guidance or interpretations
that are different than our interpretations, ED could recalculate the 90/10 Rule percentages of our institutions, which could result
in one or more of the percentages exceeding 90%. A loss of eligibility to participate in Title IV Programs for any of our institutions
would have a significant impact on the rate at which our students enroll in our programs and on our business and results of operations.
Moreover, if an institution violated the 90/10 Rule and became ineligible to participate in Title IV Programs but continued to disburse
Title IV Program funds, ED would require the institution to repay all Title IV Program funds received by the institution after the effective
date of the loss of eligibility.

21

ARPA
amended the 90/10 Rule by treating other federal student financial assistance funds in the same manner as Title IV Program funds in the
90/10 Rule calculation. This amendment requires our institutions to limit the combined amount of Title IV Program funds and other federal
student financial assistance funds in a fiscal year to no more than 90% in a fiscal year as calculated under the 90/10 Rule. ED published
final regulations on the 90/10 Rule on October 28, 2022. The final regulations became effective July 1, 2023 and applied to fiscal years
beginning on or after January 1, 2023 (which was the fiscal year ending June 30, 2024 for our schools). The new rule modified how institutions
counted revenue when calculating compliance with the 90/10 Rule, and added a requirement to notify students of the potential loss of
eligibility resulting from not meeting the 90/10 standard, among other changes. ED published a Notice in the Federal Register listing
the types of funds that are considered federal education assistance funds under the new 90/10 Rule. The funds include GI Bill funding
and Military Tuition Assistance, among other sources of funds. We expect the change in the 90/10 Rule will increase our 90/10 Rule percentages
and make it more difficult to comply with the 90/10 Rule and could require changes to our operations in order to maintain compliance.

ED
regulations have restricted the ability of institutions to limit the amount of Title IV Program loans that students and parents may borrow
which can impact our ability to control compliance with the 90/10 Rule at our institutions. However, under a provision of the OBBBA that
became effective July 1, 2026, institutions are permitted to limit the total amount of loans that a student may borrow, and that a parent
may borrow on behalf of a student, as long as the limit is applied consistently to all students in a program of study. In addition, there
is a lack of clarity regarding some of the technical aspects of the calculation methodology under the 90/10 Rule, which may lead to regulatory
action or investigation by ED. Changes in, or new interpretations of the calculation methodology or other industry practices under the
90/10 Rule could further significantly impact our compliance with the 90/10 Rule, and responding to any review or investigation by ED
involving us could require a significant amount of resources.

Efforts
to reduce the 90/10 Rule percentage for our institutions have involved and may in the future involve taking measures that involve
interpretations of the 90/10 Rule that are without clear precedent, reduce our revenue or increase our operating expenses (or all of
the foregoing, in each case perhaps significantly). Because of the changes to the 90/10 Rule made by ARPA and ED, we may be required
to make structural changes to our business to remain in compliance, which changes may materially alter the manner in which we
conduct our business and materially and adversely impact our business, financial condition, results of operations and cash flows.
Furthermore, these required changes could be unsuccessful and could make more difficult our ability to comply with other important
regulatory requirements, such as the cohort default rate regulations.

However,
we cannot predict the need or timing of any such changes, whether these changes would be successful in maintaining compliance with the
90/10 Rule or whether such changes will have other adverse effects on our business.

ED’s
current proposed regulatory agenda includes an intent to address certain Title IV eligibility issues via negotiated rulemaking, including
amendments to the 90/10 Rule. We cannot predict whether or when ED may amend the 90/10 Rule or the impact any changes to the 90/10 Rule
may have on our schools.

Cohort
default rate. The HEA limits participation in the Title IV Programs by institutions whose percentage of former students who defaulted
on the repayment of certain federally guaranteed or funded student loans (the “cohort default rate”) exceeds prescribed thresholds.
ED calculates these rates based on the number of students who have defaulted, not the dollar amount of such defaults. The cohort default
rate is calculated on a federal fiscal year basis and measures the percentage of students who enter repayment of a loan during the federal
fiscal year and default on the loan on or before the end of the federal fiscal year or the subsequent two federal fiscal years.

Under
the HEA, an institution whose cohort default rate is 30% or greater for three consecutive federal fiscal years loses eligibility to participate
in certain Title IV Programs and the Pell programs for the remainder of the federal fiscal year in which ED determines that such institution
has lost its eligibility and for the two subsequent federal fiscal years. An institution whose cohort default rate for any single federal
fiscal year exceeds 40% loses its eligibility to participate in certain Title IV Programs for the remainder of the federal fiscal year
in which ED determines that such institution has lost its eligibility and for the two subsequent federal fiscal years. If an institution’s
three-year cohort default rate equals or exceeds 30% in two of the three most recent federal fiscal years for which ED has issued cohort
default rates, the institution may be placed on provisional certification status and could be required to submit a letter of credit to
ED. See “Risk Factor - A failure to maintain compliance with ED’s “financial responsibility” requirements
would have negative impacts on our operations.”

22

In
September 2025, ED released the final cohort default rates for the 2022 federal fiscal year. These are the most recent final rates published
by ED. The rates for our existing institutions for the 2022, 2021, and 2020 federal fiscal years are as follows: HDMC 0%, 0%, and 0%;
CCC 0%, 0% and 0%; Integrity 0%, 0%, and 0%; and CCMCC 0%, 0%, and 0%, respectively. Consequently, none of our institutions had a cohort
default rate equal to or greater than 30% for the 2022, 2021, and 2020 federal fiscal years. In March 2026, ED released the draft cohort
default rates for the 2023 federal fiscal year. The draft rates for our institutions for the 2023 federal fiscal year are as follows:
HDMC 0.3%, CCC 1.4%, Integrity 0%, and CCMCC 0.5%. During the COVID-19 pandemic, ED temporarily suspended federal student loan repayment
obligations. This suspension, which lasted over three years, contributed to a reduction in our cohort default rates. Our cohort default
rates could be substantially higher for the periods after October 2023, when the suspension expired if borrowers do not timely repay
their federal student loans. We are engaging in activities aimed at reminding borrowers of their obligations to repay loans and to reduce
the number of borrowers who default on their loans; however, we cannot predict or guarantee that these activities will be successful
or that the cohort default rates will not increase or exceed applicable eligibility thresholds.

Financial
Responsibility Standards. All institutions participating in the Title IV Programs must satisfy specific standards of financial
responsibility. ED evaluates institutions for compliance with these standards each year, based on the institution’s annual audited
financial statements, as well as following a change in ownership resulting in a change of control of the institution. The most significant
financial responsibility measurement is the institution’s composite score, which is calculated by ED based on three ratios:

●
the
equity ratio, which measures the institution’s capital resources, ability to borrow and financial viability;

●
the
primary reserve ratio, which measures the institution’s ability to support current operations from expendable resources; and

●
the
net income ratio, which measures the institution’s ability to operate at a profit.

ED
assigns a strength factor to the results of each of these ratios on a scale from negative 1.0 to positive 3.0, with negative 1.0 reflecting
financial weakness and positive 3.0 reflecting financial strength. ED then assigns a weighting percentage to each ratio and adds the
weighted scores for the three ratios together to produce a composite score for the institution. The composite score must be at least
1.5 for the institution to be deemed financially responsible without the need for further oversight. If an institution’s composite
score is below 1.5, but is at least 1.0, it is in a category denominated by ED as “the zone.” Under ED regulations, institutions
that are in the zone typically may be permitted by ED to continue to participate in the Title IV Programs by choosing one of two alternatives:
1) the “Zone Alternative” under which an institution is required to make disbursements to students under the HCM1 payment
method (or another payment method that differs from the standard advance payment method) and to notify ED within 10 days after the occurrence
of certain oversight and financial events or 2) submit a letter of credit to ED equal to at least 50 percent of the Title IV Program
funds received by the institution during its most recent fiscal year. ED permits an institution to participate under the “Zone
Alternative” for a period of up to three consecutive fiscal years. Under the HCM1 payment method, the institution is required to
make Title IV Program disbursements to eligible students and parents before it requests or receives funds for the amount of those disbursements
from ED. Unlike the HCM2 and the reimbursement payment methods, the HCM1 payment method typically does not require schools to submit
documentation to ED and wait for ED approval before drawing down Title IV Program funds. Schools under HCM1, HCM2 or reimbursement payment
methods must also pay any credit balances due to a student before drawing down funds for the amount of those disbursements from ED, even
if the student or parent provides written authorization for the schools to hold the credit balance.

23

If
an institution’s composite score is below 1.0, the institution is considered by ED to lack financial responsibility. If ED determines
that an institution does not satisfy ED’s financial responsibility standards, depending on its composite score and other factors,
that institution may establish its eligibility to participate in the Title IV Programs on an alternative basis by, among other things:

●
posting
a letter of credit in an amount equal to at least 50% of the total Title IV Program funds received by the institution during the
institution’s most recently completed fiscal year; or

●
posting
a letter of credit in an amount equal to at least 10% of the Title IV Program funds received by the institution during its most recently
completed fiscal year accepting provisional certification; complying with additional ED monitoring requirements and agreeing to receive
Title IV Program funds under an arrangement other than ED’s standard advance funding arrangement.

If,
in the future, we are required to satisfy ED’s standards of financial responsibility on an alternative basis, including potentially
by posting irrevocable letters of credit, we may not have the capacity to post these letters of credit which could result in sanctions
including loss of Title IV Program eligibility.

ED’s financial responsibility standards also
include other requirements which, among other things, can deem an institution to lack financial responsibility if (1) the institution’s
audited financial statements include an adverse, qualified, or disclaimed auditor’s opinion unless ED determines such opinion does
not have a significant bearing on the institution’s financial condition, or (2) a disclosure in the notes to the financial statements
about diminished liquidity, ability to continue operations, or ability to continue as a going concern unless ED determines this condition
has been alleviated.

ED
annually evaluates the financial responsibility of HDMC, CCC, Integrity, and CCMCC on a consolidated basis. We have calculated our composite
score for the 2025 fiscal year to be 3.0; however, this score is subject to determination by ED based on its review of our consolidated
audited financial statements for the 2025 fiscal year. Our next composite score will be calculated based on audited financial statements
for the 2026 fiscal year due for submission to ED by December 31, 2026. We expect the composite score for the 2026 fiscal year to exceed
1.5, but the final composite score is subject to our final calculation and to determination by ED based on its review of our consolidated
financial statements for the 2026 fiscal year. However, if our composite scores in the future were to decrease, we may become subject
to the additional requirements noted above or our Title IV Program eligibility could be affected. We cannot predict how long it will
take ED to make its determination or the outcome of its determination.

On
January 30, 2024, due to a failure to timely return unearned Title IV funds to ED, Integrity was required to submit an acceptable form
of financial protection for 25% of the refunds that were made for the fiscal year ended June 30, 2023 in the amount of $18,828. On or
about February 13, 2025, due to a failure to timely return unearned Title IV Program funds to ED in the 2023 fiscal year (prior to the
Company acquiring CCMCC), CCMCC was required to submit an acceptable form of financial protection in the amount of $15,356. Integrity
and CCMCC have submitted the required financial protection to ED. See “Education Regulations - Return of Title IV Program Funds.”

On
October 31, 2023, ED published final regulations with a general effective date of July 1, 2024 that, among other things, amended the
“general” standards of financial responsibility to revise the timeframe for institutions to submit annual audits, require
reporting on the status of foreign entity owners, and add events that constitute a failure to demonstrate an institution is able to meet
financial obligations. These regulations also modified the list of triggering events that could result in ED determining that the institution
lacks financial responsibility and must submit to ED a letter of credit or other form of acceptable financial protection and accept other
conditions on the institution’s Title IV Program eligibility. The regulations create lists of mandatory triggering events and discretionary
triggering events. An institution is not able to meet its financial or administrative obligations if a mandatory triggering event occurs.
The mandatory triggering events include:

●
an institution with a composite score of less than 1.5 has a recalculated composite score of less than 1.0 as determined by ED as a result of an institutional liability from a monetary award or judgment or settlement resulting from a legal proceeding;

●
an institution (or an entity that has submitted financial statements to ED in connection with a change in ownership) is subject to a government enforcement action (sued by a federal or state authority or via a qui tam action) and the action has been pending for 120 days and no motion to dismiss is pending or has been granted;

●
the institution’s
recalculated composite score is less than 1.0 after ED initiates action to recoup funds from the institution after a BDR claim
is decided in the borrower’s favor;

●
an institution or entity that submitted an application with ED for a change of ownership has a recalculated composite score of less than 1.0 after a final monetary judgment, award or settlement that was entered against it at any point through the end of the second full fiscal year after the change of ownership;

24

●
a proprietary institution with a composite score of less than 1.5 or that underwent a change of ownership in the current or previous fiscal year has a recalculated composite score of less than 1.0 as determined by ED as a result of a withdrawal of owner’s equity from the institution unless certain exceptions apply;

●
the institution received
at least half of its Title IV funds in the institution’s most recently completed fiscal year from educational programs
that are “failing” under the earnings accountability criteria;

●
the institution is required to submit a teach-out plan due to financial concerns;

●
the SEC takes certain actions against a publicly listed entity that directly or indirectly owns at least 50% of an institution or such entity fails to comply with certain filing requirements;

●
the
institution did not receive at least 10 percent of its revenue from sources other than Federal educational assistance as calculated
under 90/10 rule during its most recently completed fiscal year;

●
the
institution’s two most recent cohort default rates are 30 percent or greater, unless a pending appeal could reduce one of the
rates;

●
the
institution’s composite score is less than 1.0 when recalculated to reflect the offset of distribution after a contribution;

●
the
institution or entity included in financial statements is subject to adverse or impermissible conditions under a financing arrangement
as a result of ED action;

●
the
institution declares financial exigency to government agency or accrediting agency; or

●
the
institution or an owner files for a receivership or is ordered to appoint a receiver.

ED
also may determine that an institution lacks financial responsibility if one or more of the following discretionary triggering events
occurs and the event is likely to have a significant adverse effect on the financial condition of the institution:

●
a
show cause or similar order from the institution’s accrediting agency or a government authority;

●
a
notice from the institution’s state authorizing or licensing agency of an intent to withdraw or terminate the institution’s
state authorization or licensure if the institution does not take steps to comply with state requirements;

●
the
institution (or an owner entity covered by the regulation) is subject to a default, delinquency, or other adverse creditor event
or to a condition not permitted under the regulation under or related to a loan agreement or other financing agreement or has a judgment
awarding monetary relief entered against it that is subject to appeal or under appeal;

●
there
is a significant fluctuation in Pell Grant and/or Direct Loans received by an institution during a period of award years;

●
high
annual drop-out rates from the institution as determined by ED;

●
ED
requires the institutions to provide additional financial reporting due to a failure to meet financial responsibility standards or
indicators of significant change in the financial condition of the institution;

●
ED
forms a group process to consider pending borrower defense to repayment claims that could be subject to recoupment;

●
a
program is discontinued that enrolls more than 25% of the institution’s total enrolled students who receive Title IV Program
funds;

25

●
the
institution closes a location that enrolls more than 25% of its total enrolled students who receive Title IV Program funds;

●
the
institution, or one of its programs, is cited by a State agency for failing to meet requirements;

●
the
institution, or one of its programs, loses eligibility to participate in another Federal educational assistance program;

●
a
publicly traded company that directly or indirectly owns at least 50% of the institution discloses in public securities exchange
filing that it is under investigation for possible violation of law;

●
the
institution is cited by another federal agency and risks losing education assistance funds by that agency;

●
the
institution is required to submit a teach-out plan due to concerns other than those constituting a mandatory triggering event; or

●
any
other event or condition that ED finds is likely to have a significant adverse effect on the financial condition of the
institution.

The
regulations require an institution to notify ED of the occurrence of a mandatory or discretionary triggering event and, in some cases,
provide an opportunity to submit certain information to ED to demonstrate why the event does not establish the institution’s lack
of financial responsibility or require the submission of a letter of credit and impose other conditions or requirements. If more than
one of these financial responsibility triggers occur, ED could impose separate letters of credit to address each triggering event.

The
financial responsibility regulations could result in ED recalculating and reducing our composite score, on a retroactive basis, to account
for ED estimates of potential losses under one or more of the extensive list of triggering circumstances and also could result in the
imposition of conditions and requirements including a requirement to provide one or more letters of credit or other form of financial
protection. It is difficult to predict the amount or duration of any letter of credit requirements that ED might impose under the regulation.
The requirement to submit letters of credit or to accept other conditions or restrictions could have a material adverse effect on our
schools’ business and results of operations.

Accreditor
and state regulatory requirements also address financial responsibility, and these requirements vary among agencies and also are different
from ED requirements. Any developments relating to our satisfaction of ED’s financial responsibility requirements may lead to additional
focus or review by our accreditors or applicable state agencies regarding their respective financial responsibility requirements.

If
our institutions fail to maintain financial responsibility, they could lose their eligibility to participate in the Title IV Programs,
have that eligibility adversely conditioned or be subject to similar negative consequences under accreditor and state regulatory requirements,
which would have a material adverse effect on our business. In particular, limitations on, or termination of, participation in the Title
IV Programs as a result of the failure to demonstrate financial responsibility or administrative capability would limit students’
access to Title IV Program funds, which would materially and adversely reduce the enrollments and revenues of our institutions.

ED’s
current proposed regulatory agenda includes an intent to address certain topics including financial responsibility requirements via negotiated
rulemaking. We cannot predict whether or how ED will address these requirements or the impact any future changes to financial responsibility
requirements may have on our schools.

Return
of Title IV Program Funds. An institution participating in the Title IV Programs must calculate the amount of unearned Title
IV Program funds that have been disbursed to students who withdraw from their educational programs before completing them, and must return
those unearned funds to ED in a timely manner, which is generally within 45 days from the date the institution determines that the student
has withdrawn. The failure to timely return funds can result in liabilities or sanctions.

26

If
an institution is cited in an audit or program review for late returns of Title IV Program funds for 5% or more of the pertinent students
within the audit or program review sample, or if an audit identifies a material weakness in the institution’s report on internal
controls relating to the return of unearned Title IV Program funds, the institution may be required to post a letter of credit in favor
of ED in an amount equal to 25% of the total amount of Title IV Program funds that should have been returned for students who withdrew
in the institution’s prior fiscal year. Neither HDMC nor CCC has received such a finding in either of the two most recently completed
annual Title IV Program compliance audits submitted to ED. On January 30, 2024, due to a failure to timely return unearned Title IV Program
funds to ED, Integrity was required to submit an acceptable form of financial protection for 25% of the refunds that were made for the
fiscal year ended June 30, 2023 in the amount of $18,828. On or about February 13, 2025, due to a failure to timely return unearned Title
IV Program funds to ED in the 2023 fiscal year (prior to the Company acquiring CCMCC), CCMCC was required to submit an acceptable form
of financial protection in the amount of $15,356. Integrity and CCMCC have submitted the required financial protection to ED.

In
January through March 2024, ED conducted negotiated rulemaking to prepare proposed regulations on several topics including the rules
pertaining to returns of Title IV Program funds. On July 24, 2024, ED promulgated proposed amended regulations related to return of
Title IV calculations. ED published the final regulations on January 3, 2025, with a general effective date of July 1, 2026. The
regulations codify ED’s guidance requiring the date of determination of withdrawal to be documented within 14 days after the
student’s last date of attendance for institutions that take attendance; remove the option for clock-hour programs to use the
“cumulative” method to calculate Title IV earned; and change Return of Title IV calculations for programs offered in
modules.

Negotiated
Rulemaking. ED has promulgated a substantial number of new regulations in recent years that impact our business, including, but
not limited to, the “borrower defense to repayment” regulations discussed in the risk factors below, as well as rules regarding
compensation for persons engaged in certain aspects of admissions and financial aid, state authorization, clock and credit hours, prohibitions
on “substantial misrepresentations,” gainful employment, certification procedures, financial responsibility, administrative
capability, ability to benefit, closed school loan discharges, the 90/10 Rule, changes in ownership, Title IX, cash management, return
of Title IV funds, distance education, accreditation and other topics. These and other regulations have had significant impacts on our
business, requiring a large number of reporting and operational changes and resulting in changes to and elimination of certain educational
programs.

On
July 24, 2025, ED announced its intent to establish two negotiated rulemaking committees to implement recent changes to the Title IV,
HEA programs included in the OBBBA. The first of the two negotiated rulemaking committees (the RISE Committee) convened for one session
in September and October and one session in November. On November 6, 2025, the RISE Committee reached consensus on proposed regulations
related to topics including, for example, new federal student loan borrowing limits for certain borrowers and educational programs, and
the agreed upon language was incorporated into a notice of proposed rulemaking published January 30, 2026. After a period of public notice
and comment, ED published the final rule in the Federal Register on May 1, 2026. The final rule includes reduced limits on PLUS loans
taken out by parent borrowers for undergraduate students to the amounts of $20,000 annually and $65,000 in the aggregate per dependent
child. It also limits aggregate loans over a student borrower’s lifetime to $257,500. This limitation does not apply to student
borrowers during the expected time to complete their credential if the student is enrolled in a program as of June 30, 2026 and a Direct
Loan was made for the program prior to July 1, 2026. Institutions will also be required to reduce federal student loan limits for students
who are enrolled as less than full-time students or enrolled in a period of enrollment of less than one full academic year. The new regulations
went into effect on July 1, 2026 along with the relevant changes in the OBBBA which became effective on that date.

27

The
second of the two negotiated rulemaking committees (the AHEAD Committee) convened for one session in December 2025 and one session in
January 2026. On December 12, 2025, the AHEAD Committee reached consensus on proposed regulations related to Pell Grants, including the
new Workforce Pell program. The agreed upon language was incorporated into a notice of proposed rulemaking published March 9, 2026 and
ED solicited comments on the proposed rule with such comments due by April 8, 2026. ED published the final regulations on May 19, 2026.
The regulations clarify which educational programs are eligible for the Workforce Pell program introduced by the OBBBA. Under the OBBBA
and the final regulations, to be eligible a program must meet certain short-term length requirements (at least 8 but less than 15
weeks and (i) at least 150 but less than 600 clock hours, (ii) at least four but less than sixteen semester or trimester hours, or (iii)
at least six but less than 24 quarter hours) and comply with certain other prohibitions. The regulations also clarify processes for approval
by state governors, the Secretary of Education, and a separate “value-added earnings” measure. Among other requirements,
approval from a governor requires the governor to determine the program prepares students for an occupation that aligns with the state’s
workforce needs, and the Secretary determines whether the program meets completion, placement rate, and value-added earnings requirements.
To comply with the value-added earnings measure, the program’s total published tuition and fees may not exceed the value-added
earnings (as defined in the final regulations) of working students who received a Pell Grant for enrollment in the program and completed
the program within the applicable cohort period. The new regulations went into effect on July 20, 2026. Many of our programs are longer
than the eligibility requirements for the Workforce Pell program, therefore we do not plan to participate at this time, but may evaluate
potential opportunities under the regulations in the future.

On
January 9, 2026, the AHEAD Committee reached consensus on proposed regulations that create new accountability measures based in part
on the accountability metrics in the OBBBA and the metrics in the existing gainful employment rules. The consensus language was incorporated
into a notice of proposed rulemaking published April 20, 2026 which underwent a period of public notice and comment (with such comments
due by May 20). ED published the final regulations on July 1, 2026. The new earnings premium measure applies to all degree and non-degree
programs at all institutions and eliminates the debt-to-earnings rate measure in the existing gainful employment regulations.

If
one or more of our programs fail to comply with the new requirements, those programs could lose access to Title IV Direct Loans, and
potentially all Title IV eligibility, which could have a material adverse effect on our student population and our revenues. The new
regulations could also require us to modify or eliminate programs to comply with the new regulations. See “Education Regulations
- Financial Value Transparency, Gainful Employment, and Accountability Regulations.”

We
expect the new regulations will impact our institutions and operations, but we cannot predict the ultimate scope, content, and impact
of the regulations and guidance including any regulations further implementing the new OBBBA requirements. We are currently assessing,
and will continue to assess, the potential impact of the new requirements on us and our institutions and to monitor the negotiated rulemaking
process.

ED
held negotiated rulemaking sessions between April and May 2026 to consider amendments to the regulations respecting the Secretary’s
recognition of accrediting agencies and related institutional eligibility requirements for the Title IV Programs. See “Education
Regulations – ED Recognition of Accrediting Agencies.” The negotiators reached consensus on the proposed rule, and on August
19, 2026, ED published a notice of proposed rulemaking containing language materially identical to the consensus language which will undergo a period of public notice and comment before
ED makes any amendments and publishes the final regulations. The earliest date the new regulations could take effect is July 1, 2027.
Any future regulations or regulatory changes resulting from this negotiated rulemaking process could impact the ability of the accreditors
that accredit our institutions to maintain recognition by ED and the accreditation requirements applicable to our institutions. We cannot
predict whether and how such rulemaking would impact our institutions and operations.

On
April 4, 2025, ED announced its intention to conduct negotiated rulemaking to prepare proposed regulations on topics pertaining to Title
IV regulations, potentially including Public Service Loan Forgiveness, loan repayment programs, and “streamlining” current
federal student financial assistance regulations. ED held public hearings to discuss the rulemaking agenda on April 29, 2025 and May
1, 2025 and requested comments on rulemaking topics be submitted by May 5, 2025. The Public Service Loan Forgiveness Committee met from
June 30, 2025 to July 2, 2025. ED published a notice of proposed rulemaking on public service loan forgiveness on August 18, 2025, and
published the final regulations on October 31, 2025 with an effective date of July 1, 2026. The regulations include provisions that,
among other things, amend components of the public service loan forgiveness program.

ED’s
current proposed regulatory agenda indicates an intent to address several topics (including through rulemaking), including changes in
ownership, cash management, administrative capability, program length requirements, financial responsibility requirements, and the 90/10
Rule. We cannot predict how ED’s actions on these topics will impact schools like ours. Future regulatory actions by ED or other
agencies that regulate our institutions are likely to occur and to have significant impacts on our business, require us to change our
business practices and incur costs of compliance and of developing and implementing changes in operations, as has been the case with
past regulatory changes.

28

We
cannot predict with certainty the ultimate combined impact of the regulatory changes which have occurred in recent years, nor can we
predict the effect of future legislative or regulatory action by federal, state or other agencies regulating our education programs or
other aspects of our operations, how any resulting regulations will be interpreted or whether we and our institutions will be able to
comply with these requirements in the future. Any such actions by legislative or regulatory bodies that affect our programs and operations
could have a material adverse effect on our student population and our institutions, including the need to cease offering a number of
programs.

Substantial
Misrepresentation. ED’s regulations prohibit an institution that participates in the Title IV Programs from engaging in
misrepresentations regarding the nature of its educational programs, financial charges, graduate employability or its relationship with
ED. A “misrepresentation” includes any false, erroneous, or misleading statement (whether made in writing, visually, orally,
or through other means) that is made by an eligible institution, by one of its representatives, or by a third party that provides to
the institution educational programs, marketing, advertising, recruiting or admissions services and that is made to a student, prospective
student, any member of the public, an accrediting or state agency, or to ED. If ED determines that one of our institutions has engaged
in “substantial misrepresentation,” ED may impose sanctions or other conditions upon the institution including, but not limited
to, initiating an action to fine the institution or limit, suspend, or terminate its eligibility to participate in the Title IV Programs
and may seek to discharge students’ loans and impose liabilities upon the institution. ED defines a “substantial misrepresentation”
to include any misrepresentation on which the person to whom it was made could reasonably be expected to rely, or has reasonably relied,
to that person’s detriment. The definition of “substantial misrepresentation” is broad and, therefore, it is possible
that a statement made by the institution or one of its service providers or representatives could be construed by ED to constitute a
substantial misrepresentation. Other federal agencies, state agencies, and accrediting agencies have similar rules that prohibit certain
types of misrepresentations or unfair marketing and advertising practices by us or others on our behalf on a variety of subjects including,
without limitation, the accuracy and substantiation of rates of graduation, job placement and passage of occupational licensure examinations.
Noncompliance with these requirements could result in sanctions, liabilities, or third-party litigation that could have an adverse effect
on our business and results of operations. ED published a final rule on November 1, 2022 which expanded the scope of prohibited misrepresentations,
and which also prohibits certain types of conduct with respect to the recruitment of students. The adoption and implementation of new
regulations could lead to findings of noncompliance and result in liabilities and other sanctions that could have an adverse effect on
our business and results of operations.

In
addition, the FTC has indicated an increased focus on direct or implied misrepresentations. For example, on October 6, 2021, the FTC
issued letters including a “Notice of Penalty Offenses Concerning Deceptive or Unfair Conduct in the Education Marketplace”
to 70 institutions. These letters were meant to place the recipients on actual notice of conduct the FTC previously found to violate
the Federal Trade Commission Act. This conduct included several categories of direct or implied misrepresentations made by proprietary
schools. These letters may reflect an increased interest by the FTC in monitoring the for-profit proprietary school sector. If our institutions
fail to comply with an FTC statute or rule or are found to have committed misconduct of which they had actual notice the FTC had previously
determined to be unfair or deceptive, our institutions could face civil penalties, injunctions, or other remedies available to the FTC.

School
Acquisitions. When a company acquires an institution that is eligible to participate in the Title IV Programs, the acquisition
generally will result in the institution undergoing a change of ownership resulting in a change of control as defined by ED and under
the rules of other agencies and accreditors. Upon such a change, an institution’s eligibility to participate in the Title IV Programs
is generally suspended until it has applied for recertification by ED as an eligible school under its new ownership, which requires that
the school also re-establish its state authorization and accreditation. ED may temporarily and provisionally certify an institution seeking
approval of a change of control under certain circumstances while ED reviews the institution’s application. The temporary provisional
certification typically remains in effect on a month-to-month basis during ED’s review of the application as long as the school
timely submits certain documentation during the course of ED’s review. ED’s current proposed regulatory agenda includes an
intent to address certain issues including change of ownership requirements. We cannot predict how ED will address these requirements
or the impact the changes to change of ownership requirements may have on our schools.

29

The
time required for ED to act on such an application may vary substantially. ED recertification of an institution following a change of
control will be on a provisional basis if ED approves the institution’s application and could contain restrictions or conditions
depending on the outcome of its review of the institution including its administrative capability and financial stability. Under ED regulations
that took effect July 1, 2023, the institutions must submit certain information and documentation at least 90 days in advance of the
change in ownership including, for example, notice to current and prospective students of the planned change in ownership. The approval
processes for state and accrediting agencies vary in scope and timing with some agencies requiring approval prior to the acquisition
and others not conducting their review until after the acquisition has taken place. Thus, any plans to expand our business through acquisition
of additional schools and have them certified by ED to participate in the Title IV Programs will be subject to the timing and outcome
of the application, review and approval processes and requirements of ED and the relevant state education agencies and accreditors and
could be impacted by any conditions or restrictions imposed by ED or other agencies on the institution under our ownership.

On
June 29, 2026, ED confirmed Integrity remains an eligible institution that
qualifies to participate in the Title IV Programs and issued a provisional program participation agreement to Integrity, which will remain
in effect until March 31, 2029.

Legacy
Education Antioch, LLC, a wholly-owned subsidiary of Legacy LLC (as defined herein) (the “Buyer”) entered into an Asset
Purchase Agreement (“APA”) with Legacy Education Inc., Legacy Education, LLC, a wholly-owned subsidiary of the Company
(“Legacy LLC” and together with the Company and the Buyer, the “Buyer Parties”), CCMCC, Contra Costa Medical
Career College Online, Inc. (“CCMCC Online” and together with CCMCC, “Sellers”) and, solely with respect to
certain portions of the APA, Stacey Orozco and Bulmaro Orozco, the sole owners of CCMCC and CCMCC Online (the “CCMCC
Transaction”). The CCMCC Transaction was consummated on December 18, 2024.

When
a company acquires an institution that is eligible to participate in the Title IV Programs, like CCMCC, the acquisition generally will
result in the institution undergoing a change of ownership resulting in a change of control as defined by ED and under the rules of other
educational agencies and accreditors. Upon such a change, an institution’s eligibility to participate in the Title IV Programs
is generally suspended until it has applied for recertification by ED as an eligible school under its new ownership, which requires that
the school also re-establish its state authorization and accreditation. ED may temporarily and provisionally certify an institution seeking
approval of a change of control under certain circumstances while ED reviews the institution’s application. The temporary provisional
certification typically remains in effect on a month-to-month basis during ED’s review of the application as long as the school
timely submits certain documentation during the course of ED’s review. Legacy timely submitted a materially complete change in
ownership application to ED and CCMCC is now a party to a temporary provisional program participation agreement (“TPPPA”)
that allows CCMCC to continue participating in the Title IV Programs. CCMCC also timely filed the required documentation for the TPPPA
to remain in effect during ED’s review of the change of ownership. On March 11, 2025, CCMCC provided additional financial information
requested by ED.

CCMCC’s
TPPPA contains conditions on its participation in the Title IV Programs that are typically imposed by ED when a change of ownership occurs.
These conditions include restrictions on growth (e.g., the addition of new programs and locations, increase in credential level, change
in program length), bi-weekly and monthly financial reporting, and a reporting requirement related to certain types of student complaints.
If CCMCC does not timely comply with these reporting requirements, or its reports contain information of concern to ED, ED may request
further information from CCMCC or the Company or take action against CCMCC or the Company.

30

We
cannot predict the timing or outcome of ED’s review of the change of ownership of CCMCC. The time required for ED to act on such
an application for approval of a change of ownership resulting in a change of control may vary substantially. ED recertification of an
institution following a change of control will be on a provisional basis if ED approves the institution’s application and could
contain restrictions or conditions depending on the outcome of its review of the institution under the new ownership including its administrative
capability and financial stability.

The
approval processes for state and accrediting agencies vary in scope and timing with some agencies requiring approval prior to the acquisition
and others not conducting their review until after the acquisition has taken place. With regard to the agencies that accredit CCMCC and
CCMCC Online, authorize them to operate in the state of California, or approve their programs:

●
California
Bureau for Private Postsecondary Education (“BPPE”): Institutions that are licensed by BPPE by means of accreditation,
like CCMCC, are required to notify BPPE of the change within 30 days of the change and demonstrate that the substantive change was
made in accordance with the institution’s accreditation standards. CCMCC submitted an Application for a Change of Business
Organization/Control/Ownership to BPPE on January 16, 2025 which included ACCET’s approval of the change of ownership. By letter
dated January 31, 2025, BPPE approved CCMCC to operate under its new ownership.

●
Accrediting
Council for Continuing Education and Training (“ACCET”): ACCET accreditation standards require that institutions
undergoing a change in ownership or control submit notice at least ten days prior to a prospective agreement for the change. ACCET
also requires submission of an application for approval of the change in ownership or control within ten days following the change.
CCMCC submitted the application on December 27, 2024. By letter dated January 15, 2025, ACCET provisionally reinstated CCMCC’s
accreditation following the change in ownership, and by letter dated September 4, 2025, ACCET granted final approval of the change
of ownership.

●
California
State Approving Agency for Veterans Education (“CSAAVE”): CSAAVE requires approved institutions to make a post-change
submission to CSAAVE for approval of the change when there has been a material change to the institution’s current approval.
CCMCC provided notice to CSAAVE of the change on November 12, 2024, and submitted the change of ownership forms. On April 28, 2025,
CCMCC provided additional information to CSAAVE regarding its reapproval and on May 1, 2025, CSAAVE approved the application.

●
Accreditation
Bureau of Health Education Schools (“ABHES”): ABHES requires institutions that hold ABHES programmatic accreditation
to notify it of any change in organizational oversight or legal structure, and to submit a completed application for change in legal
status, ownership, or control within five days after the change. CCMCC submitted the application on December 23, 2024. By letter
dated January 29, 2025, ABHES approved the change in ownership.

●
California
Board of Vocational Nursing and Psychiatric Technicians (“BVNPT”): BVNPT instructed CCMCC to submit formal notification
of the change of ownership after receiving BVNPT’s approval to admit a new class of students. CCMCC received such approval
on February 4, 2025 and submitted the required form for the change of ownership on February 12, 2025. BVNPT verified it had received
notice of the change of ownership on July 17, 2025.

●
California
Department of Public Health, Laboratory Field Services (“CDPH”): CDPH requires certain training programs undergoing
a change of ownership to notify CDPH within 30 days after the change has occurred and submit a new application package. CCMCC
notified CDPH of the change and submitted the application on February 6, 2025. CDPH approved the application, and the approval is
valid through January 2027. CCMCC is in the process of submitting its next renewal application.

31

If
agencies require us to obtain other approvals in connection with the CCMCC Transaction, we will be required to undergo an application
process for approvals from the applicable agencies and could be subject to conditions or restrictions (or loss of approval) depending
on the outcome of the approval process. If any applicable agencies determine that we did not follow required procedures in providing
notification and seeking approval of the CCMCC Transaction, or if any agencies do not approve the CCMCC Transaction, we could be subject
to sanctions by the applicable agencies including loss of CCMCC’s approvals from these agencies.

Change
of Control. In addition to school acquisitions, other types of transactions can also cause a change of control. ED, most of our
state education agencies, our accreditors, and other regulators have standards pertaining to the change of control of schools, but these
standards are not uniform. ED regulations describe some transactions that constitute a change of control, including the transfer of a
controlling interest in the voting stock of an institution or the institution’s parent corporation including our Company. A significant
purchase or disposition of our common stock could be determined by ED to be a change of control under this standard. On October 28, 2022,
ED published a final rule revising its change in ownership regulations, which became effective July 1, 2023. The new requirements, such
as requiring notice to ED and current and prospective students at least 90 days prior to a change in ownership, could make it more difficult
to execute a change in ownership or an acquisition, which could make it less desirable to acquire an ownership interest in our Company,
or which could result in conditions or restrictions as a result of a transaction involving us or an acquired institution. In addition,
ED’s revisions to its financial responsibility standards published on October 31, 2023 and effective July 1, 2024 impose additional
financial tests, and potentially additional letter of credit requirements, related to changes in ownership.

Most
of our state education agencies, our accreditors, and other regulators include the sale of a controlling interest of common stock in
the definition of a change of control although some agencies could determine that the sale or disposition of a smaller interest would
result in a change of control. A change of control under the definition of one of these agencies would require the affected school to
reaffirm its state authorization, accreditation, or other approval. Some agencies would require approval prior to a sale or disposition
that would result in a change of control in order to maintain authorization or accreditation. The requirements to obtain such reaffirmation
from the states and our accreditors vary widely.

ED
requires institutions to periodically report changes in ownership even when a change does not result in a change in control or require
ED approval. While ED’s regulations require reporting of owners holding at least a five percent ownership interest (as well as
changes representing at least 5% but under 25% on a quarterly basis or sooner if the institution plans to undergo a change in ownership),
the recently implemented overhaul of ED’s electronic application system through which institutions report ownership requests a
disclosure of all owners regardless of their ownership percentage. The new electronic application also requests granular detail about
reported owners. We may not have access to contemporaneous ownership information given the day-to-day fluctuations of trading on the
public market. Access to information regarding Non-Objecting Beneficial Owners is expensive and this information is typically not current
by the time obtained. Moreover, we cannot predict whether investors will timely report investments such that we could access accurate
beneficial ownership information and even if investors do comply with reporting requirements, certain passive investors would not typically
be reported until 45 days following our fiscal year end. We are as yet uncertain regarding our ability to timely obtain ownership information
and timely report this information to ED. Failure to timely report ownership changes could result in adverse action by ED, or conditions
or restrictions imposed by ED on one or more of our institutions.

Our
institutions may encounter difficulty timely identifying and reporting to ED on the electronic application for each of our institutions’
several hundred owners. CCMCC may also encounter additional difficulty reporting ownership given ED has not yet approved the prior change
in control of CCMCC and, as a result, we could encounter difficulty obtaining access to the electronic application. ED has informed us
that it only will require us to report owners with a five percent or greater ownership interest in the Company although this guidance
could change in the future and we could encounter difficulty identifying and timely reporting owners under current or future ED guidance.
Our institutions will also be required to timely report any additional changes to ownership percentages and given the frequency such
changes can occur for a publicly traded company, we may have difficulty timely complying with ED’s reporting requirements. These
difficulties could result in adverse action by ED, or conditions or restrictions imposed by ED on one or more of our institutions.

If
we decide to issue preferred stock or additional common stock in the future, this issuance could result in a change in ownership or control
requiring regulatory approval. ED considers both control rights and beneficial ownership interest among other factors when evaluating
whether a change in ownership resulting in a change in control has occurred. Similarly, changes to our board of directors or the right
to appoint directors could result in a change in ownership or control requiring regulatory approval.

32

We
have verified that most of our education regulators and accreditors did not treat the Company’s initial public offering that occurred
in 2024 as a change in ownership or control requiring agency approval. If agencies require us to obtain approvals in connection with
the initial public offering, we will be required to undergo an application process for approvals from the applicable agencies and could
be subject to conditions or restrictions depending on the outcome of the approval process. If an agency notified us that we moved forward
with the initial public offering without making or obtaining required pre-closing notices and approvals prior to the initial public offering,
we could be subject to sanctions by the applicable agencies including loss of our approvals from these agencies. On July 30, 2024, ED
provided written confirmation the initial public offering as described would not constitute a change of control under its regulations.
However, subsequent offerings, transactions or other events could be deemed to be a change of control in the future.

With
regard to the agencies that institutionally accredit our institutions or authorize them to operate in the state of California:

●
BPPE:
BPPE regulations require that institutions that are authorized based on their accredited status and which undergo a change in ownership
timely submit notice of such change with accompanying documentation to demonstrate that the change was made in accordance with the
applicable accreditation standards. On August 8, 2024, BPPE responded to our request for guidance regarding a potential change of
ownership process and stated that it would look to the determinations of ABHES and ACCET with respect to the initial public offering.
As described below, ABHES and ACCET have provided written confirmation that the initial public offering as described would not constitute
a change in legal status, ownership or control under the respective standards. Based on those responses from ABHES and ACCET, we
sought confirmation that our institutions need not undergo an approval process with BPPE prior to the offering, and BPPE confirmed
on September 11, 2024 that the initial public offering would not be viewed as a change in control and would not require approval
from BPPE.

●
ABHES:
ABHES accreditation standards require that institutions undergoing a change in legal status, ownership or control submit an application
for approval of the change at least 90 days in advance, and that ABHES must approve the change before it takes place. ABHES accreditation
standards also require institutions undergoing a change in legal status, ownership or control to submit an additional application
within five days after the change, which would also be subject to ABHES approval. We requested guidance from ABHES regarding whether
the initial public offering as described will constitute a change in legal status, ownership or control for the purposes of its
accreditation standards. On August 12, 2024, ABHES provided written confirmation that the initial public offering as described would
not constitute a change in legal status, ownership or control under its standards.

●
ACCET:
ACCET accreditation standards require that institutions undergoing a change in ownership or control submit a notice at least ten
days prior to such a change, and further submit an application for approval of such a change within ten days following the change.
We requested guidance from ACCET regarding whether the initial public offering as described will constitute a change in ownership
or control under its accreditation standards and confirmation no approval would be required from ACCET. On September 6, 2024, ACCET
provided written confirmation that the initial public offering as described would not constitute a change in ownership or control
under its standards.

The
California Board of Registered Nursing requires pre-closing approval of a change of ownership before it occurs and requires post-closing
approval of a change in organizational structure. We requested confirmation from the California Board of Registered Nursing that the
initial public offering as described will not be treated as a change in ownership that requires approval before the offering occurs,
but have not received a determination from the agency. If the California Board of Registered Nursing determines we were required to obtain
the agency’s approval prior to the initial public offering under its statutes, rules or standards, then, as noted above, we could
be subject to sanctions by this agency including potential loss of our approval.

33

A
change of control could occur as a result of future transactions in which the Company or our institutions are involved. Some corporate
reorganizations and some changes in the board of directors of the Company are examples of such transactions. ED regulations provide that
a change of control of a publicly traded corporation also could occur in one of at least two ways: (a) if a person acquires ownership
and control of the corporation so that the corporation is required to file a Current Report on Form 8-K with the Securities and Exchange
Commission disclosing the change of control or (b) if the corporation has a shareholder that owns at least 25% of the total outstanding
voting stock of the corporation and is the largest shareholder of the corporation, and that shareholder ceases to own at least 25% of
such stock or ceases to be the largest shareholder. These standards are subject to interpretation by ED.

Moreover,
the potential adverse effects of a change of control could influence future decisions by us and our stockholders regarding the sale,
purchase, transfer, issuance or redemption of our stock. In addition, the adverse regulatory effect of a change of control also could
discourage bids for shares of our common stock and could have an adverse effect on the market price of our shares.

Opening
Additional Campuses and Adding Educational Programs. For-profit educational institutions must be authorized by their state
education agencies and be fully operational for two years before applying to ED to participate in the Title IV Programs. However, an
institution that is certified to participate in the Title IV Programs may establish an additional location and apply to participate
in the Title IV Programs at that location without reference to the two-year requirement, if such additional location satisfies all
other applicable ED eligibility requirements. Our expansion plans are based, in part, on our ability to open new schools as
additional locations of our existing institutions and are dependent upon ED’s timely review and approval of new campuses. CCC
plans to open a new additional location in Houston, Texas and is in the process of seeking requisite educational agency approvals.
CCC submitted its application to ACCET for approval of the Houston location on September 17, 2026, and the application is under
review. Effective July 1, 2024, ED has discretion to condition the participation of provisionally certified schools by restricting
or limiting the addition of new programs or locations. If ED chose to impose such a condition on one or more of our institutions,
that could negatively impact our expansion plans.

A
student may use Title IV Program funds only to pay the costs associated with enrollment in an eligible educational program offered by
an institution participating in Title IV Programs. Generally, unless otherwise required by ED or regulation, an institution that is eligible
to participate in Title IV Programs may add a new educational program without ED approval. Institutions that are provisionally certified
may be required to obtain approval of certain educational programs. Our Integrity and CCMCC institutions are provisionally certified
and required to obtain prior ED approval of new locations and educational programs. If an institution erroneously determines that an
educational program is eligible for purposes of the Title IV Programs, the institution would likely be liable for repayment of Title
IV Program funds provided to students in that educational program. Our expansion plans are based, in part, on our ability to add new
educational programs at our existing schools and make periodic updates to our programs.

In
addition to ED, some of the state education agencies and our accreditors also have requirements that may affect our schools’ ability
to open a new campus, establish an additional location of an existing institution or add or change educational programs. Approval by
these agencies may be conditioned, delayed or denied and could be negatively impacted due to regulatory inquiries or reviews and any
adverse publicity relating to such matters or the industry generally.

Administrative
Capability. ED assesses the administrative capability of each institution that participates in the Title IV Programs under a
series of separate standards. Failure to satisfy any of the standards may lead ED to find the institution ineligible to participate in
the Title IV Programs or to place the institution on provisional certification as a condition of its participation and potentially impose
fines or other sanctions. On October 31, 2023, ED published new regulations revising and expanding its administrative capability standards.
Those revisions, effective July 1, 2024, modified the criteria for administrative capability such that they now include, among other
things, that the institution:

●
comply
with all applicable federal student financial aid requirements;

●
have
capable and sufficient personnel to administer the Title IV Programs;

●
administer
the Title IV Programs with adequate checks and balances in its system of internal controls over financial reporting;

●
divide
the function of authorizing and disbursing or delivering Title IV Program funds so that no office has the responsibility for both
functions;

34

●
establish
and maintain records required under the Title IV Program regulations;

●
develop
and apply an adequate system to identify and resolve discrepancies in information from sources regarding a student’s application
for financial aid under the Title IV Programs;

●
have
acceptable methods of defining and measuring the satisfactory academic progress of its students;

●
refer
to the Office of the Inspector General any credible information indicating that any applicant, student, employee, third party servicer
or other agent of the school has been engaged in any fraud or other illegal conduct involving the Title IV Programs;

●
not
be, and not have any principal or affiliate who is, debarred or suspended from federal contracting or engaging in activity that is
cause for debarment or suspension;

●
provide
adequate financial aid counseling to its students;

●
submit
in a timely manner all reports and financial statements required by the Title IV Program regulations;

●
provide
adequate career services and geographically accessible clinical or externship opportunities to its students;

●
disburse
funds to students in a timely manner that best meets their needs;

●
does
not have educational programs that “fail” accountability measures and that represent 50 percent or more of its
total receipts under the Title IV Programs in the most recent award year;

●
does
not engage in substantial misrepresentations or aggressive and deceptive recruitment tactics; and

●
not
otherwise appear to lack administrative capability.

Failure
by us to satisfy any of these or other administrative capability criteria could cause our institutions to be subject to sanctions or
other actions by ED or to lose eligibility to participate in the Title IV Programs, which would have a significant impact on our business
and results of operations.

Based
on the Company’s fiscal year end, our annual compliance audits and audited financial statements were due to ED on December 31,
2025. Due to issues with ED’s systems which the Company raised to ED prior to the submission deadline, our institutions were
unable to access the eZ-Audit portal to upload the annual audit submissions to ED. As such, ED could conclude that the annual audit
submissions were not filed timely as required and impose sanctions (which we would have the opportunity to appeal). However, we
provided the entirety of the annual audit submissions to ED by electronic mail by the required deadline such that ED did receive the
required annual audit submissions on a timely basis via alternative means, and we subsequently uploaded the HDMC, CCC, CCMCC, and
Integrity audit submissions to the eZ-Audit portal.

ED’s
current proposed regulatory agenda includes an intent to address certain issues including administrative capability requirements. We
cannot predict whether ED intends to address these requirements through negotiated rulemaking, published guidance, or other actions,
nor can we predict the impact on our institutions of any changes that might occur to the administrative capability requirements. We are
continuing to monitor developments on this topic.

Restrictions
on Payment of Commissions, Bonuses and Other Incentive Payments. An institution participating in the Title IV Programs may not
provide any commission, bonus or other incentive payment based directly or indirectly on success in securing enrollments or financial
aid to any person or entity engaged in any student recruiting or admission activities or in making decisions regarding the awarding of
Title IV Program funds. This statutory prohibition under the HEA, and as implemented by ED, applies to all institutional employees and
service providers who are engaged in or responsible for any student recruitment or admission activity or making decisions regarding the
award of financial aid. We cannot predict how ED will interpret and enforce the incentive compensation prohibition.

35

The
prohibition on incentive compensation has had and will continue to have a significant impact on the productivity of our employees, on
the retention of our employees and on our business and results of operations. Failure to comply with the incentive compensation prohibition
could result in loss of an institution’s certification to participate in the Title IV Programs, limitations on Title IV Program
participation or financial penalties.

Compliance
Reviews Regarding Compliance with Regulatory Standards and Effect of Regulatory Violations. Because we operate in a highly regulated
industry, we are subject to compliance reviews and audits as well as claims of noncompliance and lawsuits by government agencies, regulatory
agencies and third parties. Our institutions are subject to audits, program reviews, site visits, and other reviews by various federal
and state regulatory agencies, including, but not limited to, ED, ED’s Office of Inspector General, state education agencies and
other state regulators, the U.S. Department of Veterans Affairs and other federal agencies, and by our accrediting agencies. In addition,
each of our institutions must retain an independent certified public accountant to conduct an annual audit of the institution’s
administration of Title IV Program funds. Each of our institutions must submit the resulting audit report to ED for review.

If
one of our institutions fails to comply with accrediting or state licensing requirements, such school and its main and/or branch campuses
and educational programs could be subject to the loss of state licensure or accreditation, which in turn could result in a loss of eligibility
to participate in the Title IV Programs. If ED or another agency determined that one of our institutions improperly disbursed Title IV
Program funds or other financial assistance funds or violated a provision of the HEA or ED regulations, the institution could be required
to repay such funds and related costs to ED or other agencies, and could be assessed an administrative fine or subject to other sanctions
including loss of eligibility to participate in the impacted financial assistance program. ED could also place the institution on provisional
certification status and/or transfer the institution to the reimbursement or cash monitoring system of receiving Title IV Program funds,
under which an institution must disburse its own funds to students and document the students’ eligibility for Title IV Program
funds before receiving such funds from ED. It could also impose letters of credit, restrict participation, or take actions such as suspensions
or emergency action.

Significant
violations of Title IV Program requirements by us or any of our institutions could be the basis for ED to limit, suspend, terminate,
revoke, or decline to renew the participation of the affected institution in the Title IV Programs or to seek civil or criminal penalties.
We and our institutions are also subject to claims and lawsuits relating to regulatory compliance brought not only by federal and state
regulatory agencies and our accrediting bodies, but also by third parties, such as present or former students or employees and other
members of the public.

If
the result of any pending or future review, audit, proceeding, lawsuit or investigation is unfavorable to us, we may be required to pay
money damages or be subject to fines, limitations, conditions, loss of Title IV Program funding, loss of accreditation or state authorization,
injunctions or other penalties which could impact our results of operations. Even if we adequately address issues raised by an agency
review or successfully defend a lawsuit or claim, we may have to divert significant financial and management resources from our ongoing
business operations to address issues raised by those actions. Claims and lawsuits brought against us may damage our reputation or adversely
affect our stock price, even if such actions are eventually determined to be without merit. See “Risk Factor - Government and
regulatory agencies and third parties may conduct compliance reviews and audits or bring actions against us that could result in monetary
liabilities, injunctions, loss of eligibility for Title IV Programs or other adverse outcomes.”

Financial
Aid Fraud Detection. Institutions must detect and prevent financial aid fraud attempts. For example, ED requires institutions
to maintain systems to identify conflicting information that affects a student’s eligibility for financial aid and resolve it before
disbursing aid. ED also requires institutions to report suspicions of fraud to ED’s Office of the Inspector General. On July 17,
2026, ED published guidance regarding its real-time FAFSA fraud detection process, which reminded institutions that they have a fiduciary
responsibility for ensuring Title IV funds are disbursed only to eligible students and are responsible for improper payments even in
cases of fraud. If our efforts to detect and prevent financial aid fraud are unsuccessful or found to be deficient, it could lead to
a finding of noncompliance with Title IV requirements, accreditation standards, or other agencies, and could result in liabilities, loss
of accreditation or Title IV eligibility, as well as third-party claims.

36

Other
Financial Assistance Programs. Some of our students receive financial aid from federal sources other than the Title IV Programs,
such as programs administered by the U.S. Department of Veterans Affairs and under the Workforce Innovation and Opportunity Act (“WIOA”).
In addition, some of our students receive state financial aid in the form of grants, loans or scholarships. The eligibility and compliance
requirements for these federal and state financial aid programs are extensive and vary among the funding agencies and by program. Our
failure to comply with legal requirements applicable to federal and state financial assistance programs could result in repayment liabilities,
sanctions, or loss of eligibility to participate in those programs which could impact our results of operations and also impact our compliance
with ED’s 90/10 Rule which requires our institutions to generate revenues from sources other than the Title IV Programs and other
federal financial assistance.

States
that provide financial aid to our students face budgetary constraints, which in certain instances have reduced the level of state financial
aid available to our students. Due to state budgetary shortfalls and constraints in certain states in which we operate, the overall level
of state financial aid for our students could decrease in the near term, but we cannot predict how significant any such reductions will
be or how long they will last. Federal budgetary shortfalls and constraints, or decisions by federal lawmakers to limit or prohibit access
by our institutions or their students to federal financial aid, could result in a decrease in the level of federal financial aid for
our students. Moreover, our failure to comply with legal requirements applicable to federal and state financial assistance programs could
result in repayment liabilities, sanctions, or loss of eligibility to participate in those programs which could impact our results of
operations.

Under
the WIOA, institutions currently must report data regarding credential attainment rates, job placement rates, and other information and
may be required to meet negotiated performance goals set by the state agency administering WIOA funds. Members of Congress have made
proposals to reauthorize WIOA but no reauthorization bills have been passed. If passed, proposals to reauthorize WIOA that increase requirements
or impose penalties could impact our schools.

If
our participating institutions and their programs were to not meet other WIOA requirements, they would risk losing eligibility to participate
in the program. Further, reauthorization of the WIOA could result in changes to the process for determining funding for its programs,
which could affect our institutions’ revenues.

In
addition to the Title IV Programs and other government-administered programs, all of our schools participate in alternative loan programs
for their students. Alternative loans fill the gap between what the student receives from all financial aid sources and what the student
may need to cover the full cost of his or her education. We also extend credit for tuition and fees to many of our students that attend
our campuses. We are required to comply with applicable federal and state laws related to certain consumer and educational loans and
credit extensions and education financing and are subject to review by federal and state agencies responsible for overseeing compliance
with these requirements. Our failure to comply with these requirements could result in repayment liabilities, sanctions, investigations
or litigation which could impact our results of operations.

On
January 20, 2022, the CFPB announced its intent to examine the operations of postsecondary schools that extend private loans directly
to students. Accompanying this announcement was an update to the CFPB’s Examination Procedures to now require CFPB examiners to
review several aspects of educational loans including enrollment restrictions, withholding transcripts, improper accelerated payments,
failure to issue refunds, and improper lending relationships. In September 2023, the CFPB published a report indicating concerns with
tuition payment plans, including coercive debt collection practices, high fees, and confusing consumer disclosures. In May 2025, the
CFPB indicated it would deprioritize regulation of student loans. Failure to comply with applicable laws and requirements could result
in repayment liabilities, sanctions, investigations or litigation which could impact our operations. If the CFPB prioritizes regulation
of student loans in the future, the likelihood of these results would increase.

Programs
and Curricula

High
Desert Medical College

HDMC’s
academic offerings are designed to prepare its graduates for challenging and rewarding careers in high-growth fields. We believe that
HDMC’s hands-on approach and flexible scheduling options provide students with a practical learning experience that fits into their
busy lives.

HDMC’s
approach allows students to learn through a mix of lecture, laboratory and externship experiences, in addition to assigned homework.
This allows students to practice what they learn and accommodates different learning styles.

37

HDMC
offers start dates throughout the year for its various programs, across the three campuses. The programs currently offered as of June
30, 2026 are as follows:

Current
Programs Offered

Area of Study
Program
Program Length

Estimated Total

Fees, Charges and

Expenses

Ultrasound Technician
Associate of Applied Science
108-123 weeks
$ 60,894

Vocational Nursing AAS
Associate of Applied Science
93-115 weeks
$ 20,327

Associate Degree Nursing
Associate Degree
96 weeks
$ 92,235

Cardiac Sonography
Associate of Applied Science
115 weeks
$ 60,894

Surgical Technology
Associate of Applied Science
62 weeks
$ 36,370

Ultrasound Technician
Diploma
84-99 weeks
$ 53,250

Clinical Medical Assisting
Certificate
34-42 weeks
$ 19,920

Dental Assisting
Certificate
34-42 weeks
$ 19,920

Medical Administrative Assisting
Certificate
15 weeks
$ 8,132

Medical Billing and Coding
Certificate
35-43 weeks
$ 19,920

Pharmacy Technician
Certificate
34-42 weeks
$ 20,121

Veterinary Assistant
Certificate
35-42 weeks
$ 19,920

Sterile Processing Technician
Certificate
32 weeks
$ 15,833

Vocational Nursing
Diploma
61-84 weeks
$ 36,370

Phlebotomy Technician
Course (Avocational)
5 weeks
$ 1,972

Magnetic Resonance Imaging
Associate of Applied Science
115 weeks
$ 61,773

Nursing Assistant
Certificate
9 weeks
$ 3,353

Pit and Fissure Sealant
Course (Avocational)
16 hours/2 days
$ 475

California Dental Practice Act
Course (Avocational)
2 hours
$ 99

Infection Control
Course (Avocational)
8 hours
$ 249

Radiation Safety
Course (Avocational)
32 hours/4 days
$ 449

Teaching Adult Learner - Strategies and Techniques for Nurses and Allied Health Program Educators
Course (Avocational)
30 hours
$ 115

Coronal Polishing
Course (Avocational)
12 hours/2 days
$ 325

Dispensary Agent Certification
Course (Avocational)
10 hours
$ 242

Vocational Nursing Pre-Requisite
Course (Avocational)
4 weeks
$ 850

LVN IV Therapy Certificate
Course (Avocational)
36 hours/4 days
$ 275

Emergency Medical Technician Certification
Certificate
12 weeks
$ 2,495

Degree
Program

Ultrasound
Technician Associate of Applied Science Degree Program

The
UT program is designed to prepare graduates for employment as an ultrasound technologist in the general abdomen, OB/GYN, small body parts
and vascular. The graduate can work in imaging centers, physician’s offices, clinics, mobile units or hospitals that do not require
a certification to be employed. The general education courses for the UT Associate of Applied Science Degree program are offered online
only using interactive distance learning. The core ultrasound principles and subjects are taught on campus. Certificate program graduates
can complete an UT Associate of Applied Science Degree remotely.

38

Cardiac
Sonography Associate of Applied Science Degree Program

The
Cardiac Sonography program is designed to prepare graduates for employment as a cardiac sonographer. The graduate can work in imaging
centers, physician’s offices, clinics, mobile units or hospitals that do not require a certification to be employed. The cardiac
sonographer plays a key role in today’s modern diagnosis and treatment team of cardiac disorders. The cardiac sonographer produces
two-dimensional ultrasonic recordings of the heart and related blood vessels using ultrasound equipment for use by physicians in diagnosing
certain cardiac diseases and malfunctions of the heart.

Magnetic
Resonance Imaging Associate of Applied Science Degree Program

The
Magnetic Resonance Imaging program is designed to prepare graduates for employment as an MRI technologist. MRI technologists specialize
in MRI scanners, and as part of the program, students utilize Corsmed technology to simulate everything that happens within the MRI scanner,
offering state of the art educational modules that complement students’ training by providing remote hands-on ultrasound training,
real-patient scanning cases and pathologies, didactic instruction, and assessment.

Surgical
Technology Associate of Applied Science Degree Program

The
Surgical Technology program is designed to prepare students to enter a medical career in the healthcare industry. Surgical Technologists
work to provide quality patient care through functioning in a sterile environment and assisting physicians in operating rooms for procedures
performed in hospitals, outpatient surgery centers, physician’s offices and other medical facilities.

Vocational
Nursing Associate of Applied Science Degree Program

The
VN AAS degree program builds on the Vocational Nursing Diploma by adding the same online general education and science courses required
for graduates of the pre-licensure Associate Degree Registered Nursing program. The goal of this post-licensure program is to educate
and develop VNs such that they become more well-rounded professionals through undergraduate general education. It is anticipated that
graduates will have enhanced critical thinking skills, science knowledge, and verbal/written communication skills which will expand employment
opportunities.

Associate
Degree of Nursing

The
High Desert Medical College Associate Degree of Nursing Program (ADN) provides students with a high-quality education in a dynamic, supportive
and engaging environment. The nursing curriculum at High Desert Medical College prepares the student to become a Registered Nurse with
an associate degree. The program promotes a culture of educational excellence among a diverse student population in collaboration with
healthcare partners that leads to an associate degree in nursing licensure. An entry-level professional with the ability to utilize the
latest healthcare technology while utilizing current evidence-based practice and clinical reasoning. The acquisition of the knowledge,
skills and attitudes to provide safe patient-centered care that meets the changing health care needs of diverse individuals, families,
communities and desire for life-long learning. The program strives to foster a commitment to individual excellence, integrity, lifelong
learning and professional development within each graduate.

Diploma
Program

Ultrasound
Technician Diploma Program

The
UT program is designed to prepare graduates for employment as an ultrasound technologist in the general abdomen, OB/GYN, small body parts
and vascular. The graduate can work in imaging centers, physician’s offices, clinics, mobile units or hospitals that do not require
a certification to be employed.

Vocational
Nursing Diploma Program

The
VN program is designed to provide the student with the basic knowledge, skills and abilities to perform the duties of a VN in a health
care environment. The program is approved by the BVNPT as an accredited training program, the completion of which meets the minimum requirements
set forth as necessary for application to take the VN license examination.

39

Certificate
Programs

Clinical
Medical Assisting Certificate Program

The
clinical medical assisting program is designed to give graduates the knowledge and skills necessary to work as an entry-level medical
assistant in a healthcare setting.

Dental
Assisting Certificate Program

The
dental assisting program prepares the graduate for an entry-level position in a dental office. Graduates may find employment in dental
clinics as dental assistants. With additional training and/or experience, graduates may be eligible for the radiation safety exam and
receive radiation safety certificate or be eligible for the coronal polish exam. Graduates receive CPR and First Aid certification from
American Red Cross and a diploma in dental assisting.

Medical
Administrative Assisting Certificate Program

The
medical administrative assisting program prepares the graduate to enter the health professions fields as an administrative medical assistant
in various settings, including medical offices, hospitals, and medical clinics.

Medical
Billing and Coding Certificate Program

The
medical billing and coding program provides theory and clinical training geared to prepare the student for an entry level position in
a hospital, medical or dental office, and medical insurance/billing companies. Graduates receive CPR and First Aid certification from
American Red Cross and Diploma in medical billing and coding.

Sterile
Processing Technician Certificate Program

The
sterile processing technician program is designed to prepare students to enter a medical career and play a critical role in preventing
infection. Sterile processing technicians sterilize, clean, process, assemble, store, and distribute medical equipment and reusable surgical
instrumentation, utilizing infection control and safety practices during all phases of the process.

Nursing
Assistant Certificate Program

The
nursing assistant program is designed to prepare students to become practicing state certified nursing assistants in the State of California.
The course work will include safety, anatomy and physiology, nutrition, asepsis, patient care, body mechanics and rehabilitation and
restoration care. Students should expect two to three hours of homework per class.

Emergency
Medical Technician Certification Program

The
EMT program prepares entry-level healthcare professionals to manage emergencies. EMTs assess scenes, prioritize care, provide immediate
treatment, and coordinate patient transport. Graduates qualify to take the National Registry Emergency Medical Technician (NREMT) computerized
certification exam to obtain the National EMT Certification.

Pharmacy
Technician Certificate Program

The
pharmacy technician program is designed to provide students with the skills, knowledge and training for an entry-level position in retail,
hospitals or clinics or home health pharmacy settings or other positions in a pharmacy-related product/company. Graduates are encouraged
to seek certification from the State of California for a registration as a pharmacy technician and a national competency certification.

40

Avocational
Courses

Phlebotomy
Technician Course

The
phlebotomy technician course (Avocational) is designed for employees who currently work or have worked in the medical field and are seeking
additional skills/certifications to add to their portfolio. The profession of phlebotomy is taught through didactic, student laboratory,
and clinical experiences. The student will be trained to perform a variety of blood collection methods using proper techniques and precautions.

Pit
& Fissure Sealant Course

This
specialized course is designed for dental professionals in California seeking expertise in the application of pit and fissure sealants.
Participants will acquire in-depth knowledge and hands-on skills necessary for effective sealant placement, emphasizing California-specific
regulations and ethical considerations. The course aims to empower participants to integrate pit and fissure sealants into their preventive
dental care practices with confidence and compliance.

California
Dental Practice Act Course

This
course is presented pursuant to the Dental Board of California requirement that each licensee must take a minimum two-unit course in
California Dental Law during each two-year license renewal period. This course has been developed in accordance with the California Code
of Regulations Section 1600 to provide the most current information on California Dental Practice Act and is approved by the Dental Board
of California for two units. This coursework does not interpret or make comment upon the law, but presents a condensed version of the
State of California statutes which constitute the Dental Practice Act.

Infection
Control Course

This
course covers the definition and implementation of sterilization methods and guidelines. Including patient medical history, infection
control, prevention of contamination, and the use of personal protective equipment. In addition, verification of infection, disinfection,
care of treatment room, handling and disposal of hazardous waste, handling soiled instruments, hand pieces, burs, water and air syringes
are presented. This course has been developed in accordance with the California Code of Regulations Section 1005 to provide the most
current information on infection control practices and principles and is approved by the Dental Board of California.

Radiation
Safety Course

In
the state of California, a Dental Assistant must have their California Radiation Safety (x-ray) certificate to be permitted to take x-rays
in a dental office. In addition, all applicants for Registered Dental Assistant licensure must submit evidence of having completed an
approved radiation safety course. This course introduces the didactic and clinical application of x-ray safety, bisecting and parallel
techniques, film exposure, processing and mounting of non-digital x-rays, digital x-ray (Dexis) training, and evaluation of both digital
and non-digital dental x-rays. This course is approved by the Dental Board of California.

Teaching
Adult Learner -Strategies and Techniques for Nurses and Allied Health Program Educators

This
is a 30 hour continuing education course and approved for 30 continuing education units by the Board of Registered Nursing. In this
course, students learn how to use the newest educational methods to create a classroom that is suited for adult learners. This is a
10-module course with topics that include teaching theory and strategies, curriculum development and program
administration.

Vocational
Nursing Pre-Requisite

This
course is a pre-requisite requirement for admissions into the vocational nursing program. Students must successfully pass this course
with a 75% or higher. The course introduces the nursing student to critical thinking, basic arithmetic and medication dosage calculation
and normal anatomy and physiology, the interrelationships between structure and functions of human cells, tissues, and systems, and the
effects of disease on body systems and basic medical terminology as well as study techniques and strategies to ensure student success
throughout the program.

41

LVN
IV Therapy Certificate

The
course is designed to prepare licensed vocational nurses to start and superimpose intravenous fluid via primary or secondary infusion
lines and perform blood withdrawal. The course will cover psychological preparation of the patient based on the growth and developmental
stage, legal aspect in IV therapy and blood withdrawal, infection control, indications for IV therapy, types of venipuncture devices,
delivery systems, intravenous fluids, venipuncture sites, observation of the patient, regulation of the fluid flow, selection of equipment,
complications of IV therapy, methods of blood withdrawal, method selection, safety measures, universal precautions, complications and
preparation of withdrawal sites.

Coronal
Polishing Course

This
specialized course is designed for dental professionals in California seeking proficiency in coronal polishing procedures. Participants
will gain comprehensive knowledge and hands-on skills to perform effective coronal polishing, contributing to enhanced patient oral health
and aesthetic outcomes. The course emphasizes California-specific regulations and ethical considerations, ensuring participants can confidently
integrate coronal polishing into their dental practice.

Dispensary
Agent Certification

The
dispensary agent certification will help give students an understanding of the fundamentals needed to be successful in the rapidly emerging
cannabis industry. This course includes nine virtual modules, quizzes and a final exam covering everything from the plant’s history,
terminology and chemistry to the routes of administration and effects on the human body. Our instructors include entrepreneurs, activists,
health care providers and educators who have spent years building their careers in the cannabis space. This course is self-paced and
delivered online.

Central
Coast College

CCC’s
model is to provide intensive coursework and learning experiences in order to prepare its students to be ready for work in their desired
fields upon graduation. An emphasis is placed on practical instruction which enables graduates to succeed in their initial jobs after
graduation and successfully advance in their careers.

CCC
offers start dates throughout the year for its various programs. The programs currently offered as of June 30, 2026 are as follows:

Current
Programs Offered

Area of Study
Program
Program Length

Estimated Total

Fees, Charges

and Expenses

Medical Assisting
Certificate
46 weeks
$ 19,920

Medical Administrative Assistant
Certificate
48 weeks
$ 19,920

Nursing Assistant
Certificate
6 weeks
$ 3,353

Phlebotomy Technician
Course (Avocational)
12 weeks
$ 4,532

Veterinary Assistant
Certificate
38 weeks
$ 19,920

Veterinary Technology
Degree (Associate of Applied Science)
84 weeks
$ 41,427

Computer Specialist: Accounting
Certificate
48 weeks
$ 19,920

Ultrasound Technician
Diploma
84-99 weeks
$ 53,250

Cardiac Sonography
Associate of Applied Science
115 weeks
$ 60,894

Magnetic Resonance Imaging
Associate of Applied Science
115 weeks
$ 61,773

Vocational Nursing
Diploma
61-84 weeks
$ 36,370

Ultrasound Technician
Associate of Applied Science
108-123 weeks
$ 60,894

Surgical Technology
Associate of Applied Science
62 weeks
$ 36,370

Sterile Processing Technician
Certificate
32 weeks
$ 15,833

Dental Assisting
Certificate
34-42 weeks
$ 19,920

Pharmacy Technician
Certificate
18 weeks
$ 5,445

42

Healthcare
Career Training Programs

Medical
Assisting Certificate

The
medical assisting program teaches skills such as: medical terminology, medical office procedures, medical records keeping and electronic
medical records, patient vital signs, venipuncture and injections, use of laboratory equipment and use of EKGs.

Medical
Administrative Assistant Certificate

Completing
the medical administrative assistant program gives the student a comprehensive set of administrative skills needed to work in a medical
office. These include knowledge, skills and abilities in: medical terminology, medical office procedures, medical record keeping and
electronic medical records and medical insurance billing.

Nursing
Assistant Certificate

Nursing
assistant training is designed for those who seek entry-level employment in the healthcare field. The program prepares a student to take
the state licensing exam to become a certified nursing assistant. The nursing assistant program may also be a prerequisite for students
who need direct patient care experience as an admission requirement for a higher level healthcare program or for those who wish to test
their interest in healthcare as a career. Individuals might also consider the nursing assistant training if they are interested in working
in healthcare to support their education.

Phlebotomy
Technician Course

Phlebotomists
are allied health professionals who draw blood from patients for medical testing. The phlebotomy technician program is designed to prepare
students to take the phlebotomy exam and apply to become a practicing, certified phlebotomist in the State of California.

Veterinary
Assistant Certificate

The
veterinary assistant program is designed to give hands-on experience working with animals and to prepare the students to successfully
work alongside veterinarians and veterinary technicians in a variety of animal care settings. Classes are a combination of lecture, demonstration,
guided practice, lab and clinical hours. An externship is provided at the end of the program.

Veterinary
Technology Associate of Applied Science Degree Program

The
veterinary technology program offers an AAS degree. The Veterinary Technology program is the only CVTEA (Committee on Veterinary Technician
Education and Activities)-accredited program offered in Monterey, San Benito, Santa Cruz tri-county area. The veterinary technology program
consists of two academic years, with the first year completing veterinary assistant program and giving students the option of a second
year that fulfills the requirements for an AAS degree in veterinary technology. Graduates of the veterinary technology program are eligible
for state licensing as a registered veterinary technician after successfully passing the Veterinary Technician National Examination and
California State Veterinary Technician Examinations.

43

Ultrasound
Technician Diploma Program

The
UT program is designed to prepare graduates for employment as an ultrasound technologist in the general abdomen, OB/GYN, small body parts
and vascular. The graduate can work in imaging centers, physician’s offices, clinics, mobile units or hospitals that do not require
a certification to be employed.

Ultrasound
Technician Associate of Applied Science Degree Program

The
UT program is designed to prepare graduates for employment as an ultrasound technologist in the general abdomen, OB/GYN, small body parts
and vascular. The graduate can work in imaging centers, physician’s offices, clinics, mobile units or hospitals that do not require
a certification to be employed. The general education courses for the UT Associate of Applied Science Degree program are offered online
only using interactive distance learning. The core ultrasound principles and subjects are taught on campus. Certificate program graduates
can complete an UT Associate of Applied Science Degree remotely.

Cardiac
Sonography Associate of Applied Science Degree Program

The
Cardiac Sonography program is designed to prepare graduates for employment as a cardiac sonographer. The graduate can work in imaging
centers, physician’s offices, clinics, mobile units or hospitals that do not require a certification to be employed. The cardiac
sonographer plays a key role in today’s modern diagnosis and treatment team of cardiac disorders. The cardiac sonographer produces
two-dimensional ultrasonic recordings of the heart and related blood vessels using ultrasound equipment for use by physicians in diagnosing
certain cardiac diseases and malfunctions of the heart.

Magnetic
Resonance Imaging Associate of Applied Science Degree Program

The
Magnetic Resonance Imaging program is designed to prepare graduates for employment as an MRI technologist. MRI technologists specialize
in MRI scanners and as part of the program, students utilize Corsmed technology to simulate everything that happens within the MRI scanner,
offering state of the art educational modules that complement students’ training by providing remote hands-on ultrasound training,
real-patient scanning cases and pathologies, didactic instruction, and assessment.

Vocational
Nursing Diploma Program

The
vocational nursing program is designed to provide the student with the basic knowledge, skills and abilities to perform the duties of
a vocational nurse in a health care environment. The program is approved by the BVNPT as an accredited training program, the completion
of which meets the minimum requirements set forth as necessary for application to take the Vocational Nurse License examination.

Surgical
Technology Associate of Applied Science Degree Program

The
Surgical Technology program is designed to prepare students to enter a medical career in the healthcare industry. Surgical Technologists
work to provide quality patient care through functioning in a sterile environment and assisting physicians in operating rooms for procedures
performed in hospitals, outpatient surgery centers, physician’s offices and other medical facilities.

Sterile
Processing Technician Certificate Program

The
sterile processing technician program is designed to prepare students to enter a medical career and play a critical role in preventing
infection. Sterile processing technicians sterilize, clean, process, assemble, store, and distribute medical equipment and reusable surgical
instrumentation, utilizing infection control and safety practices during all phases of the process.

Dental
Assisting Certificate Program

The
dental assisting program prepares the graduate for an entry-level position in a dental office. Graduates may find employment in dental
clinics as dental assistants. With additional training and/or experience, graduates may be eligible for the radiation safety exam and
receive radiation safety certificate or be eligible for the coronal polish exam. Graduates receive CPR and First Aid certification from
American Red Cross and a diploma in dental assisting.

44

Pharmacy
Technician Certificate Program

The
pharmacy technician program is designed to provide students with the skills, knowledge and training for an entry-level position in retail,
hospitals or clinics or home health pharmacy settings or other positions in a pharmacy-related product/company. Graduates are encouraged
to seek certification from the State of California for a registration as a pharmacy technician and a national competency certification.

Business
Career Training Programs

Computer
Accounting Specialist Certificate Program

The
computer accounting specialist program is designed to prepare students for a career in which they would maintain and prepare records,
post details of transactions, and reconcile bank statements in both large and small businesses in many industries.

Integrity
College of Health

Integrity
offers start dates throughout the year for its various programs. The programs currently offered as of June 30, 2026, are as follows:

Current
Programs Offered

Area of Study
Program
Program Length

Estimated Total

Fees, Charges

and Expenses

Vocational Nursing
Diploma
61-84 weeks
$ 36,370

Medical Assisting
Certificate
34-42 weeks
$ 19,920

Diagnostic Medical Sonography
Diploma
84-99 weeks
$ 48,374

Medical Billing and Coding
Certificate
35-43 weeks
$ 19,920

Bachelor of Science in Nursing (RN to BSN)
BS Degree
46 weeks
$ 11,477

Veterinary Assistant
Certificate
35-43 weeks
$ 19,920

Sterile Processing Technician

Certificate

32 weeks
$ 15,833

Healthcare
Career Training Programs

Vocational
Nursing Diploma Program

The
VN program provides students with nursing skills for direct patient care. Graduates should be able to function as part of the interdisciplinary
healthcare team in selected healthcare settings with individuals, families and communities across the life span.

Medical
Assistant Certificate Program

The
medical assistant program is designed to prepare students for entry-level positions as a medical assistant in either clinical and/or
administrative capacity.

45

Medical
assistants are multi-skilled health professionals who perform a wide range of roles in physician’s offices and other health care
settings. Medical assistants may also be employed by medical centers, medical specialty clinics, insurance billing agencies, laboratories,
and emergency rooms.

Diagnostic
Medical Sonography Diploma Program

The
diagnostic medical sonography program is designed to prepare graduates for employment as an ultrasound technologist in the general abdomen,
OB/GYN, small body parts and vascular. The graduate can work in imaging centers, physician’s offices, clinics, mobile units or
hospitals that do not require a certification to be employed. The ultra-sonographer plays an important role in today’s modern diagnosis
and treatment team. Ultra-sonographer produces two-dimensional ultrasonic recordings of internal organs using ultrasound equipment for
use by physicians in diagnosing certain diseases and malfunctions of certain organs. The program includes a 960-hour externship.

Medical
Insurance Coding and Billing Specialist Certificate Program

The
medical insurance coding and billing program provides theory and clinical training geared to prepare the student for an entry level position
in a hospital, medical or dental office, and medical insurance/billing companies. The program provides all the necessary training to
enable the students to acquire the necessary skills and demonstrate competencies in a variety of medical office procedures and billing
and coding techniques. Instruction combines theory and practice to meet the competencies needed to be a medical biller and coder. Students
learn to prepare various health claim forms using medical billing software. In doing so, they acquire a working knowledge of human anatomy
and medical terminology, as well as comprehension of the legal, ethical and regulatory standards of medical records management. Students
learn to accurately interpret medical records, including diagnoses and procedures of health care providers, as well as to document and
code the information for submission to insurance companies. Graduates receive CPR and first aid certification from American Red Cross
and a diploma in medical billing and coding.

Bachelor
of Science in Nursing

The
RN–BSN degree program is designed for students who possess an associate degree and Diploma Registered Nurse license. The
blended or online method of delivery is offered for working nurses who require greater flexibility in the education schedule in
order to complete their Bachelor’s degree in nursing.

Veterinary
Assistant Certificate Program

The
veterinary assistant (VA) program is based on theory and clinical training geared to prepare the students for entry level as veterinary
assistants in veterinary offices, veterinary hospitals, research facilities, animal shelters, wildlife refuges and zoos. The veterinary
assistant program consists of five areas of training: career and personal development, clinical experience, anatomy and terminology,
veterinary assistant duties and species and breeds of animals commonly seen in veterinary clinics. The program provides knowledge of
veterinary front and back-office procedures to prepare the students to work under the supervision of a veterinarian or registered veterinary
technician.

Sterile
Processing Technician Certificate Program

The sterile processing technician program is designed to prepare students to enter a medical career and play a critical
role in preventing infection. Sterile processing technicians sterilize, clean, process, assemble, store, and distribute medical equipment
and reusable surgical instrumentation, utilizing infection control and safety practices during all phases of the process.

46

Contra
Costa Medical Career College

CCMCC
offers start dates throughout the year for its various programs. The programs currently offered as of June 30, 2026, are as follows:

Current
Programs Offered

Area of Study
Program
Program Length

Estimated Total

Fees, Charges

and Expenses

Surgical Technology
Associate of Applied Science
61 weeks
$ 35,311

Sterile Processing Technician
Diploma
28 weeks
$ 15,372

Diagnostic Medical Sonography
Certificate
72 weeks
$ 41,364

Medical Assisting with Phlebotomy
Certificate
35 weeks
$ 16,974

Dental Assisting
Certificate
43 weeks
$ 16,974

Vocational Nursing
Certificate
62-84 weeks
$ 35,311

Clinical Medical Assisting
Certificate
10-20 weeks
$ 6,942

Coronal Polishing
Course (Avocational)
16 hours
$ 525

Infection Control
Course (Avocational)
8 hours
$ 425

Dental Radiology
Course (Avocational)
2 weeks
$ 525

Pit and Fissure Sealant
Course (Avocational)
16 hours
$ 525

EKG/ECG Technician
Certificate
10 weeks
$ 3,688

Medical Administrative Assistant /Billing and Coding Specialist
Certificate
10 weeks
$ 7,895

Medical Assisting
Certificate
20 weeks
$ 11,202

Pharmacy Technician
Certificate
21 weeks
$ 6,011

Phlebotomy Technician
Course (Avocational)
4/5/10 weeks
$ 4,068

Healthcare
Career Training Programs

Associate
of Applied Science in Surgical Technology Degree Program

The
Surgical Technology program is designed to prepare students to enter a medical career in the healthcare industry. Surgical Technologists
work to provide quality patient care through functioning in a sterile environment and assisting physicians in operating rooms for procedures
performed in hospitals, outpatient surgery centers, physician’s offices and other medical facilities.

Sterile
Processing Technician Certificate Program

The
sterile processing technician program is designed to prepare students to enter a medical career and play a critical role in preventing
infection. Sterile processing technicians sterilize, clean, process, assemble, store, and distribute medical equipment and reusable surgical
instrumentation, utilizing infection control and safety practices during all phases of the process.

Diagnostic
Medical Sonography Diploma Program

The
diagnostic medical sonography program is designed to prepare graduates for employment as an ultrasound technologist in the general abdomen,
OB/GYN, small body parts and vascular. The graduate can work in imaging centers, physician’s offices, clinics, mobile units or
hospitals that do not require a certification to be employed. Students learn to use specialized equipment and are prepared for immediate
entry-level positions in the field through a combination of coursework, clinical labs, and access to the innovative Sonosim training
technology. Students also receive real-world on-the-job experience through clinical experience.

Medical
Assisting with Phlebotomy Certificate Program

The
medical assisting program with phlebotomy is designed to prepare students to work in essential positions in the field of healthcare.
Medical Assistants are critical allied healthcare workers, performing important administrative and clinical duties in the offices of
doctors, medical clinics, and hospitals.

Dental
Assisting Certificate Program

The
dental assisting program is designed to prepare students to enter a dental career in the healthcare industry. Dental Assistants work
closely with dentists to provide quality patient care, performing important administrative and clinical tasks to support dental offices.
Graduates may find employment in dental offices or clinics as dental assistants.

47

Vocational
Nursing Diploma Program

The
VN program provides students with nursing skills for direct patient care. Graduates should be able to function as part of the interdisciplinary
healthcare team in selected healthcare settings with individuals, families and communities across the life span.

Clinical
Medical Assisting Certificate Program

The
clinical medical assisting program is designed to prepare students for entry-level positions as a medical assistant in either clinical
and/or administrative capacity. Medical assistants are multi-skilled health professionals who perform a wide range of roles in physician’s
offices and other health care settings. Medical assistants may also be employed by medical centers, medical specialty clinics, insurance
billing agencies, laboratories, and emergency rooms.

Medical
Administrative Assistant /Billing and Coding Specialist Certificate Program

The
medical administrative assistant/medical billing and coding program is designed to prepare students to enter the healthcare industry.
Medical Administrative Assistant / Medical Billing and Coding Specialists are administrative healthcare professionals, performing critical
tasks in support of doctors and medical practices.

EKG/ECG
Technician Certificate Program

The
EKG/ECG Technician course trains students in performing and interpreting electrocardiograms to help diagnose heart and cardiovascular
conditions. It covers essential concepts like EKG basics, waveforms, rhythms, and lead patterns, as well as advanced topics such as 12-lead
EKGs, axis interpretation, heart muscle damage, and pacemaker monitoring.

Medical
Assisting Certificate Program

The
medical assisting program is designed to prepare students to work in essential positions in the field of healthcare. Medical Assistants
are critical allied healthcare workers, performing important administrative and clinical duties in the offices of doctors, medical clinics,
and hospitals.

Avocational
Courses

Pharmacy
Technician

The
pharmacy technician program is designed to prepare students for a pharmacy career in the healthcare industry. Pharmacy technicians are
responsible for helping licensed pharmacists, by assisting in measuring, mixing, counting, labeling, and recording the correct dosages
of prescription medications. Pharmacy Technicians are also responsible for establishing and maintaining patient record files, submitting
insurance claim forms, and managing prescription and over-the-counter medication inventories.

Coronal
Polishing Course

This
specialized course is designed for dental professionals in California seeking proficiency in coronal polishing procedures. Participants
will gain comprehensive knowledge and hands-on skills to perform effective coronal polishing, contributing to enhanced patient oral health
and aesthetic outcomes. The course emphasizes California-specific regulations and ethical considerations, ensuring participants can confidently
integrate coronal polishing into their dental practice.

Infection
Control Course

This
course covers the definition and implementation of sterilization methods and guidelines. Including patient medical history, infection
control, prevention of contamination, and the use of personal protective equipment. In addition, verification of infection, disinfection,
care of treatment room, handling and disposal of hazardous waste, handling soiled instruments, hand pieces, burs, water and air syringes
are presented. This course has been developed in accordance with the California Code of Regulations Section 1005 to provide the most
current information on infection control practices and principles and is approved by the Dental Board of California.

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Dental
Radiology Course

This
Dental Board of California approved course is for dental assistants wanting to learn the proper techniques of dental x-rays. Students
will receive full instructional training in radiation safety. The course includes conventional dental radiographs, processing, and mounting
films. Instruction in digital radiography is provided utilizing DEXIS.

Pit
& Fissure Sealant Course

This
specialized course is designed for dental professionals in California seeking expertise in the application of pit and fissure sealants.
Participants will acquire in-depth knowledge and hands-on skills necessary for effective sealant placement, emphasizing California-specific
regulations and ethical considerations. The course aims to empower participants to integrate pit and fissure sealants into their preventive
dental care practices with confidence and compliance.

Phlebotomy
Technician Course

Phlebotomists
are trained allied health professionals who draw blood from patients for medical testing. The Phlebotomy Technician course is designed
to supplement current healthcare experience and prepare students to become state-certified phlebotomists in the State of California.

Job
Placement

We
believe that assisting our graduates in securing employment after completing their program of study is critical to our ability to attract
high quality students and enhancing our reputation in the industry. Accordingly, we dedicate significant resources to maintaining an
effective graduate placement program. We provide placement assistance to all qualified graduates at no additional charge. Our institutions
work closely with local employers to ensure that we are training students with skills that employers need. Our placement department maintains
databases of potential employers throughout the country, allowing us to more effectively assist our graduates in securing employment
in their career field upon graduation. The placement department also assists with locating current job openings and scheduling interviews
for graduates in their career field through personal contact with employers, review and investigation of advertised openings and memberships
and attendance in local organizations to market our graduates to local employers. Throughout the year, we hold numerous job fairs at
our facilities where we provide the opportunity for our students to meet and interact with potential employers. In addition, all of our
programs (except for VN) have an externship as part of their course curriculum, which provides our students with opportunities to work
with employers prior to graduation. We also assist students with resume writing, interviewing and other job search skills.

Intellectual
Property

Intellectual
property is important to our business. We rely on a combination of copyrights, trademarks, service marks, trade secrets, domain names
and agreements with third parties to protect our proprietary rights. In many instances, our course content is produced for us by faculty
and other content experts under work-for-hire agreements pursuant to which we own the course content in return for a fixed development
fee.

Available
Information

Our
website address is www.legacyed.com. The contents of, or information accessible through, our website are not part of this Annual
Report on Form 10-K, and our website address is included in this document as an inactive textual reference only. We make our filings
with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments
to those reports, available free of charge on our website as soon as reasonably practicable after we file such reports with, or furnish
such reports to, the SEC. The public may read and copy the materials we file with the SEC at the SEC’s Public Reference Room at
100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. Additionally, the SEC maintains an internet site that contains reports, proxy and information statements and other
information. The address of the SEC’s website is www.sec.gov. The information contained in the SEC’s website is not
intended to be a part of this filing.

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