INTRODUCTION

You need to learn the next dialogue of our monetary situation and outcomes
of operations with our audited consolidated monetary statements and associated
notes thereto included in our Annual Report on Kind 10-Okay for the fiscal 12 months
ended December 31, 2020. This dialogue incorporates forward-looking statements and
entails quite a few dangers, uncertainties, assumptions and different vital components
that might trigger the precise outcomes, efficiency or our achievements, or
trade outcomes, to vary materially from historic outcomes, any future
outcomes, or efficiency or achievements expressed or implied by such
forward-looking statements. See “Cautionary Assertion Relating to Ahead-Wanting
Info.”

Enterprise Overview

We’re a supplier of sensible, high-quality, and value-based instructional
coaching on the subjects of private finance, entrepreneurship, actual property, and
monetary markets investing methods and methods. Our applications are provided
by a wide range of codecs and channels, together with free workshops, fundamental
trainings, boards, phone mentoring, one-on-one mentoring, teaching and
e-learning. Through the six months ended June 30, 2021, we marketed our merchandise
and providers below our Constructing Wealth with LegacyTM model. Through the 12 months
ended December 31, 2020, we marketed our services and products below two manufacturers:
Constructing Wealth with LegacyTM; and Home made Investor by Tarek El MoussaTM.

Our college students pay for his or her programs in full up-front or by cost
agreements with impartial third events. Beneath United States of America
usually accepted accounting rules (“U.S. GAAP”), we acknowledge income
upon the sooner of (i) when our college students take their programs or (ii) the time period
for taking their course expires, each of which may very well be a number of quarters after
the coed purchases a program and pays the price. We acknowledge income
instantly once we promote our (i) proprietary merchandise delivered at time of sale
and (ii) third get together merchandise gross sales. Our symposiums and boards mix a number of
superior coaching programs in a single location, permitting us to attain sure
economies of scale that cut back prices and enhance margins whereas additionally accelerating
U.S. GAAP income recognition, whereas on the identical time, enhancing our college students’
expertise, notably, for instance, by the chance to community with
different college students.

We additionally present a richer expertise for our college students by one-on-one
mentoring (two to a few days in size, on website or remotely, though we
briefly suspended offering on-site mentorships because of the COVID-19
pandemic) and phone mentoring (10 to 16 weekly one-on-one or one-on-many
phone classes). Through the third quarter of 2021, we now have resumed offering
on-site mentorships on a restricted foundation. Mentoring entails a subject
skilled interacting with the coed remotely or in particular person and guiding the
scholar, for instance, by his or her first actual property transaction,
offering an actual hands-on expertise.

We have been based in 1996, and thru a reverse merger, grew to become a publicly-held
firm in November 2014. In the present day we’re a world firm that has cumulatively
served greater than two million college students from greater than 150 nations and
territories over the course of our working historical past.

Traditionally, our operations have relied closely on our and our college students’
potential to journey and attend stay occasions the place giant teams of individuals collect in
native markets inside every of the segments wherein we function. In March 2020, as
a results of the COVID-19 pandemic, and the ensuing worldwide restrictions on
journey and social distancing, we briefly ceased conducting stay gross sales and
success and furloughed considerably all of our workers. We resumed on-line
operations in July 2020, and stay operations on a restricted foundation in November
2020. The Firm expects to conduct extra stay occasions as lockdown
restrictions proceed to ease and hopes to return to a standard schedule over the
coming months. The Firm will proceed following strict security protocols at
the stay occasions. We’ve simplified our product choices and restructured our
compensation program with respect to each workers and impartial contractors
to cut back prices and enhance margins, however there may be no assurances that the
Firm will probably be efficient in promoting its services and products, or what the
impression of such actions could have on our monetary efficiency. We aren’t
in a position to absolutely quantify the impression that these components could have on our monetary
outcomes, however count on developments associated to COVID-19 to proceed to have an effect on the
Firm’s monetary efficiency in 2021 and past.

Our operations are managed by three working segments: (i) North America,
(ii) United Kingdom, and (iii) Different Overseas Markets.

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Since January 1, 2020, we now have operated below two manufacturers:

? Constructing Wealth with LegacyTM: supplies sensible, high-quality and value-based

instructional coaching on the subjects of private finance, entrepreneurship, actual

property, monetary markets and investing methods and methods. This

coaching program encompasses hands-on expertise and the true spirit of

investing from newbie to educated investor. Within the fourth quarter of 2020,

the Firm started transitioning to its proprietary model identify Constructing Wealth

with LegacyTM. Through the six months ended June 30, 2021, we marketed our

services and products completely below this model.

? Home made Investor by Tarek El MoussaTM introduces individuals to the investor

mindset, actual property investing methods, and methods to generate money circulation that

are designed to assist construct a basis of data for his or her monetary

targets. Home made Investor occasions provided free workshops nationwide, 3-day

trainings and huge stage occasions with Tarek presenting because the keynote speaker,

all promoting into our superior coaching merchandise. In November 2020, we

suspended conducting Home made Investor by Tarek El MoussaTM gross sales occasions to

deal with growing our proprietary Constructing Wealth with LegacyTM model.

Latest Developments

Affect from COVID-19 Pandemic.

Traditionally, our operations have relied closely on our and our college students’
potential to journey and attend stay occasions the place giant teams of individuals collect in
native markets inside every of the segments wherein we function. On March 11,
2020, the World Well being Group (WHO) declared the COVID-19 outbreak as a
pandemic. Because of worldwide restrictions on journey and social distancing,
in March 2020 we briefly ceased conducting stay gross sales and success and
furloughed considerably all of our workers. We resumed gross sales operations in
June 2020 with on-line gross sales occasions promoting into our suite of on-line, on-demand,
and over-the-phone merchandise. We additionally resumed on-line, on-demand, and
over-the-phone success actions in June 2020. We resumed stay operations
on a restricted foundation, in November 2020, with occasions in Florida. The Firm
expects to conduct extra stay occasions in different areas as lockdown
restrictions proceed to ease and hopes to return to a standard schedule over the
coming months. The Firm will proceed following strict security protocols at
the stay occasions. We’ve simplified our product choices and restructured our
compensation program with respect to each workers and impartial contractors
to cut back prices and enhance margins, however there may be no assurances that the
Firm will probably be efficient in promoting its services and products, or what the
impression such actions could have on our monetary efficiency.

The final word impression from COVID-19 on the Firm’s operations and monetary
outcomes will rely upon, amongst different issues, the final word severity and scope of
the pandemic, the efficacy and public acceptance of the assorted vaccinations
in opposition to COVID-19, the tempo at which governmental and personal journey restrictions
and public considerations about public gatherings will ease, the speed at which
traditionally giant will increase in unemployment charges will lower, if in any respect, and
the pace with which the economic system recovers. We aren’t in a position to absolutely quantify the
impression that these components could have on our monetary outcomes, however count on
developments associated to COVID-19 to proceed to have an effect on the Firm’s monetary
efficiency in 2021 and past.

Second Draw Paycheck Safety Program Notice Settlement

On April 20, 2021, Elite Legacy Training, Inc (ELE), a wholly-owned subsidiary
of the Firm, closed on an unsecured Paycheck Safety Program Notice
settlement (the “Promissory Notice”) to borrow $1,899,832 from Cross River Financial institution,
the lender, pursuant to the Paycheck Safety Program (“PPP”), initially
created below the Coronavirus Assist, Reduction, and Financial Safety Act, or CARES
Act, and prolonged to “Second Draw” PPP loans as described under. The PPP is
supposed to offer loans to certified companies to cowl payroll and sure
different recognized prices. Funds from the mortgage might solely be used for sure
functions, together with payroll, advantages, hire, utilities, and sure lined
working bills. All or a portion of the mortgage could also be forgivable, as supplied
by the phrases of the PPP. The Second Draw PPP Mortgage has an rate of interest of 1.0%
every year and a time period of 60 months. Funds will probably be deferred in accordance with
the CARES Act, as modified by the Paycheck Safety Program Flexibility Act of
2020; nevertheless, curiosity will accrue in the course of the deferral interval. If all or any
portion of the mortgage shouldn’t be forgiven in accordance with the phrases of this system,
ELE will probably be obligated to make month-to-month funds of principal and curiosity in
quantities to be calculated after the quantity of mortgage forgiveness, if any, is
decided to repay the stability of the mortgage in full previous to maturity. The
Promissory Notice incorporates customary occasions of default referring to, amongst different
issues, cost defaults and breaches of representations. ELE might prepay the
mortgage at any time previous to maturity with no prepayment penalties.

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Adjustments in Administration and Board of Administrators

On March 8, 2021, the Firm’s Board of Administrators (the “Board”) elected Michel
Botbol, 61, as a Director, Chairman of the Board, and Chief Govt Officer of
the Firm. On the identical date, the Board appointed James E. Could, 66, as Basic
Counsel of the Firm, a place he held previous to his appointment as Interim
CEO of the Firm in January 2019. Upon the belief of his place as
Basic Counsel, Mr. Could resigned as Director and Chief Govt Officer.

On Could 3, 2021, the Board of Administrators set the variety of director seats on the
Firm’s Board of Administrators at 4 (4) and appointed Barry M. Kostiner, 49, to
the Board. Mr. Kostiner is President of, and holds a 25% membership curiosity in,
Legacy Tech Companions, LLC (LTP).

Outcomes of Operations

Our monetary ends in the second quarter of 2021 have been negatively impactec by
the COVID-19 pandemic, slower than we anticipated institution of our new
Home made Investor model, in addition to the impact of winding down our Wealthy Dad
model and different issues as disclosed within the litigation part of Notice 13
“Commitments and Contingencies” within the Notes to Consolidated Monetary
Statements.

Our Outcomes of Operations in 2021 and 2020 have been as follows:

Three Months Ended Six Months Ended
June 30, June 30,

(in 1000’s, besides per share knowledge) 2021 2020 2021 2020
Income

$ 3,362 $ 5,765 $ 5,982 $ 14,125

Working prices and bills:
Direct course bills 790 1,155 1,224 3,843
Promoting and gross sales bills 556 171 614 1,913
Royalty bills – 3 – 59
Basic and administrative bills 1,398 1,021 2,396 2,478
Whole working prices and bills 2,744 2,350 4,234 8,293
Revenue from operations 618 3,415 1,748 5,832

Different expense:
Curiosity expense, web (386 ) (20 ) (386 ) (103 )
Different expense, web (1 ) (33 ) (3 ) (7 )
Whole different expense, web (387 ) (53 ) (389 ) (110 )
Revenue from persevering with operations earlier than
revenue taxes 231 3,362 1,359 5,722
Revenue tax (expense) profit 131 (1,122 ) (915 ) (995 )
Web revenue from persevering with operations 362 2,240 444 4,727
Revenue from discontinued operations – 1,563 171 2,109
Web revenue from discontinued operations – 1,563 171 2,109
Web revenue $ 362 $ 3,803 $ 615 $ 6,836

Fundamental earnings per widespread share –
persevering with operations $ 0.01 $ 0.09 $ 0.02 $ 0.21
Fundamental earnings per widespread share –
discontinued operations – 0.07 – 0.09
Fundamental earnings per widespread share $ 0.01 $ 0.16 $ 0.02 $ 0.30

Diluted earnings per widespread share –
persevering with operations $ 0.01 $ 0.09 $ 0.02 $ 0.20
Diluted earnings per widespread share –
discontinued operations – 0.07 – 0.09

Diluted earnings per widespread share $ 0.01 $ 0.16 $ 0.02 $ 0.29

Fundamental weighted common widespread shares
excellent 25,113 23,017 24,156 23,001
Diluted weighted common widespread shares
excellent 31,843 23,163 30,048 23,163

Complete revenue:
Web revenue $ 362 $ 3,803 $ 615 $ 6,836
Overseas foreign money translation
changes, web of tax of $0 (52 ) (682 ) 51 1,228
Whole complete revenue $ 310 $ 3,121 $ 666 $ 8,064

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Our working outcomes are expressed as a share of income within the desk
under:

Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
Income 100 % 100 % 100 % 100 %

Working prices and bills:
Direct course bills 23.5 20.0 20.5 27.2
Promoting and gross sales bills 16.5 3.0 10.3 13.5
Royalty bills – 0.1 0.0 0.4
Basic and administrative bills 41.6 17.7 40.1 17.5
Whole working prices and bills 81.6 40.8 70.9 58.6
Revenue from operations 18.4 59.2 29.1 41.4

Different expense:
Curiosity expense, web (11.5 ) (0.3 ) (6.4 ) (0.7 )
Different expense, web – (0.6 ) – (0.1 )
Whole different expense, web (11.5 ) (0.9 ) (6.4 ) (0.8 )
Revenue from persevering with operations earlier than
revenue taxes 6.9 58.3 22.7 40.6
Revenue tax (expense) profit 3.9 (19.4 ) (15.3 ) (7.1 )
Web revenue from persevering with operations 10.8 38.9 7.4 33.5
Revenue from discontinued operations – 27.1 2.9 14.9
Web revenue from discontinued operations – 27.1 2.9 14.9
Web revenue 10.8 % 66.0 % 10.3 % 48.4 %

Outlook

Money gross sales have been $0.7 million for the six months ended June 30, 2021 in comparison with
$3.Three million for the six months ended June 30, 2020, a lower of $2.6 million
or 80.0%. The lower was pushed by a $2.6 million lower in our North
American section.

We imagine that money gross sales stay an vital metric when evaluating our
working efficiency. Pursuant to U.S. GAAP, we acknowledge income upon the
earlier of (i) when our college students take their programs or (ii) the time period for taking
their course expires, each of which may very well be a number of quarters after the coed
purchases a program. Our college students pay for his or her programs in full up-front or
by cost agreements with impartial third events.

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