According to the U.S. Department of Education’s National Center for Education Statistics, or NCES, total student enrollment in degree-granting colleges and universities in 2005 was 17.4 million. The Chronicle of Higher Education has reported that there remain significant opportunities for increasing postsecondary enrollments, as two-thirds of American adults do not have at least an associate degree.

In 2007, Eduventures, LLC, an education consulting and research firm, estimated that there were 1.5 million students enrolled in online programs at the end of 2006, representing approximately 8.6% of all students enrolled at U.S. degree-granting, Title IV eligible institutions. In December 2006, Eduventures estimated that by the end of 2008 online students will number around 2.1 million and that based on middle projections for higher education enrollments as a whole by the National Center for Education Statistics, online students will account for approximately 11.5% of all students in degree-granting institutions by 2008.

In 2006, Eduventures also projected that annual revenues generated from students enrolled in fully-online programs at Title IV eligible, degree-granting institutions would increase by more than 30% to reach more than $8.1 billion in that year. Of the schools that provide online learning, in 2004 Eduventures estimated that for-profit schools account for 37% of online enrollments (compared to only 6% of all postsecondary students).

There are more than 2.1 million active and reserve military professionals in the United States Armed Forces. Each year, approximately 300,000 new service members are enlisted or commissioned to replace retiring and separating members.

The Company’s universities share a common faculty and curriculum, which includes 50 degree programs and 48 certificate programs in disciplines related to national security, military studies, intelligence, homeland security, criminal justice, technology, business administration and liberal arts.

The Company currently serves approximately 25,000 part-time adult students living in all 50 states and more than 135 foreign countries. The Company’s university system is regionally and nationally accredited.

As of June 30, 2007, the Company had approximately 100 full-time and over 300 adjunct faculty, virtually all of whom have advanced degrees and many of whom are former or current leading practitioners in their fields. The Company’s adjunct faculty also includes professors who teach at leading national and state universities.

Costs and expenses were $11.4 million for the three months ended March 31, 2007, an increase of $4.2 million, or 59%, compared to $7.2 million for the three months ended March 31, 2006.

Instructional costs and services expenses for the three months ended March 31, 2007 were $6.1 million, representing an increase of 62% from $3.8 million for the three months ended March 31, 2006.

Interest income, net was $144,000 for the three months ended March 31, 2007, representing an increase of 122% from $65,000 for the three months ended March 31, 2006.

Net income was $1.5 million for the three months ended March 31, 2007, compared to net income of $531,000 for the three months ended March 31, 2006, an increase of $1.0 million.