Our Market For Online Education

The US. market for K-12 education is large and growing. For example:

•                  NBC News note in a recent show on NBC the Today School noted that 2,000,000 kids High School children that some sort of online class. In the next 4 years that will be 10,000,000.

•                  According to the National Center for Education Statistics (NCES), a division of the US. Department of Education, approximately 55 million students will attend K-12 public schools during the 2008-09 school year. In addition, according to National Home Education Research, approximately two million students are home schooled and, according to 2008 NCES report, approximately six million students are enrolled in private schools.

•                  According to the NCES, the public school system alone will encompass more than 97,000 schools and approximately 14,000 districts during the 2008-09 school year.

•                  The NCES estimates that total spending in the public K-12 market will be $543 billion for the 2009-10 school year.

Parents and lawmakers are demanding increased standards and accountability in an effort to improve

academic performance in US. public schools. As a result, each state is now required to establish

performance standards and to regularly assess student progress relative to these standards. We expect

continued focus on academic standards, assessments and accountability in the future.

Many parents and educators are also seeking alternatives to traditional classroom-based education that can help improve academic achievement. Demand for these alternatives is evident in the growing number of choices available to parents and students. For example, charter schools emerged in 1988 to provide an alternative to traditional public schools. Currently, 40 states and the District of Columbia have passed charter school legislation and there are approximately 4,600 charter schools in the U.S. with an estimated enrollment of over 1.5 million students according to the Center for Education Reform. Similarly, acceptance of online learning initiatives, including not only virtual schools but also online testing and Internet-based professional development, has become widespread. According to the International Association for K-12 Online Learning, as of June 2009, 44 states had established a significant form of online learning initiative, and Alabama became the second state in the country after Michigan to pass legislation mandating that high school students take an online or technology enhanced course in order to graduate. In addition, the current presidential administration has supported charter school growth by linking the removal of restrictions on the growth of charter schools to federal stimulus funding, including "Race to the Top" grants. As a result, many states that have placed enrollment caps or other limitations on charter schools, including online charter schools, are in the process of eliminating or revising such restrictions.

Products and Services

Our Products

Grades 6-12 Online Curriculum

Our curriculum consists of the Grades 6-12 online lessons. We have developed an extensive catalog of proprietary courses, consisting of more than thousands of lessons, designed to teach concepts to students from 6th through 12th grade. Each lesson is designed to last approximately 45 to 60 minutes, although students are able to work at their own pace. A single course generally consists of 120 to 180

individual lessons.

Online Lessons. Our online lessons are accessed through an Online School platform. Each online lesson provides the roadmap for the entire lesson including direction to specific online and offline materials, online lesson content and a summary of the major objectives for the lesson. Lessons utilize a 'combination of innovative technologies including flash animations, audio, video and other online interactivity, coordinated textbooks and hands-on materials and individualized feedback to create an engaging, responsive and highly effective curriculum. Each lesson also contains an online assessment to ensure that students have mastered the material and are ready to proceed to the next lesson, allowing them to work at their own pace.  

Courses Offered

See attached course catalog.

Middle School Courses. From 6th through 8th grade, our courses are categorized into seven major

subject areas: English and Language Arts, Mathematics, Science, History, Art Music, and World Languages. Our proprietary curriculum includes all of the courses that students need to complete their

core 6th through 8th grade education. Unlike a traditional classroom education, our learning system

offers the flexibility for each student to take courses at different grade levels in a single academic year,

providing flexibility for students to progress at their own level and pace within each subject area. In

addition, the flexibility of our learning system allows us to tailor our curriculum to state specific

requirements.

High School Courses. The curriculum sought by students in high school is much broader and varies

from student to student, largely as a result of the increased flexibility in course selection required for high school students. In order to offer a full suite of courses, including the many elective courses

required to meet the needs of high school students, we offer a combination of our own courses, as well

as courses licensed from third parties on either an unlimited use or per-course basis.  

Online School Platform

Our Online School platform is an intuitive, web-based software platform that provides access to our online lessons as well as our lesson plalU1ing and scheduling tools and our progress tracking tool, both of which serve a key role in assisting parents and teachers in managing each student's progress. Because the Online School Platform is a web-based platform, students, parents and teachers can access our online tools and lessons through the platform from anywhere with an Internet collection at any time of the day or night. We license a third-party learning management platform for use in our high school program.