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What changed in Legacy Education Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Legacy Education Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+628 added−411 removedSource: 10-K (2025-09-25) vs 10-K (2024-10-01)

Top changes in Legacy Education Inc.'s 2025 10-K

628 paragraphs added · 411 removed · 322 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

169 edited+130 added−47 removed216 unchanged
Biggest changeAs of June 30, 2024, Integrity had 167 students enrolled in its programs. 6 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 HDMC. ● From 2011 to 2013, HDMC received VA approval, Workers Investment Act approval and Department of Rehabilitation approval for its programs. ● In April 2013, HDMC received ACCET accreditation. ● In December 2013, HDMC received 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 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 April 2020, CCC was re-accredited by ACCET through April 2025 for all programs. ● 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 per hybrid approval for all programs, launched new accredited programs of Cardiac Sonography AAS, Vocational Nursing AAS, Ultrasound AAS in CCC, obtain 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) ● In January 2024, we started our first Associates Degree of Nursing program (HDMC). ● In April 2024, HDMC was re-accredited by ACCET through April 2029 for all programs.
Biggest changeOur 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, Workers 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 Professional 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). ● In January 2024, we started our first Associates 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. 7 Industry Background In the United States, the post-secondary education market is large, fragmented, and competitive.
Due to enrollment growth and high demand for its services, HDMC expanded to add a branch campus in Temecula, California campus in order to accommodate 250 to 400 additional students.
Due to enrollment growth and high demand for its services, HDMC expanded to add a branch campus in Temecula, California in order to accommodate 250 to 400 additional students.
Our marketing strategy is designed to attain greater strategic control over our new enrollment growth and strengthen engagement with prospective as well and 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.
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.
See “Risk Factor – Any failure to comply with educational laws and regulatory requirements, including educational requirements, 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 .” Institutional Accreditation.
See “Risk Factor – Any failure to comply with state laws and regulatory requirements, including educational requirements, 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 .” Institutional Accreditation.
If ED concludes that a change in ownership or control of Integrity occurred prior to September 15, 2020, we could be subject to liabilities or other sanctions by ED, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Change of Control.
If ED concludes that a change in ownership or control of Integrity occurred prior to September 15, 2020, we could be subject to liabilities or other sanctions by ED, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Graduates are encouraged to seek certification from the State of California for a registration as a pharmacy technician and a national competency certification. Avocational Courses Phlebotomy Technician Course (Avocational) 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.
Graduates are encouraged to seek certification from the State of California for a registration as a pharmacy technician and a national competency certification. 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.
California Dental Practice Act 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.
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.
Radiation Safety 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.
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.
Coronal Polishing 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.
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.
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.
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.
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 institution after BDR claim decided in borrower’s favor; ● an institution or entity that submitted an application with ED for a change of ownership has a recalculated composite score is 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; ● 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; ● at least half of Title IV funds in the institution’s most recently completed fiscal year are for “failing” gainful employment programs; ● 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; 20 ● 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; ● the institution or an owner files for a receivership or is ordered to appoint a receiver.
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 institution after BDR claim decided in borrower’s favor; 22 ● an institution or entity that submitted an application with ED for a change of ownership has a recalculated composite score is 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; ● 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; ● at least half of Title IV funds in the institution’s most recently completed fiscal year are for “failing” gainful employment programs; ● 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; ● 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 judgement 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; or ● 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; ● 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 21 ● any other event or condition that ED finds is likely to have significant adverse effect on the financial condition of the institution.
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 judgement 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; 23 ● a program is discontinued that enrolls more than 25% of the institution’s total enrolled students who receive Title IV Program funds; ● 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 significant adverse effect on the financial condition of the institution.
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 19 ● 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 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.
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.
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. 38 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.
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.
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. 9 Relationship-Based Marketing.
Business Administrative Specialist The business administrative specialist program is designed to prepare students for a career in which they would need office skills such as preparing reports and documents, bookkeeping, keeping schedules, answering telephones, taking messages and providing information. Integrity College of Health Integrity offers start dates throughout the year for its various programs.
Business Administrative Specialist Certificate Program The business administrative specialist program is designed to prepare students for a career in which they would need office skills such as preparing reports and documents, bookkeeping, keeping schedules, answering telephones, taking messages and providing information. Integrity College of Health Integrity offers start dates throughout the year for its various programs.
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.
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. 13 State Authorization.
Diagnostic Medical Sonography 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.
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.
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 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.
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. 37 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.
Veterinary Assistant 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 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.
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 The medical assistant program is designed to prepare students for entry-level positions as a medical assistant in either clinical and/or administrative capacity.
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.
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 provide 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.
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.
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.
These difficulties could result in adverse action by ED, or conditions or restrictions imposed by ED on one or more of our institutions. 29 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.
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. In addition, some of our students receive state financial aid in the form of grants, loans or scholarships.
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.
We also assist students with resume writing, interviewing and other job search skills. 37 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.
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 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. Return of Title IV Program Funds.
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.
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. 23 In addition, the FTC has indicated an increased focus on direct or implied misrepresentations.
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.
Certificate program graduates can complete an UT Associate of Applied Science Degree remotely. Vocational Nursing Diploma Program The vocation nursing program is designed to provide the student with the basic knowledge, skills and abilities to perform the duties of a vocation nurse in a health care environment.
Certificate program graduates can complete an UT Associate of Applied Science Degree remotely. 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.
Our websites’ integrated marketing campaigns direct prospective students to call us or visit the HDMC, CCC and Integrity websites where they will find details regarding our programs and campuses and can request additional information regarding the programs that interest them. Referrals.
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.
Our recruiting efforts are conducted by a group of approximately 10 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.
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. 10 Student Support Admissions.
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 .” 14 Programmatic Accreditation . Many states and professional associations require professional programs to be accredited.
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.
Each of our institutions (HDMC, CCC, and Integrity) participate in the Title IV Programs, as well as other federal and state financial aid programs and are subject to extensive regulation by ED, other federal and state educational agencies and accreditors.
Each of our institutions (HDMC, CCC, Integrity and CCMCC) participate in the Title IV Programs, as well as other federal and state financial aid programs and are subject to extensive regulation by ED, other federal and state educational agencies and accreditors.
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. The institution must submit the resulting audit report to ED for review.
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 ED comes out with additional guidance of 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 percent.
If ED comes out with additional guidance of 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%.
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. 18 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.
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. 20 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.
The VN programs at HDMC and Integrity are approved by BVNPT. The phlebotomy programs at HDMC and CCC are approved by California Department of Public Health. In addition, we are subject to state consumer protection laws.
The VN programs at HDMC, Integrity and CCMCC are approved by BVNPT. The phlebotomy programs at HDMC and CCC are approved by California Department of Public Health. In addition, we are subject to state consumer protection laws.
Moreover, 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.
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.
On August 12, 2024, ABHES provided written confirmation that the 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.
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.
If an agency does not require us to go through a change of ownership and/or control review process, we may be required to submit notices or other information to the agency which could result in further scrutiny or inquiries by the agency. 26 A change of control could occur as a result of future transactions in which the Company or our institutions are involved.
If an agency does not require us to go through a change of ownership and/or control review process, we may be required to submit notices or other information to the agency which could result in further scrutiny or inquiries by the agency. 30 A change of control could occur as a result of future transactions in which the Company or our institutions are involved.
We have obtained approval to offer portions of our programs via distance education from ACCET for CCC and HDMC, ABHES for Integrity, and from BPPE for HDMC, CCC, and Integrity.
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.
Some of our local competitors include San Joaquin Valley College, Charter College Lancaster, Career Care Institute, UEI College, Bakersfield College and the Pima Medical Institute. Such competitors may have greater financial resources and greater brand recognition than us. For example, public institutions receive government subsidies and other financial sources not available to for-profit schools.
Some of our local competitors include San Joaquin Valley College, Career Care Institute, UEI College, Bakersfield College and the Pima Medical Institute. Such competitors may have greater financial resources and greater brand recognition than us. For example, public institutions receive government subsidies and other financial sources not available to for-profit schools.
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. Ultrasound Technician Certificate 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.
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. 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.
We are in the process of initiating communications with our education regulators and accreditors on this subject and have not received responses as to whether they will treat the offering as a change in ownership or control requiring agency approval.
We are in the process of initiating communications with our education regulators and accreditors on this subject and have not received responses as to whether they will treat the initial public offering as a change in ownership or control requiring agency approval.
If agencies require us to obtain approvals in connection with the 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 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.
Individuals might also consider the nursing assistant training if they are interested in working in healthcare to support their education. Phlebotomy Technician Phlebotomists are allied health professionals who draw blood from patients for medical testing.
Individuals might also consider the nursing assistant training if they are interested in working in healthcare to support their education. 39 Phlebotomy Technician Course Phlebotomists are allied health professionals who draw blood from patients for medical testing.
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. 38
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. 45
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 offering.
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.
Referrals from current students, high school counselors and satisfied graduates and their employers have historically represented approximately 36% of our new enrollments. Our school administrators actively work with our current students to encourage them to recommend our programs to prospective students.
Referrals from current students, high school counselors and satisfied graduates and their employers have historically represented approximately 25% of our new enrollments. Our school administrators actively work with our current students to encourage them to recommend our programs to prospective students.
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 and CCC are currently accredited by ACCET through April 2029 and April 2025, respectively. Integrity is accredited by ABHES through February 2026.
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 2026, respectively. Integrity is accredited by ABHES through February 2026.
The programs currently offered as of June 30, 2024, are as follows: Current Programs Offered Area of Study Program Program Length Estimated Total Fees, Charges and Expenses Vocational Nursing Diploma 56-68 weeks $ 35,311 Medical Assisting Diploma 34-42 weeks $ 19,340 Diagnostic Medical Sonography Diploma 84-99 weeks $ 46,965 Medical Billing and Coding Diploma 35-42 weeks $ 19,335 Bachelor of Science in Nursing (RN to BSN) BS Degree 46 weeks $ 11,143 Veterinary Assistant Certificate 35-43 weeks $ 19,340 Vocation Nursing AAS Associate of Applied Science 48 weeks $ 19,735 Healthcare Career Training Programs Vocational Nursing The VN program provides students with nursing skills for direct patient care.
The programs currently offered as of June 30, 2025, are as follows: Current Programs Offered Area of Study Program Program Length Estimated Total Fees, Charges and Expenses Vocational Nursing Diploma 56-68 weeks $ 35,311 Medical Assisting Certificate 34-42 weeks $ 19,340 Diagnostic Medical Sonography Diploma 84-99 weeks $ 46,965 Medical Billing and Coding Certificate 35-42 weeks $ 19,340 Bachelor of Science in Nursing (RN to BSN) BS Degree 46 weeks $ 11,143 Veterinary Assistant Certificate 35-43 weeks $ 19,340 Vocational Nursing AAS Associate of Applied Science 48 weeks $ 19,735 41 Healthcare Career Training Programs Vocational Nursing Diploma Program The VN program provides students with nursing skills for direct patient care.
The programs currently offered as of June 30, 2024 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 $ 59,120 Vocational Nursing AAS Associate of Applied Science 48 weeks $ 19,735 Associate Degree Nursing Association Degree 96 weeks $ 89,995 Cardiac Sonography Associate of Applied Science 115-130 weeks $ 59,120 Ultrasound Technician Diploma 84-99 weeks $ 51,699 Clinical Medical Assisting Certificate 34-42 weeks $ 19,340 Dental Assisting Certificate 34-42 weeks $ 19,340 Medical Administrative Assisting Certificate 15 weeks $ 7,784 Medical Billing and Coding Certificate 35-51 weeks $ 19,340 Pharmacy Technician Certificate 34-42 weeks $ 19,534 Veterinary Assistant Certificate 35-42 weeks $ 19,340 Vocational Nursing Diploma 56-68 weeks $ 35,311 Phlebotomy Technician Course (Avocational) 5 weeks $ 1,915 Magnetic Resonance Imaging Associate of Applied Science 115 weeks $ 59,120 Nursing Assistant Certificate $ 3,255 California Dental Practice Act Course (Avocational) 2 hours $ 99 Infection Control Course (Avocational) 8 hours $ 249 Radiation Safety Course (Avocational) 32 hours $ 449 Teaching Adult Learner -Strategies and Techniques for Nurses and Allied Health Program Educators Course (Avocational) 30 hours $ 115 Coronal Polishing Course (Avocational) 6 weeks $ 3,255 Dispensary Agent Certification Course (Avocational) 10 hours $ 242 Vocational Nursing Pre-Requisite Course (Avocational) 4 weeks $ 850 LVN IV Therapy Certificate Course (Avocational) 4 days $ 275 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 programs currently offered as of June 30, 2025 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 $ 59,120 Vocational Nursing AAS Associate of Applied Science 48 weeks $ 19,735 Associate Degree Nursing Association Degree 96 weeks $ 89,995 Cardiac Sonography Associate of Applied Science 115-130 weeks $ 59,120 Ultrasound Technician Diploma 84-99 weeks $ 51,699 Clinical Medical Assisting Certificate 34-42 weeks $ 19,340 Dental Assisting Certificate 34-42 weeks $ 19,340 Medical Administrative Assisting Certificate 15 weeks $ 7,784 Medical Billing and Coding Certificate 35-51 weeks $ 19,340 Pharmacy Technician Certificate 34-42 weeks $ 19,534 Veterinary Assistant Certificate 35-42 weeks $ 19,340 Vocational Nursing Diploma 56-68 weeks $ 35,311 Phlebotomy Technician Course (Avocational) 5 weeks $ 1,915 Magnetic Resonance Imaging Associate of Applied Science 115 weeks $ 59,120 Nursing Assistant Certificate 9 weeks $ 3,255 Pit and Fissure Sealant Course (Avocational) 2 weeks $ 525 California Dental Practice Act Course (Avocational) 2 hours $ 99 Infection Control Course (Avocational) 8 hours $ 249 Radiation Safety Course (Avocational) 32 hours $ 449 Teaching Adult Learner - Strategies and Techniques for Nurses and Allied Health Program Educators Course (Avocational) 30 hours $ 115 Coronal Polishing Course (Avocational) 6 weeks $ 3,255 Dispensary Agent Certification Course (Avocational) 10 hours $ 242 Vocational Nursing Pre-Requisite Course (Avocational) 4 weeks $ 850 LVN IV Therapy Certificate Course (Avocational) 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 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, and are the subject of upcoming rulemaking. ED held negotiated rulemaking sessions between January and March 2024, and the negotiators did not reach consensus on proposed language.
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 January and March 2024, and the negotiators did not reach consensus on proposed language.
As described below, ABHES and ACCET have provided written confirmation that the offering as described would not constitute a change in legal status, ownership or control under the respective standards.
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.
We requested guidance from ABHES regarding whether the offering as described will constitute a change in in legal status, ownership or control for the purposes of its accreditation standards.
We requested guidance from ABHES regarding whether the initial public offering as described will constitute a change in in legal status, ownership or control for the purposes of its accreditation standards.
ED annually evaluates the financial responsibility of HDMC, CCC, and Integrity on a consolidated basis. We have calculated our composite score for the 2023 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 2023 fiscal year.
ED annually evaluates the financial responsibility of HDMC, CCC, Integrity, and CCMCC on a consolidated basis. We have calculated our composite score for the 2024 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 2024 fiscal year.
Our Integrity institution is 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 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.
Other trends that could positively impact demand for our programs include: ● increasing demand by employers for certain types of professional and skilled workers; 7 ● growth in the number of high school graduates from 2.8 million in 1999-2000 to an estimated 3.7 million in 2019-2020, 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.
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.
The revised certification regulations are expansive, complex and could be difficult for our institutions to comply with its applicable requirements as interpreted by ED.
The revised certification regulations are expansive, complex and could be difficult for our institutions to comply with their applicable requirements as interpreted by ED.
See “Risk Factor - If our institutions fail to comply with the extensive 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 .” Under the provisions of the 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.
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 .” 12 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.
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. 90/10 Revenue Test.
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.
Our Integrity institution is currently approved under a temporary provisional program participation agreement which (as described in a subsequent section) permits an institution to continue participating in the Title IV Programs on a month-to-month basis while ED reviews the change in ownership and as long as the institution timely submits certain documentation to ED during the process.
Our Integrity and CCMCC institutions are currently approved under a temporary provisional program participation agreement which (as described in a subsequent section) permits an institution to continue participating in the Title IV Programs on a month-to-month basis while ED reviews the change in ownership and as long as the institution timely submits certain documentation to ED during the process.
The criteria for administrative capability include, among other things, that the institution: ● comply with all applicable federal student financial aid requirements; 27 ● 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; ● 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 it students; ● disburses funds to students in a timely manner that best meets their needs; ● does not have programs that “fail” gainful employment rates and 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.
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; 31 ● 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; ● 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 programs that “fail” gainful employment rates and 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.
See “Risk Factor - A failure to maintain compliance with ED’s “financial responsibility” requirements would have negative impacts on our operations .” In September 2023, ED released the final cohort default rates for the 2020 federal fiscal year. These are the most recent final rates published by ED.
See “Risk Factor - A failure to maintain compliance with ED’s “financial responsibility” requirements would have negative impacts on our operations .” 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 final regulations became effective July 1, 2023 and applied to fiscal years beginning on or after January 1, 2023 (which will be the fiscal year ending June 30, 2024 for our schools).
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).
Census Bureau reported that approximately 64.5 million adults over the age of 25 in the United States did not have more than a high school education, and approximately 33.0 million adults over the age of 25 had some college experience but had not completed a college degree.
Census Bureau reported that approximately 64.0 million adults over the age of 25 in the United States did not have more than a high school education, and approximately 32.2 million adults over the age of 25 had some college experience but had not completed a college degree.
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.
The failure to timely return funds can result in liabilities or sanctions. 24 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.
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 above, 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, and other topics.
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.
As of June 30, 2024, HDMC had 1,537 students enrolled in its programs. Central Coast College 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.
As of June 30, 2025, HDMC had 1,956 students enrolled in its programs. 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.
Veterinary Technology 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.
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.
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 VN AAS degree program builds on the vocational nursing diploma by adding the same one hundred percent online general education and science courses required for graduates of the pre-licensure associate degree registered nursing program.
CCC offers the following certificate or degree programs: business administrative specialist, computer specialist: accounting, medical administrative assistant, medical assisting, nursing assistant, UT, UT Associate of Applied Science, veterinary assistant, veterinary technology Associate of Applied Science, and VN. CCC also offers an avocational phlebotomy technician program.
CCC offers the following certificate or degree programs: business administrative specialist, computer specialist: accounting, medical administrative assistant, medical assisting, nursing assistant, UT, UT Associate of Applied Science, veterinary assistant, veterinary assistant, veterinary technology, Associate of Applied Science, VN, surgical technology (Associate of Applied Science), dental assisting, sterile processing technician, and pharmacy technician. CCC also offers an avocational phlebotomy technician program.
Additional ED regulations restrict the ability of instructions 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.
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.
See “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.
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.
ITEM 1. BUSINESS Overview We provide career-focused, post-secondary education services to students at all stages of adult life, from recent high school graduates to working parents, through our accredited academic institutions: High Desert Medical College, which we acquired in July 2010, Central Coast College, which we acquired in January 2019, and Integrity College of Health.
BUSINESS Overview We provide career-focused, post-secondary education services to students at all stages of adult life, from recent high school graduates to working parents, through our accredited academic institutions: High Desert Medical College, which we acquired in July 2010, Central Coast College, which we acquired in January 2019, Integrity College of Health which we acquired in September 2020, and Contra Costa Medical Career College, which we acquired in December 2024.
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 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.
We have requested confirmation from AVMA CVTEA and the California Board of Registered Nursing that the 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 either agency.
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.
CCC and Integrity have not received any BDR applications from Post-Class Applicants. It is possible that we could receive BDR claims in the future.
CCC, Integrity, and CCMCC (at least since we acquired CCMCC) have not received any BDR applications from Post-Class Applicants. It is possible that we could receive BDR claims in the future.
See “Financial Responsibility Standards.” The current ED administration 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.
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.
See “Risk Factors - Our institutions could lose their eligibility to participate in federal student financial aid programs if the percentage of their revenues derived from applicable federal 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. 15 Financial Value Transparency and Gainful Employment Regulations.
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.
The program includes a 960-hour externship. 36 Medical Insurance Coding and Billing Specialist 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.
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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

105 edited+153 added−34 removed245 unchanged
Biggest changeIf ED or other regulators impose conditions or decline to provide requisite approvals associated with the acquisition, the teach-out, or the addition of the CCMCC campus as an additional location of CCC, it could impair our ability to expand our CCC institution through the acquisition of substantially all of the assets of Contra Costa If our students’ access to financial aid from state sources, from federal sources other than the Title IV Programs, or from alternative loan programs is lost or reduced, it could impact our results of operations.
Biggest changeIf our students’ access to financial aid from state sources, from federal sources other than the Title IV Programs, or from alternative loan programs is lost or reduced, it could impact our results of operations. Some of our students receive financial aid from federal sources other than the Title IV Programs, such as programs administered by the U.S.
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 arrangement or has a judgement 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; ● 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 significant adverse effect on the financial condition of the institution.
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; 56 ● 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 arrangement or has a judgement 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; ● 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 significant adverse effect on the financial condition of the institution.
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 institution after BDR claim decided in borrower’s favor; ● an institution or entity that submitted an application with ED for a change of ownership has a recalculated composite score is 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; ● 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; ● at least half of Title IV funds in the institution’s most recently completed fiscal year are for “failing” gainful employment programs; ● 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; 46 ● the institution declares financial exigency to government agency or accrediting agency; ● the institution or an owner files for a receivership or is ordered to appoint a receiver.
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 institution after BDR claim decided in borrower’s favor; ● an institution or entity that submitted an application with ED for a change of ownership has a recalculated composite score is 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; ● 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; ● at least half of Title IV funds in the institution’s most recently completed fiscal year are for “failing” gainful employment programs; ● 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; ● the institution or an owner files for a receivership or is ordered to appoint a receiver.
If we are found to have violated any applicable laws, regulations, standards or policies, we may be subject to the following sanctions, among others, imposed by any one or more regulatory agencies or other government bodies who regulate us and our schools: ● imposition of monetary fines or penalties, including imposition of a requirement to submit a substantial letter of credit or other form of financial protection; 39 ● repayment of funds received under the Title IV Programs or other federal or state financial aid programs the amounts of which could be material; ● restrictions on, or termination, revocation, or nonrenewal of, the eligibility of one or more of our institutions or one or more of their locations or programs to participate in the Title IV Programs or other federal or state financial aid programs; ● limits on, or termination, revocation, or nonrenewal of, our authorizations to operate our institutions in one or more states or ability to grant degrees, diplomas and certificates; ● restrictions on, or termination, revocation or nonrenewal of, our institutions’ approvals and/or accreditations or the approval and/or accreditation of one or more of our locations or programs; ● limitations on our operations including, but not limited to, our ability to open new institutions or locations (i.e., campuses), offer new programs, change the length of our existing programs, or increase enrollment levels or amounts of funding received from Title IV or other financial assistance programs; ● costly investigations, litigation or other adversarial proceedings; and ● civil or criminal penalties being levied against us or our institutions.
If we are found to have violated any applicable laws, regulations, standards or policies, we may be subject to the following sanctions, among others, imposed by any one or more regulatory agencies or other government bodies who regulate us and our schools: ● imposition of monetary fines or penalties, including imposition of a requirement to submit a substantial letter of credit or other form of financial protection; 46 ● repayment of funds received under the Title IV Programs or other federal or state financial aid programs the amounts of which could be material; ● restrictions on, or termination, revocation, or nonrenewal of, the eligibility of one or more of our institutions or one or more of their locations or programs to participate in the Title IV Programs or other federal or state financial aid programs; ● limits on, or termination, revocation, or nonrenewal of, our authorizations to operate our institutions in one or more states or ability to grant degrees, diplomas and certificates; ● restrictions on, or termination, revocation or nonrenewal of, our institutions’ approvals and/or accreditations or the approval and/or accreditation of one or more of our locations or programs; ● limitations on our operations including, but not limited to, our ability to open new institutions or locations (i.e., campuses), offer new programs, change the length of our existing programs, or increase enrollment levels or amounts of funding received from Title IV or other financial assistance programs; ● costly investigations, litigation or other adversarial proceedings; and ● civil or criminal penalties being levied against us or our institutions.
Concerns over medical epidemics, energy costs, geopolitical issues, the U.S. mortgage market and a deteriorating real estate market, unstable global credit markets and financial conditions, and volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth, increased unemployment rates, and increased credit defaults in recent years.
Concerns over medical epidemics, energy costs, geopolitical issues, the U.S. mortgage market and a deteriorating real estate market, unstable global credit markets and financial conditions, tariffs and volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth, increased unemployment rates, and increased credit defaults in recent years.
If ED chose to impose such a condition on one or more of our institutions, that could negatively impact our expansion plans. 53 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 the Title IV Programs.
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 the Title IV Programs.
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 provide 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.
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 we are unable to comply with applicable past, current or future state education, consumer protection, licensing, authorization or other requirements, or determine that we are unable to cost effectively comply with new or revised requirements, we could be subject to loss of state authorization and to monetary fines or penalties or limitations on the manner in which we conduct our business, or we could lose enrollments, eligibility to participate in the Title IV Programs and revenues, in any affected states, which could materially affect our results of operations and our growth opportunities. 41 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.
If we are unable to comply with applicable past, current or future state education, consumer protection, licensing, authorization or other requirements, or determine that we are unable to cost effectively comply with new or revised requirements, we could be subject to loss of state authorization and to monetary fines or penalties or limitations on the manner in which we conduct our business, or we could lose enrollments, eligibility to participate in the Title IV Programs and revenues, in any affected states, which could materially affect our results of operations and our growth opportunities. 48 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.
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. 52 In addition, the FTC has indicated an increased focus on direct or implied misrepresentations.
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.
We do not intend to pay cash dividends. While we have declared and paid cash dividends on our capital stock in 2023, we currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future.
While we have declared and paid cash dividends on our capital stock in 2023, we currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future.
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.
However, provisional certification does not otherwise limit an institution’s access to Title IV Program funds. 61 On October 31, 2023, ED published a final rule revising its Title IV Program certification regulations, with an effective date of July 1, 2024.
Alternatively, if a court were to find the choice of forum provision contained in our Bylaws to be inapplicable or unenforceable in an action, the Company may incur additional costs associated with resolving such action in other jurisdictions, which could have a material adverse effect on the Company’s business, results of operations, and financial condition. 61 Certain provisions of our Articles of Incorporation and Nevada law make it more difficult for a third party to acquire us and make a takeover more difficult to complete, even if such a transaction were in stockholders’ interest.
Alternatively, if a court were to find the choice of forum provision contained in our Bylaws to be inapplicable or unenforceable in an action, the Company may incur additional costs associated with resolving such action in other jurisdictions, which could have a material adverse effect on the Company’s business, results of operations, and financial condition. 77 Certain provisions of our Articles of Incorporation and Nevada law make it more difficult for a third party to acquire us and make a takeover more difficult to complete, even if such a transaction were in stockholders’ interest.
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 percent.
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%.
Moreover, 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.
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.
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. 49 The American Rescue Plan Act (“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 percentage.
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. 59 The American Rescue Plan Act (“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 percentage.
We have obtained approval to offer portions of our programs via distance education from ACCET for HDMC and CCC, ABHES for Integrity, and from the BPPE for HDMC, CCC, and Integrity.
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 the BPPE for HDMC, CCC, CCMCC and Integrity.
The VN programs at HDMC and Integrity are approved by BVNPT. The phlebotomy programs at HDMC and CCC are approved by California Department of Public Health.
The VN programs at HDMC, Integrity, and CCMCC are approved by BVNPT. The phlebotomy programs at HDMC and CCC are approved by California Department of Public Health.
In addition, we are subject to state consumer protection laws. 40 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.
In addition, we are subject to state consumer protection laws. 47 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.
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.
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 may take advantage of these provisions until the earlier of (i) the last day of our fiscal year following the fifth anniversary of the closing of our initial public offering (ii) the last day of the fiscal year (a) in which we have total annual gross revenue of at least $1.235 billion or (b) in which we are deemed to be a large accelerated filer, which means the market value of our equity securities that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (iii) the date on which we have issued more than $1.0 billion of non-convertible debt in any three-year period.
We may take advantage of these provisions until the earlier of (i) the last day of our fiscal year following the fifth anniversary of the closing of our initial public offering, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion or more, (iii) the date on which we are deemed to be a large accelerated filer, which means the market value of our equity securities that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (iv) the date on which we have issued more than $1.0 billion of non-convertible debt during the previous three-year period.
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, and are the subject of upcoming rulemaking. ED held negotiated rulemaking sessions between January and March 2024, and the negotiators did not reach consensus on proposed language.
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 January and March 2024, and the negotiators did not reach consensus on proposed language.
See “Risk Factors - Our institutions could lose their eligibility to participate in federal student financial aid programs if the percentage of their revenues derived from applicable federal 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.
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.
ED annually evaluates the financial responsibility of HDMC, CCC, and Integrity on a consolidated basis. We have calculated our composite score for the 2023 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 2023 fiscal year.
ED annually evaluates the financial responsibility of HDMC, CCC, Integrity, and CCMCC on a consolidated basis. We have calculated our composite score for the 2024 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 2024 fiscal year.
Our Integrity institution is 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 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.
The criteria for administrative capability 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; ● establish and maintain records required under the Title IV Programs 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 it students; 48 ● disburses funds to students in a timely manner that best meets their needs; ● does not have programs that “fail” gainful employment rates and 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.
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; ● establish and maintain records required under the Title IV Programs 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 it students; ● disburse funds to students in a timely manner that best meets their needs; 58 ● does not have programs that “fail” gainful employment rates and 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.
Our Integrity institution is currently approved under a temporary provisional program participation agreement which (as described in the subsequent section) permits an institution to continue participating in the Title IV Programs on a month-to-month basis while ED reviews the change in ownership and as long as the institution timely submits certain documentation to ED during the process.
Our Integrity and CCMCC institutions are currently approved under a temporary provisional program participation agreement which (as described in the subsequent section) permits an institution to continue participating in the Title IV Programs on a month-to-month basis while ED reviews the change in ownership and as long as the institution timely submits certain documentation to ED during the process.
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, and other topics.
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.
The final regulations became effective July 1, 2023 and applied to fiscal years beginning on or after January 1, 2023 (which will be the fiscal years ending June 30, 2024 for our schools).
The final regulations became effective July 1, 2023 and applied to fiscal years beginning on or after January 1, 2023 (which was the fiscal years ending June 30, 2024 for our schools).
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.
The failure to timely return funds can result in liabilities or sanctions. 67 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.
Our institutions are authorized to operate by the California Bureau for Private Postsecondary Education (“BPPE”). 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 Nurses approves the Associate degree of Nursing program at HDMC.
Our institutions are authorized to operate by BPPE. 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 Nurses approves the Associate degree of Nursing program at HDMC.
Additional ED regulations restrict 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.
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.
HDMC and CCC are currently accredited by ACCET through April 2029 and April 2025, respectively. Integrity is accredited by ABHES through February 2026. ACCET and ABHES are ED-recognized accrediting agencies.
HDMC, CCC, and CCMCC are currently accredited by ACCET through April 2029, April 2030, and April 2026, respectively. Integrity is accredited by ABHES through February 2026. ACCET and ABHES are ED-recognized accrediting agencies.
See “Risk Factors - A failure to maintain compliance with ED’s “financial responsibility” requirements would have negative impacts on our operations .” 45 The current ED administration has been more active in processing BDR applications and has recently distributed claims to institutions for an opportunity to respond to borrower allegations.
See “Risk Factors - A failure to maintain compliance with ED’s “financial responsibility” requirements would have negative impacts on our operations .” 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.
See “Risk Factors - A failure to maintain compliance with ED’s “financial responsibility” requirements would have negative impacts on our operations. ” In October 2023, ED released the final cohort default rates for the 2020 federal fiscal year. These are the most recent final rates published by ED.
See “Risk Factors - A failure to maintain compliance with ED’s “financial responsibility” requirements would have negative impacts on our operations. ” 60 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.
Under this definition, for ED purposes, we operate the following three institutions, collectively consisting of three main campuses and two additional locations: HDMC with locations in Lancaster, Bakersfield, and Temecula; CCC located in Salinas; and Integrity located in Pasadena.
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 located in Salinas; Integrity located in Pasadena, and CCMCC with a location in Antioch.
The temporary provisional program participation agreement had an expiration date of November 30, 2020 but 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 Integrity’s pending application for approval of its change in ownership and control.
The CCMCC temporary provisional program participation agreement had an expiration date of January 31, 2025 and the Integrity temporary provisional program participation agreement had an expiration date of November 30, 2020, but each temporary provisional program participation agreement 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 Integrity’s and CCMCC’s pending applications for approval of its change in ownership and control.
CCC and Integrity have not received any BDR applications from Post-Class Applicants. It is possible that we could receive BDR claims in the future.
CCC, Integrity, and CCMCC (at least since we acquired CCMCC) have not received any BDR applications from Post-Class Applicants. It is possible that we could receive BDR claims in the future.
We cannot predict if investors will find our shares less attractive because we may rely on these provisions. If some investors find our shares less attractive as a result, there may be a less active trading market for our shares and our share price may be more volatile. 62 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
We cannot predict if investors will find our shares less attractive because we may rely on these provisions. If some investors find our shares less attractive as a result, there may be a less active trading market for our shares and our share price may be more volatile.
Our success depends in part on our ability to protect our proprietary rights. We rely on a combination of copyrights, trademarks, service marks, trade secrets, domain names and agreements to protect our proprietary rights.
We rely on a combination of copyrights, trademarks, service marks, trade secrets, domain names and agreements to protect our proprietary rights.
If more than one of these financial responsibility triggers occur, ED could impose separate letters of credit to address each triggering event. 47 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.
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.
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.
Each of our institutions must submit the resulting audit report to ED for review. 69 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.
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.
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 May 2025, the CFPB indicated it would deprioritize regulation of student loans.
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.
We cannot predict how long it will take the ED to make its determination or the outcome of its determination. 55 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.
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.
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.
Integrity is currently participating in the Title IV Programs under a temporary provisional program participation agreement in connection with its change in ownership and control resulting from our acquisition of the institution.
Integrity and CMCC are currently participating in the Title IV Programs under a temporary provisional program participation agreement in connection with their change in ownership and control resulting from our acquisition of the institutions.
Multiple lawsuits have been filed challenging these regulations, however, we cannot predict the outcome of these cases. The financial value transparency and gainful employment regulations include standards for annually evaluating postsecondary educational programs based on the calculation of debt-to-earnings rates and an “earnings premium” measure.
Multiple lawsuits were filed challenging these regulations and these were consolidated into one case. We cannot predict the outcome of this case. The financial value transparency and gainful employment regulations include standards for annually evaluating postsecondary educational programs based on the calculation of debt-to-earnings rates and an “earnings premium” measure.
A breach, theft or loss of personal information held by us or our vendors, or a violation of the laws and regulations governing privacy could have a material adverse effect on our reputation or result in lawsuits, additional regulation, remediation and compliance costs or investments in additional security systems to protect our computer networks, the costs of which may be substantial.
A breach, theft or loss of personal information held by us or our vendors, or a violation of the laws and regulations governing privacy could have a material adverse effect on our reputation or result in lawsuits, additional regulation, remediation and compliance costs or investments in additional security systems to protect our computer networks, the costs of which may be substantial. 74 System disruptions and vulnerability from security risks to our online technology infrastructure could have a material adverse effect on our ability to attract and retain students.
Our cohort default rates could be substantially higher for the periods after the suspension expired if borrowers do not timely repay their federal student loans. 50 If any of our institutions were to lose eligibility to participate in the Title IV Programs due to student loan default rates being higher than ED’s thresholds and we could not arrange for adequate alternative student financing sources, we might have to close those institutions, which could have a material adverse effect on our total student enrollment, financial condition, results of operations and cash flows.
If any of our institutions were to lose eligibility to participate in the Title IV Programs due to student loan default rates being higher than ED’s thresholds and we could not arrange for adequate alternative student financing sources, we might have to close those institutions, which could have a material adverse effect on our total student enrollment, financial condition, results of operations and cash flows.
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. The institution must submit the resulting audit report to ED for review.
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.
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.
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.
In addition, the terms of any future debt or credit facility may preclude us from paying any dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of potential gain for the foreseeable future.
In addition, the terms of any future debt or credit facility may preclude us from paying any dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of potential gain for the foreseeable future. Market and economic conditions may negatively impact our business, financial condition, and share price.
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.
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. 68 States that provide financial aid to our students face budgetary constraints, which in certain instances has reduced the level of state financial aid available to our students.
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.
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. 62 On December 31, 2019, we entered into a Membership Interest Purchase Agreement with the sole member of Integrity.
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.
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.
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. 43 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.
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.
If these initiatives do not succeed, our ability to attract, enroll and retain students in our programs could be adversely affected. Consequently, our ability to increase revenue or maintain profitability could be impaired.
We have been investing in initiatives to improve student experiences, retention and academic outcomes. If these initiatives do not succeed, our ability to attract, enroll and retain students in our programs could be adversely affected. Consequently, our ability to increase revenue or maintain profitability could be impaired.
Our future financial condition and results of operations could be materially adversely affected if we are required to write down the carrying value of non-financial assets and non-financial liabilities, including long-lived assets, deferred tax assets and goodwill and intangible assets, such as our trade names.
Any such costs and expenses could have a material adverse effect on our financial condition and results of operations and the market price of our common stock. 72 Our future financial condition and results of operations could be materially adversely affected if we are required to write down the carrying value of non-financial assets and non-financial liabilities, including long-lived assets, deferred tax assets and goodwill and intangible assets, such as our trade names.
We also extend credit for tuition and fees to 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 are subject to review by federal and state agencies responsible for overseeing compliance with these requirements.
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.
New laws, regulations or interpretations related to doing business over the Internet could increase our costs and adversely affect enrollments. 59 We are subject to privacy and information security laws and regulations due to our collection and use of personal information, and any violations of those laws or regulations, or any breach, theft or loss of that information, could adversely affect our reputation and operations.
We are subject to privacy and information security laws and regulations due to our collection and use of personal information, and any violations of those laws or regulations, or any breach, theft or loss of that information, could adversely affect our reputation and operations.
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.
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. 54 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.
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.
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. 57 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.
If we are unable to successfully resolve future litigation and regulatory and governmental inquiries involving us, or face regulatory actions or litigation, our financial condition and results of operations could be adversely affected.
These fluctuations could result in volatility and adversely affect our operations from one quarter to the next. 71 If we are unable to successfully resolve future litigation and regulatory and governmental inquiries involving us, or face regulatory actions or litigation, our financial condition and results of operations could be adversely affected.
Department of Education (“ED”), other federal and state educational agencies and accreditors. CCC and HDMC are approved to offer, and must comply with applicable requirements related to, veterans education assistance administered by the Department of Veterans Affairs (“VA”), Cal Grants administered by the California Student Aid Commission, and funds administered under the Workforce Innovation and Opportunity Act.
CCC, HDMC, and CCMCC are approved to offer, and must comply with applicable requirements related to, veterans education assistance administered by the 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.
If no or few securities or industry analysts cover our company, the trading price for our common stock would be negatively impacted. If one or more of the analysts who covers us downgrades our common stock or publishes incorrect or unfavorable research about our business, our stock price would likely decline.
If one or more of the analysts who covers us downgrades our common stock or publishes incorrect or unfavorable research about our business, our stock price would likely decline.
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 the ED to make its determination or the outcome of its determination.
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.
Each of our institutions (HDMC, CCC, and Integrity) participates in the federal student aid programs authorized by Title IV of the Higher Education Act of 1965 (“HEA”), as amended (“Title IV Programs”), as well as other federal and state financial aid programs and are subject to extensive regulation by the U.S.
Each of our institutions (HDMC, CCC, Integrity, and CCMCC) participates in the federal student aid programs authorized by Title IV of the HEA, as amended (Title IV Programs), as well as other federal and state financial aid programs and are subject to extensive regulation by ED, other federal and state educational agencies and accreditors.
On December 31, 2019, we entered into a Membership Interest Purchase Agreement with the sole member of Integrity. We purchased from the sole member of Integrity on that date 24.5% of her interest and obtained an exclusive option to acquire her remaining membership interest upon payment of $100, which was exercised on September 15, 2020.
We purchased from the sole member of Integrity on that date 24.5% of her interest and obtained an exclusive option to acquire her remaining membership interest upon payment of $100, which was exercised on September 15, 2020. For purposes of our financial statements, our acquisition of Integrity is deemed to have been effective as of December 31, 2019.
Among other things, the 2022 version of the BDR regulations also amended the processes for BDR applications received on or after, or that were pending with ED as of, July 1, 2023.
Among other things, the 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 received on or after, or that were pending with ED as of, July 1, 2023.
The 2022 version of the BDR regulations were to take effect on July 1, 2023, in addition to certain closed school loan discharge provisions part of the same rule, but are currently enjoined by the U.S. Court of Appeals for the Fifth Circuit pursuant to litigation captioned Career Colleges and Schools of Texas v. U.S.
The 2022 version of the BDR regulations were to take effect on July 1, 2023, in addition to certain closed school loan discharge provisions 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.
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.
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. 49 Congress may revise the laws governing the Title IV Programs or reduce funding for those programs which could reduce our enrollment and revenue and increase costs of operations.
However, the new regulations could require us to modify or eliminate programs to comply with the new regulations and could result in the loss of Title IV Program eligibility for our programs that fail to comply with the regulations which could have a material adverse effect on our student population and our revenues. 44 ED’s “borrower defense to repayment” regulations may subject us to significant repayment liability to ED for discharged federal student loans, posting of substantial letters of credit and other requirements that could have a material adverse effect on us.
However, the new regulations could require us to modify or eliminate programs to comply with the new regulations and could result in the loss of Title IV Program eligibility for our programs that fail to comply with the regulations which could have a material adverse effect on our student population and our revenues.
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. 55 If the result of any pending or future proceeding, lawsuit, audit, review, 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 and eligibility for other financial assistance programs, loss of accreditation or state authorization, injunctions or other penalties which could impact our results of operations.
If the result of any pending or future proceeding, lawsuit, audit, review, 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 and eligibility for other financial assistance programs, loss of accreditation or state authorization, injunctions or other penalties which could impact our results of operations.
See “Business - Education Regulations - Financial Responsibility Standards.” We have calculated the 90/10 Rule percentages for the 2023, 2022 and 2021 fiscal years as follows for HDMC, CCC and Integrity: HDMC 84.53%, 82.17% and 84.24%; CCC 74.48%, 72.34% and 71.18%; and Integrity 88.14%, 85.43%, and 89.47%, respectively. Our 90/10 calculations are subject to review and potential recalculation by ED.
See “Business - Education Regulations - Financial Responsibility Standards.” We have calculated the 90/10 Rule percentages for the 2024, 2023, and 2022 fiscal years as follows for HDMC, CCC, and Integrity: HDMC 87.55%, 84.53%, and 82.17%; CCC 79.51%, 74.48%, and 72.34%; Integrity 84.19%, 88.14%, and 85.43% respectively.
If our institutions open new campuses or add or change new educational programs, we may be required to obtain approvals from ED and our state and accrediting agencies. 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.
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.
If the costs of Title IV loans increase and if availability of alternate student financial aid decreases, students may decide not to enroll in a postsecondary institution, including our institutions.
Enrollment of students at our institutions is impacted by many of the regulatory risks discussed above and business risks discussed below, many of which are beyond our control. If the costs of Title IV loans increase and if availability of alternate student financial aid decreases, students may decide not to enroll in a postsecondary institution, including our institutions.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research reports about our business, our stock price and trading volume could decline. The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business, our market and our competitors.
The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business, our market and our competitors. If no or few securities or industry analysts cover our company, the trading price for our common stock would be negatively impacted.
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.
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.
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.
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. 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.
Negative trends in the real estate market could impact the costs related to teaching out campuses and the success of our initiatives to reduce our real estate obligations. Finally, our transformation strategy may not achieve the anticipated cost savings and business efficiencies. Our financial performance depends, in part, on our ability to keep pace with changing market needs and technology.
Finally, our transformation strategy may not achieve the anticipated cost savings and business efficiencies. 73 Our financial performance depends, in part, on our ability to keep pace with changing market needs and technology.
An increase in competition could affect the success of our recruiting efforts or cause us to reduce our tuition rates and increase our marketing and other recruiting expenses, which could adversely impact our profitability and cash flows. 56 Our financial performance depends on our ability to develop awareness among, and enroll and retain, students in our institutions and programs in a cost effective manner.
An increase in competition could affect the success of our recruiting efforts or cause us to reduce our tuition rates and increase our marketing and other recruiting expenses, which could adversely impact our profitability and cash flows.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeBelow is a table summarizing our leased properties as of June 30, 2024: Number of Buildings Location Total Square Footage Lease Expiration 1 Bakersfield, CA 26,515 2026 1 Lancaster, CA 29,096 2026 1 Temecula, CA 15,703 2026 2 Salinas, CA 22,693 2026 & 2027 1 Pasadena, CA 8,879 2025 & 2027 Our facilities are utilized consistent with management’s expectations, and we believe such facilities are suitable and adequate for current requirements and that additional space can be obtained on commercially reasonable terms to meet any future requirements.
Biggest changeBelow is a table summarizing our leased properties as of June 30, 2025: Number of Buildings Location Total Square Footage Lease Expiration 1 Bakersfield, CA 26,515 2026 1 Lancaster, CA 28,316 2025 1 Temecula, CA 16,852 2031 2 Salinas, CA 47,892 2027 & 2032 1 Pasadena, CA 8,879 2025 & 2027 1 Antioch, CA 32,235 2035 Our facilities are utilized consistent with management’s expectations, and we believe such facilities are suitable and adequate for current requirements and that additional space can be obtained on commercially reasonable terms to meet any future requirements.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 63 PART II
Biggest changeWe are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 79 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis number of holders of record also does not include stockholders whose shares may be held in trust by other entities. Dividend Policy We have paid cash dividends on our capital stock in 2023, however, we do not anticipate paying any cash dividends on our common stock in the foreseeable future.
Biggest changeThis number of holders of record also does not include stockholders whose shares may be held in trust by other entities. Dividend Policy While we have previously paid cash dividends on our capital stock, we do not anticipate paying any cash dividends on our common stock in the foreseeable future.
Issuer Purchases of Equity Securities None. ITEM 6. [RESERVED]
Issuer Purchases of Equity Securities None. ITEM 6. [RESERVED] 80
We intend to retain future earnings to fund ongoing operations and future capital requirements. Any future determination to pay cash dividends will be at the discretion of our board of directors and will be dependent upon financial condition, results of operations, capital requirements and such other factors as the board of directors deems relevant. Recent Sales of Unregistered Securities None.
We intend to retain future earnings to fund ongoing operations and future capital requirements. Any future determination to pay cash dividends will be at the discretion of our board of directors and will be dependent upon financial condition, results of operations, capital requirements and such other factors as the board of directors deems relevant.
Stockholders As of September 26, 2024, there were approximately 85 stockholders of record of our common stock. The actual number of holders of our common stock is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or held by other nominees.
Stockholders As of September 22, 2025, there were approximately 31 stockholders of record of our common stock. The actual number of holders of our common stock is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or held by other nominees.
Added
Recent Sales of Unregistered Securities In August 2024, we issued 76,000 shares of common stock upon exercise of options.
Added
On December 18, 2024, we issued 118,906 shares of our common stock to Equiniti Trust Company, LLC (“Equiniti”), as escrow agent for CCMCC, pursuant to the that certain Stock Escrow Agreement by and among the Buyer, CCMCC and Equiniti dated as of December 18, 2024. The issuances above were made pursuant to Section 4(a)(2) of the Securities Act.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCash Flow Activities for the Years Ended June 30, 2024 and 2023 Operating activities Net cash provided by operating activities was approximately $1.6 million in fiscal year 2024, and net cash provided in operating activities was approximately $1.8 million in fiscal 2023 primarily due to timing of student payments and financial aid processing Investing activities Net cash used in investing activities was approximately $0.4 million in fiscal year 2024 and approximately $0.2 million in fiscal year 2023, a decrease of approximately $0.2 million due primarily to investments relating to our student labs.
Biggest changeInvesting activities Net cash used in investing activities was approximately $7.0 million in fiscal year 2025 and approximately $0.4 million in fiscal year 2024, an increase of approximately $6.6 million due primarily to cash paid for the acquisition of CCMCC.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the assets.
The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the assets.
While we enroll students throughout the year, our second quarter revenue generally is lower than other quarters due to the holiday season. Critical Accounting Policies and Use of Estimates The discussion of our financial condition and results of operations is based upon our annual consolidated financial statements, which have been prepared in accordance with GAAP.
While we enroll students throughout the year, our second quarter revenue generally is lower than other quarters due to the holiday season. 84 Critical Accounting Policies and Use of Estimates The discussion of our financial condition and results of operations is based upon our annual consolidated financial statements, which have been prepared in accordance with GAAP.
Revenue associated with lab services is recognized over the period of time when the service is performed. 66 Enrollments Enrollments are a function of the number of continuing students at the beginning of each period and new enrollments during the period, offset by students who either graduated or withdrew during the period. Costs and expenses Educational service.
Revenue associated with lab services is recognized over the period of time when the service is performed. Enrollments Enrollments are a function of the number of continuing students at the beginning of each period and new enrollments during the period, offset by students who either graduated or withdrew during the period. Costs and expenses Educational service.
We did not incur any benefits related to federal funds directly resulting from COVID-19 programs in each of the fiscal years ended June 30, 2024 or 2023. Key Financial Metrics Revenue Tuition revenue is primarily derived from postsecondary education services provided to students.
We did not incur any benefits related to federal funds directly resulting from COVID-19 programs in each of the fiscal years ended June 30, 2025 or 2024. 83 Key Financial Metrics Revenue Tuition revenue is primarily derived from postsecondary education services provided to students.
We had no long-lived asset impairments as of June 30, 2024 and 2023, respectively. Income taxes GAAP requires management to evaluate tax positions taken by us and recognize a tax liability if we have taken an uncertain position that is more likely than not would be sustained upon examination by the Internal Revenue Service.
The Company had no long-lived asset impairments as of June 30, 2025 and June 30, 2024. Income taxes GAAP requires management to evaluate tax positions taken by us and recognize a tax liability if we have taken an uncertain position that is more likely than not would be sustained upon examination by the Internal Revenue Service.
The amendments are effective for fiscal years beginning after December 15, 2019. Recently, the FASB issued the final ASU to delay adoption for smaller reporting companies for fiscal years beginning after December 15, 2022.
The amendments are effective for fiscal years beginning after December 15, 2019. Subsequently, the FASB issued the final ASU to delay adoption for smaller reporting companies for fiscal years beginning after December 15, 2022.
Capital expenditures were approximately $0.4 million and $0.2 million for fiscal year 2024 and fiscal year 2023, respectively. Title IV and other government funding A significant portion of our revenue is derived from student tuition payments funded by the Title IV Programs.
Capital expenditures were approximately $0.8 million and $0.4 million for fiscal year 2025 and fiscal year 2024, respectively. Title IV and other government funding A significant portion of our revenue is derived from student tuition payments funded by the Title IV Programs.
Results of Operations Fiscal Year Ended June 30, 2024 Compared to Fiscal Year Ended June 30, 2023 The following table sets forth our consolidated statements of income (loss) data as a percentage of revenue for the years ended June 30, 2024 and 2023: Year ended June 30, Percentage Change 2024 2023 (decrease) Revenue 100.0 % 100.0 % Costs and expenses: Educational services 57.2 % 58.6 % -1.4 % General and administrative 28.3 % 30.1 % -1.8 % General and administrative – related party 0.4 % 0.5 % -0.1 % Depreciation and amortization 0.6 % 0.6 % 0.0 % Total costs and expenses 86.5 % 89.8 % -3.3 % Operating income 13.5 % 10.2 % 3.3 % Interest expense, net -0.2 % -0.3 % 0.1 % Interest income 1.9 % 1.0 % 0.9 % Income before income taxes 15.2 % 10.9 % 4.3 % Income tax expense -4.1 % -3.4 % -0.7 % Net income 11.1 % 7.5 % 3.6 % Revenue .
Results of Operations Fiscal Year Ended June 30, 2025 Compared to Fiscal Year Ended June 30, 2024 The following table sets forth our consolidated statements of income (loss) data as a percentage of revenue for the years ended June 30, 2025 and 2024: Year ended June 30, Percentage Change 2025 2024 (decrease) Revenue 100 % 100.0 % Costs and expenses: Educational services 53.4 % 57.3 % -3.9 % General and administrative 30.0 % 28.3 % 1.7 % General and administrative – related party 0.4 % 0.4 % - % Depreciation and amortization 0.7 % 0.6 % 0.1 % Total costs and expenses 84.4 % 86.5 % -2.1 % Operating income 15.6 % 13.5 % 2.1 % Interest expense, net -0.2 % -0.3 % -0.1 % Interest income 1.8 % 1.9 % -0.1 % Income before income taxes 17.2 % 15.2 % 2.0 % Income tax expense -5.4 % -4.1 % 1.3 % Net income 11.7 % 11.1 % 0.6 % Revenue .
We adopted ASU 2016-13 on July 1, 2023 and it did not have a material impact on our consolidated financial statements and related disclosures. 71 In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.
The Company adopted ASU 2016-13 on July 1, 2023 and it did not have a material impact on its consolidated financial statements and related disclosures. 88 In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.
This expense reflects depreciation and amortization of property and equipment, amortization of assets under capital leases and amortization of intangible assets. Interest expense This expense reflects interest paid under notes issued to our investors, IRS interest, non-cash interest related to unit option grants, interest related to notes associated with CCC, and other debt related interest.
This expense reflects depreciation and amortization of property and equipment, amortization of assets under capital leases and amortization of intangible assets. Interest expense This expense reflects interest paid under notes issued to our investors, Internal Revenue Service interest, non-cash interest related to unit option grants, interest related to notes associated with CCC, and other debt related interest.
We had net income of approximately $5.1 million in fiscal 2024 compared to approximately $2.7 million in fiscal 2023, an increase of approximately $2.4 million, due to reason mentioned above. Liquidity and Capital Resources Our cash and cash equivalents were approximately $10.4 million and $9.3 million as of June 30, 2024, and June 30, 2023, respectively.
We had net income of approximately $7.5 million in fiscal 2025 compared to approximately $5.1 million in fiscal 2024, an increase of approximately $2.4 million, due to reasons mentioned above. Liquidity and Capital Resources Our cash and cash equivalents were approximately $20.3 million and $10.4 million as of June 30, 2025 and June 30, 2024, respectively.
Our interest expense was approximately $0.1 million in fiscal 2024 as compared to approximately $0.1 million in fiscal 2023. Income tax expense. Our income tax expense was approximately $1.9 million in fiscal 2024 compared to an approximately $1.2 million expense in fiscal 2023. The increase is primarily due to the increase in income. Net Income.
Our interest expense was approximately $0.1 million in fiscal 2025 as compared to approximately $0.1 million in fiscal 2024. Income tax expense. Our income tax expense was approximately $3.5 million in fiscal 2025 compared to an approximately $1.9 million expense in fiscal 2024. The increase is primarily due to the increase in income. Net Income.
The Company estimates the fair value of stock-based compensation awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s consolidated statements of operations.
The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s consolidated statements of operations. The Company estimates the fair value of stock-based compensation awards using the Black-Scholes model.
Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this Annual Report on Form 10-K.
Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this Annual Report on Form 10-K. All amounts in this report are in U.S. dollars, unless otherwise noted.
As a result, during the period ended June 30, 2020, we recorded the full amount of the PPP Loan received as other income.
As a result, during the period ended June 30, 2020, we recorded the full amount of the PPP Loan received as other income. We received forgiveness in full of the PPP Loan during the fiscal year ended June 30, 2021.
We determine the adequacy of our allowance for doubtful accounts based on an analysis of our historical bad debt experience, current economic trends, and the aging of the accounts receivable and student status. We apply reserves to our receivables based upon an estimate of the risk presented by the age of the receivables and student status.
The Company determines the adequacy of its allowance for doubtful accounts based on an analysis of its historical bad debt experience, current economic trends, and the aging of the accounts receivable and student status. The Company applies reserves to its receivables based upon an estimate of the risk presented by the age of the receivables and student status.
We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more, as such amount is indexed for inflation every five years by the Securities and Exchange Commission to reflect the change in the Consumer Price Index for All Urban Consumers during its most recently completed fiscal year; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission.
We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission.
During the fiscal year ended June 30, 2020, pursuant to the Payroll Protection Program (“PPP”) established under the CARES Act, we had obtained a loan in the amount of $1.4 million (“PPP Loan”).
The remaining balance of the ERTC receivable as of December 31, 2023 was $47,000. During the fiscal year ended June 30, 2020, pursuant to the Payroll Protection Program (“PPP”) established under the CARES Act, we had obtained a loan in the amount of $1.4 million (“PPP Loan”).
Of the total general and administrative expense, $4.1 million and $3.5 million related to sales and marketing expense for fiscal 2024 and 2023, respectively. Depreciation and amortization. Our depreciation and amortization expense was approximately $0.3 million in fiscal 2024 as compared to approximately $0.2 million in fiscal 2023. 69 Interest expense .
Of the total general and administrative expense, $4.7 million and $4.1 million relate to marketing expenses for fiscal 2025 and 2024, respectively. Depreciation and amortization. Our depreciation and amortization expense was approximately $0.4 million in fiscal 2025 as compared to approximately $0.3 million in fiscal 2024. Interest expense .
Our revenue was approximately $46.0 million in fiscal 2024 compared to approximately $35.5 million in fiscal 2023, an increase of approximately $10.5 million, or approximately 29.7%. The increase was primarily due to increased student enrollment and the increase in pricing of certain programs. Educational services .
Our revenue was approximately $64.2 million in fiscal 2025 compared to approximately $46.0 million in fiscal 2024, an increase of approximately $18.2 million, or approximately 39.5%. The increase was primarily due to increased student enrollment and the increase in pricing of certain programs. 86 Educational services .
Our educational service expense was approximately $26.4 million in fiscal 2024 compared to approximately $20.8 million in fiscal 2023, an increase of approximately $5.6 million, or approximately 26.8%.
Our educational service expense was approximately $34.2 million in fiscal 2025 compared to approximately $26.4 million in fiscal 2024, an increase of approximately $7.8 million, or approximately 29.5%.
Corporations are not subject to the state’s franchise tax, but they are subject to the alternative minimum tax (“AMT”) of 6.65%, which limits the effectiveness of a business writing off expenses against income to lower its corporate tax rate. C-corporations pay the state corporate tax of 8.84% or AMT of 6.65%, depending on whether they claim net taxable income.
Corporations are not subject to the state’s franchise tax, but they are subject to the alternative minimum tax (“AMT”) of 6.65%, which limits the effectiveness of a business writing off expenses against income to lower its corporate tax rate.
We received forgiveness in full of the PPP Loan during the fiscal year ended June 30, 2021. 65 The CARES Act also contained separate educational provisions that relieved both institutions and students from complying with the requirement to return certain Title IV Program funds following a student’s withdrawal as a result of the COVID-19 emergency.
The CARES Act also contained separate educational provisions that relieved both institutions and students from complying with the requirement to return certain Title IV Program funds following a student’s withdrawal as a result of the COVID-19 emergency.
Our general and administrative expense was approximately $13.0 million in fiscal 2024, compared to approximately $10.7 million in fiscal 2023, an increase of approximately $2.3 million, or approximately 22.0%. The increase was primarily related increased marketing and bad debt expense.
Our general and administrative expense was approximately $19.3 million in fiscal 2025, compared to approximately $13.0 million in fiscal 2024, an increase of approximately $6.3 million, or approximately 48.2%. The increase was primarily attributable to an increase in marketing expense, professional fees and bad debt expense.
Treasury securities with a maturity equivalent to the expected term of the options. The Company accounts for forfeitures upon occurrence. Goodwill and Other Indefinite-lived Assets We test goodwill and other indefinite-lived assets for impairment at least annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired.
Goodwill and Other Indefinite-lived Assets We test goodwill and other indefinite-lived assets for impairment at least annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired.
We write off account receivable balances of inactive students at the earlier of the time the balances were deemed uncollectible, or one year after the revenue is generated. Bad debt expense is recorded as a general and administrative expense in the income statement. The Company performs an analysis annually to determine which accounts are uncollectable and write them off.
The Company writes off account receivable balances of inactive students at the earlier of the time the balances were deemed uncollectible, or one year after the revenue is generated. Bad debt expense is recorded as a general and administrative expense in the accompanying statements of operations.
We account for income taxes payable or refundable for the current year and deferred tax assets and liabilities for future tax consequences of events that have been recognized in our financial statements or tax returns.
C-corporations pay the state corporate tax of 8.84% or AMT of 6.65%, depending on whether they claim net taxable income. 85 We account for income taxes payable or refundable for the current year and deferred tax assets and liabilities for future tax consequences of events that have been recognized in our financial statements or tax returns.
Financing activities Net cash used in financing activities was approximately $0.2 million in fiscal year 2024 due to repayments f of debt.
Financing activities Net cash used provided by financing activities was approximately $9.1 million in fiscal year 2025 primarily due to proceeds from the Company’s IPO. Net cash used in financing activities was approximately $0.2 million in fiscal year 2024 due to repayments of debt.
There can be no assurance that future inflation will not have an adverse impact on our operating results and financial condition. Segment Information We operate in one reportable segment as a single educational delivery operation using a core infrastructure that serves the curriculum and educational delivery needs of our institution’s students regardless of geography.
Segment Information We operate in one reportable segment as a single educational delivery operation using a core infrastructure that serves the curriculum and educational delivery needs of our institution’s students regardless of geography.
Significant items subject to such estimates and assumptions include the evaluation of the Company’s distinct performance obligations, the valuation of equity instruments and valuation allowances for credit losses related to accounts receivable. 67 Allowance for credit losses We record an allowance for doubtful credit losses for estimated losses resulting from the inability, failure or refusal of our students to make required payments, which includes the recovery of financial aid funds advanced to a student for amounts in excess of the student’s cost of tuition and related fees.
Allowance for Credit Losses The Company records an allowance for credit losses for estimated losses resulting from the inability, failure or refusal of its students to make required payments, which includes the recovery of financial aid funds advanced to a student for amounts in excess of the student’s cost of tuition and related fees.
Lease expense did not change materially as a result of the adoption of ASU 2016-02. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 provides guidance for recognizing credit losses on financial instruments based on an estimate of current expected credit losses model.
Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 provides guidance for recognizing credit losses on financial instruments based on an estimate of current expected credit losses model.
During the fiscal year ended June 30, 2021, we applied for certain Employee Retention Credits (“ERTC”) under the CARES Act in the approximate $2.9 million, which was reflected within the statement of operations as a reduction to educational services expense. The remaining balance of the ERTC receivable as of December 31, 2023 was $47,000.
The failure to comply with requirements for the usage and reporting of these funds could result in requirements to repay some or all of the allocated funds and in other sanctions. 82 During the fiscal year ended June 30, 2021, we applied for certain Employee Retention Credits (“ERTC”) under the CARES Act in the approximate $2.9 million, which was reflected within the statement of operations as a reduction to educational services expense.
Impairment of long-lived assets We evaluate the recoverability of our long-lived assets for impairment, other than goodwill, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
The Company performs an analysis annually to determine which accounts are uncollectable and then writes them off. Long-Lived Assets The Company evaluates the recoverability of its long-lived assets for impairment, other than goodwill, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the temporary differences are expected to be realized. 68 Share Based Compensation The Company utilizes ASC 718, Stock Compensation, related to accounting for share-based payments and, accordingly, records compensation expense for share-based awards based upon an assessment of the grant date fair value for stock options and restricted stock awards.
Share Based Compensation The Company utilizes ASC 718, Stock Compensation, related to accounting for share-based payments and, accordingly, records compensation expense for share-based awards based upon an assessment of the grant date fair value for stock options and restricted stock awards. The Company estimates the fair value of stock-based compensation awards on the date of grant using an option-pricing model.
For additional information regarding our business and our academic institutions, see “Business.” Key operating data In evaluating our operating performance, our management focuses in large part on our revenue and income before income taxes and period-end enrollment at our academic institutions.
As of June 30, 2025, CCMCC had 448 students enrolled in its programs. 81 Key operating data In evaluating our operating performance, our management focuses in large part on our revenue and income before income taxes and period-end enrollment at our academic institutions.
This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends the related earnings per share guidance for both Subtopics.
This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity and also improves and amends the related EPS guidance for both Subtopics. The Company adopted ASU 2020-06 on July 1, 2024 and it did not have a material impact on its consolidated financial statements and related disclosures.
The Company estimates the fair value of stock-based compensation awards using the Black-Scholes model. This model requires the Company to estimate the expected volatility and value of its common stock and the expected term of the stock options, all of which are highly complex and subjective variables.
This model requires the Company to estimate the expected volatility and value of its common stock and the expected term of the stock options, all of which are highly complex and subjective variables. The expected life was calculated based on the simplified method as described by the SEC Staff Accounting Bulletin No. 110, Share-Based Payment.
These qualified expenses were reflected on the statement of operations as reductions to general and administrative expenses. The failure to comply with requirements for the usage and reporting of these funds could result in requirements to repay some or all of the allocated funds and in other sanctions.
These qualified expenses were reflected on the statement of operations as reductions to general and administrative expenses.
Financial responsibility Based on the most recent fiscal year-end financial statements, we satisfied the composite score requirement of the financial responsibility test which institutions must satisfy in order to participate in the Title IV Programs.
Financial responsibility Based on the most recent fiscal year-end financial statements, we satisfied the composite score requirement of the financial responsibility test which institutions must satisfy in order to participate in the Title IV Programs. 87 Cash Flow Activities for the Years Ended June 30, 2025 and 2024 Operating activities Net cash provided by operating activities was approximately $7.8 million in fiscal year 2025, and net cash provided in operating activities was approximately $1.6 million in fiscal 2024 primarily due to an increase to net income of $2.4 million and the increase in collections related to accounts receivable in fiscal 2025.
The increase is primarily a result of increased instructional and staffing required to support the increase in enrollments as well as a non-cash compensation charge of approximately $1.9 million related to a stock option grant, of which, approximately $1.8 million pertain to options that vested immediately upon the granting of the award. General and administrative expense .
The increase was primarily attributable to the increased instructional and staffing required to support the increase in enrollments as well as increased rent and externship fees and our investments in our RN program offset by a decrease in non-cash compensation charge of $1.3 million. General and administrative expense .
The expected life was calculated based on the simplified method as described by the SEC Staff Accounting Bulletin No. 110, Share-Based Payment. The Company’s estimate of expected volatility was based on the volatility of peers. The Company has selected a risk-free rate based on the implied yield available on U.S.
The Company’s estimate of expected volatility was based on the volatility of peers. The Company has selected a risk-free rate based on the implied yield available on U.S. Treasury securities with a maturity equivalent to the expected term of the options. The Company accounts for forfeitures upon occurrence.
Removed
All amounts in this report are in U.S. dollars, unless otherwise noted. 64 Overview We are a provider of postsecondary education services through our accredited academic institutions, HDMC, CCC and Integrity. As of June 30, 2024, we enrolled 2,166 students.
Added
Overview We provide career-focused, post-secondary education services to students at all stages of adult life, from recent high school graduates to working parents, through our accredited academic institutions: High Desert Medical College, which we acquired in July 2010, Central Coast College, which we acquired in January 2019, Contra Costa Medical Career College, which we acquired in December 2024, and Integrity College of Health.
Removed
We anticipate general and administrative expense will continue to increase as our business continues to move towards decentralization, reflecting (i) that we are now more corporate and campus-based, with additional management overseeing various campuses, and (ii) additional professional fees as we pursue acquisitions of new institutions.
Added
On December 31, 2019, we entered into a Membership Interest Purchase Agreement with the sole member of Integrity. We purchased from the sole member of Integrity on that date 24.5% of her interest and obtained an exclusive option to acquire her remaining membership interest upon payment of $100, which was exercised on September 15, 2020.
Removed
Net cash used in financing activities was approximately $1.1 million in fiscal year 2023 mostly due to dividends paid. 70 Financings ● From July 2021 to September 2021, the Company issued 108,333 shares of common stock to investors at a purchase price of $3.00 per share for total proceeds of $325,000. ● From July 2022 to June 2023, the Company issued dividends of $929,116 ● From July 2023 to June 2024, the Company issued dividends of $0 Impact of Inflation We believe that inflation has not had a material impact on our results of operations for the fiscal years ended 2024 and 2023.
Added
For purposes of our financial statements, the acquisition of Integrity is deemed to have been effective as of December 31, 2019. As of June 30, 2025, we enrolled 3,101 students. High Desert Medical College HDMC was established in the State of California in 2002 and began offering classes in 2003.
Removed
Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under current GAAP.
Added
It started with campuses in Lancaster, California, and added its first branch in 2008 in Bakersfield, California. Due to enrollment growth and high demand for its services, HDMC expanded to add a branch campus in Temecula, California in order to accommodate 250 to 400 additional students.
Removed
ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 is effective for fiscal years beginning after December 15, 2021, using a modified retrospective approach and early adoption is permitted.
Added
HDMC offers UT, VN, VN Associate of Applied Science degree program, Associate Degree of Nursing, nursing assistant, MRI Associate of Applied Science, cardiac sonography, pharmacy technician, dental assisting, clinical medical assisting, medical administrative assisting programs, medical billing and coding, veterinary assistant, phlebotomy technician avocational, nursing assistant avocational, UT Associate of Applied Science degree programs, and an EMT program.
Removed
The Company adopted ASU 2016-02 on July 1, 2022. The Company has elected to apply the short-term scope exception for leases with terms of 12 months or less at the inception of the lease and will continue to recognize rent expense on a straight-line basis.
Added
HDMC also has obtained approval ACCET to offer a surgical technology Associate of Applied Science program and sterile processing technician program and plans to begin doing so in October 2025, pending receipt of approval from the BPPE and ED. As of June 30, 2025, HDMC had 1,956 students enrolled in its programs.
Removed
As a result of the adoption, on July 1, 2022, the Company recognized a lease liability of approximately $5.7 million, which represented the present value of the remaining minimum lease payments using an estimated incremental borrowing rate of 3.98%. As of July 1, 2022, the Company recognized a right-to-use asset of approximately $5.3 million.
Added
Central Coast College 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.
Removed
The ASU will be effective for smaller reporting companies for annual reporting periods beginning after December 15, 2023 and interim periods within those annual periods and early adoption is permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements. JOBS Act On April 5, 2012, the JOBS Act was enacted.
Added
CCC offers the following certificate or degree programs: business administrative specialist, 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 and pharmacy technician. CCC also offers an avocational phlebotomy technician program.
Added
CCC also has obtained approval from ACCET to offer an MRI Associate of Applied Science Program and cardiac sonography Associate of Applied Science programs and plans to begin doing so in October 2025, pending receipt of additional approvals. As of June 30, 2025, CCC had 495 students enrolled in its programs.
Added
Integrity College of Health Integrity was established in the State of California in 2007. Integrity’s campus is located in Pasadena, California. Integrity offers VN, VN Associate of Applied Science, RN to BSN, medical assisting, medical billing and coding, veterinary assistant, and Diagnostic Medical Sonography programs.
Added
Integrity also plans to offer an EMT program beginning in early 2026 and is in the process of obtaining approvals for the program (for which Integrity is not planning for ED approval to make Title IV funds available for students who enroll in the program).
Added
For purposes of our financial statements, Legacy Education, L.L.C. is deemed to have acquired Integrity in December 2019. As of June 30, 2025, Integrity had 202 students enrolled in its programs.
Added
Contra Costa Medical Career College CCMCC offers the following certificate and degree programs: surgical technology (Associate of Applied Science), sterile processing technician, pharmacy technician, diagnostic medical sonography, medical assisting with phlebotomy, dental assisting, vocational nursing, clinical medical assisting, EKG/ECG technician, medical administrative assistant/billing and coding specialist and medical assisting and phlebotomy avocational.
Added
Significant items subject to such estimates and assumptions include the evaluation of the Company’s distinct performance obligations, the valuation of equity instruments and valuation allowances for credit losses related to accounts receivable.
Added
Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the temporary differences are expected to be realized.
Added
Financings ● From July 2024 to September 2024, the Company issued 2,500,000 shares of common stock in its initial public offering at a price of $4.00 per share for gross proceeds of $10,000,000. ● From October 2024 to December 2024, the Company issued 375,000 shares of common stock pursuant to the exercise of the over-allotment option by the underwriters in connection with the initial public offering at a price of $4.00 per share for gross proceeds of $1,500,000.
Added
Impact of Inflation We believe that inflation has not had a material impact on our results of operations for the fiscal years ended 2025 and 2024. There can be no assurance that future inflation will not have an adverse impact on our operating results and financial condition.
Added
In November 2023, the FASB issued ASU 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires incremental disclosures related to a public entity’s reportable segments.
Added
Required disclosures include, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount for other segment items (which is the difference between segment revenue less segment expenses and less segment profit or loss) and a description of its composition, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.
Added
The standard also permits disclosure of more than one measure of segment profit. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. There are aspects of ASU 2023-07 that apply to entities with one reportable segment.
Added
The Company adopted this guidance in the fiscal fourth quarter of 2025. The adoption of ASU 2023-07 is reflected in Note 2 to our audited consolidated financial statements included herein, “Summary of Significant Accounting Policies - Segment Reporting.”. JOBS Act On April 5, 2012, the JOBS Act was enacted.