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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

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<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>As filed with the Securities and Exchange Commission on
    August&#160;27, 2009</B>
</DIV>

<DIV align="right" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Registration
    No.&#160;333-&#160;&#160;&#160;&#160;&#160;&#160;</B>
</DIV>

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<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">Washington, DC 20549</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt"><FONT style="white-space: nowrap">Form&#160;S-1</FONT></FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">REGISTRATION
    STATEMENT</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">THE SECURITIES ACT OF
    1933</FONT></B>
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 24pt">Grand Canyon Education,
    Inc.</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 8pt">(Exact Name of Registrant as
    Specified in Its Charter)</FONT></I>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="34%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="32%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="32%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="center" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Delaware</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    <B>8221</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    <B>20-3356009</B>
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
    <I><FONT style="font-size: 8pt">(State or Other Jurisdiction
    of<BR>
    Incorporation or Organization)</FONT></I>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <I><FONT style="font-size: 8pt">(Primary Standard Industrial<BR>
    Classification Code Number)</FONT></I>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <I><FONT style="font-size: 8pt">(I.R.S. Employer<BR>
    Identification Number) </FONT></I>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>3300&#160;W.&#160;Camelback Road</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Phoenix, Arizona 85017</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>(602)&#160;639-7500</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 8pt">(Address, Including Zip Code,
    and Telephone Number, Including Area Code, of Registrant&#146;s
    Principal Executive Offices)</FONT></I>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Christopher C. Richardson</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>General Counsel</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Grand Canyon Education, Inc.</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>3300&#160;W.&#160;Camelback Road</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Phoenix, Arizona 85017</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>(602)&#160;639-7500</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 8pt">(Name, Address, Including Zip
    Code, and Telephone Number, Including Area Code, of Agent For
    Service)</FONT></I>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Copies to:</I></B>
</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="49%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="49%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD align="center" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>David P. Lewis,&#160;Esq. </B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>Mark A. Stegemoeller,&#160;Esq.</B>
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>DLA Piper LLP (US)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>Latham &#038; Watkins LLP</B>
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>2525 East Camelback Road, Suite 1000</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>355&#160;South Grand Avenue</B>
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Phoenix, Arizona 85016</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>Los Angeles, California 90071</B>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>(480) 606-5100</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>(213) 485-1234 </B>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Approximate date of commencement of proposed sale to the
    public:</B>&#160;&#160;As soon as practicable after this
    registration statement becomes effective.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If any of the securities being registered on this form are to be
    offered on a delayed or continuous basis pursuant to
    Rule&#160;415 under the Securities Act of 1933, check the
    following
    box.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this form is filed to register additional securities for an
    offering pursuant to Rule 462(b) under the Securities Act,
    please check the following box and list the Securities Act
    registration statement number of the earlier effective
    registration statement for the same
    offering.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this form is a post-effective amendment filed pursuant to
    Rule&#160;462(c) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this form is a post-effective amendment filed pursuant to
    Rule&#160;462(d) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Indicate by check mark whether the registrant is a large
    accelerated filer, an accelerated filer, a non-accelerated
    filer, or a smaller reporting company. See the definitions of
    &#147;large accelerated filer,&#148; &#147;accelerated
    filer&#148; and &#147;smaller reporting company&#148; in Rule
    <FONT style="white-space: nowrap">12b-2</FONT> of the
    Exchange Act. (Check one):
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="25%"></TD>
    <TD width="25%"></TD>
    <TD width="25%"></TD>
    <TD width="25%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <FONT style="font-family: 'Times New Roman', Times">Large
    accelerated
    filer&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>
    </FONT></TD>
    <TD nowrap align="center">    <FONT style="font-family: 'Times New Roman', Times"> Accelerated
    filer&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>
    </FONT></TD>
    <TD nowrap align="center">    <FONT style="font-family: 'Times New Roman', Times">
    <FONT style="white-space: nowrap">Non-accelerated</FONT>
    filer&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#254;</FONT>
    </FONT></TD>
    <TD nowrap align="right">    <FONT style="font-family: 'Times New Roman', Times"> Smaller
    reporting
    company&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>
    </FONT></TD>
</TR>

</TABLE>



<DIV align="center" style="margin-left: 22%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (Do not check if a smaller reporting company)
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CALCULATION
    OF REGISTRATION FEE</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="44%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutterright -->
    <TD width="12%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutterright -->
    <TD width="12%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutterright -->
    <TD width="12%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutterright -->
    <TD width="12%">&nbsp;</TD>	<!-- colindex=05 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
    <B>Proposed Maximum<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
    <B>Proposed Maximum<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
    <B>Amount of<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
    <B>Title of Each Class of<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Offering<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Aggregate<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Registration<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
    <B>Security to be Registered</B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Amount to be Registered</B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Price per
    Share<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></B>

</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Offering
    Price<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></B>

</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Fee<SUP style="font-size: 85%; vertical-align: top">(2)</SUP></B>

</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top" style="border-top: 1px solid #000000">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Common Stock, par value $0.01 per share
</DIV>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
    8,000,000
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
    $18.91
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
    $151,280,000
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
    $8,442
</TD>
</TR>
<TR style="font-size: 1pt">
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Estimated solely for the purpose of calculating the registration
    fee pursuant to Rule 457(c) under the Securities Act on the
    basis of the average of the high and low prices of Grand Canyon
    Education, Inc.&#146;s common stock as reported on The Nasdaq
    Global Market on August&#160;25, 2009.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Calculated pursuant to Rule&#160;457(o) based on an estimate of
    the proposed maximum aggregate offering price, including the
    offering price of shares that the underwriters have the option
    to purchase to cover over-allotments, if any.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>The Registrant hereby amends this Registration Statement on
    such date or dates as may be necessary to delay its effective
    date until the Registrant shall file a further amendment which
    specifically states that this Registration Statement shall
    thereafter become effective in accordance with Section&#160;8(a)
    of the Securities Act or until the Registration Statement shall
    become effective on such date as the Commission, acting pursuant
    to said Section&#160;8(a), shall determine.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=0 -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=0 -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 94%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->

<TABLE style="color: #FF0000" width="100%" border="1" cellpadding="5"><TR><TD style=text-align:justify>
<FONT style="font-size: 8pt; font-family: Arial, Helvetica; color: #E8112D">The
information in this prospectus is not complete and may be
changed. We and the selling stockholders may not sell these
securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted.<BR>
</FONT>
</TD></TR></TABLE>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times; color: #E8112D">Subject
    to Completion
    </FONT>
</DIV>



<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times; color: #E8112D">Preliminary
    Prospectus Dated August&#160;27, 2009
    </FONT>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 14pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Shares
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="p15698orp1569800.gif" alt="(GRAND CANYON UNIVERSITY LOGO)"><FONT style="font-size: 14pt">
    </FONT>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 14pt">Grand Canyon Education, Inc.
    </FONT>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 14pt">Common Stock
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 26%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=120 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are offering 1,000,000&#160;shares of our common stock and
    the selling stockholders identified in this prospectus are
    offering&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of our common stock. We will not receive any of the proceeds
    from the sale of the shares being sold by the selling
    stockholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common stock is listed on The Nasdaq Global Market under the
    symbol &#147;LOPE.&#148; The last reported sale price of our
    common stock on August&#160;25, 2009 was $18.58 per share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Investing in our common stock involves risks. See &#147;Risk
    Factors&#148; beginning on page 10.</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 26%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=120 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="81%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Per Share</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Public offering price
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Underwriting discounts and commissions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Proceeds, before expenses, to us
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Proceeds, before expenses, to the selling stockholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain of the selling stockholders have granted the
    underwriters a
    <FONT style="white-space: nowrap">30-day</FONT>
    option to purchase a maximum of additional shares on the same
    terms and conditions as set forth above, to cover
    over-allotments of shares, if any.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus is truthful or
    complete. Any representation to the contrary is a criminal
    offense.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Delivery of the shares of common stock will be made on or
    about&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2009.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 26%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=120 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Joint Book-Running Managers</I>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <B><FONT style="font-size: 18pt; font-family: 'Times New Roman', Times">Credit
    Suisse </FONT></B></TD>
    <TD nowrap align="right">    <B><FONT style="font-size: 18pt; font-family: 'Times New Roman', Times">
    BofA Merrill Lynch</FONT></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 26%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=120 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="25%"></TD>
    <TD width="25%"></TD>
    <TD width="25%"></TD>
    <TD width="25%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <B><FONT style="font-size: 13pt; font-family: 'Times New Roman', Times">BMO
    Capital Markets</FONT></B></TD>
    <TD nowrap align="center">    <B><FONT style="font-size: 13pt; font-family: 'Times New Roman', Times">
    William Blair&#160;&#038; Company</FONT></B></TD>
    <TD nowrap align="center">    <B><FONT style="font-size: 13pt; font-family: 'Times New Roman', Times">
    Piper Jaffray</FONT></B></TD>
    <TD nowrap align="right">    <B><FONT style="font-size: 13pt; font-family: 'Times New Roman', Times">
    Barrington Research</FONT></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 26%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=120 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The date of this prospectus
    is&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2009.
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>


<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="89%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Page</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#101'>Prospectus Summary</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#102'>Risk Factors</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#103'>Forward-Looking Statements</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#104'>Use of Proceeds</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    39
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#105'>Price Range of Common Stock</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    39
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#106'>Dividend Policy</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    39
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#107'>Capitalization</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#108'>Regulation</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    41
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#109'>Certain Relationships and Related Transactions</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    60
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#110'>Beneficial Ownership of Common Stock </A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    64
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#111'>Selling Stockholders</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    66
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#112'>Description of Capital Stock</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    68
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#113'>Material U.S. Federal Income and Estate Tax
    Considerations for
    <FONT style="white-space: nowrap">Non-U.S.</FONT>
    Holders</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    72
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#114'>Underwriting</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    75
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#115'>Notice to European Economic Area Residents</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    78
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#116'>Notice to United Kingdom Residents</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    78
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#117'>Notice to Canadian Residents</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    79
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#118'>Legal Matters</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    81
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#119'>Experts</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    81
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#120'>Where You Can Find More Information</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    81
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#121'>Incorporation by Reference</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    81
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p15698orexv5w1.htm">EX-5.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="p15698orexv23w1.htm">EX-23.1</A></FONT></TD></TR>
</TABLE>

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</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ABOUT
    THIS PROSPECTUS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>You should rely only on the information contained in, or
    incorporated by reference in, this prospectus or in any
    free-writing prospectus that we specifically authorize to be
    delivered or made available to you. We have not, the selling
    stockholders have not, and the underwriters have not authorized
    anyone to provide you with additional or different information.
    We and the selling stockholders are offering to sell, and
    seeking offers to buy, shares of common stock only in
    jurisdictions where offers and sales are permitted. You should
    assume that the information contained in, or incorporated by
    reference in, this prospectus or in any free-writing prospectus
    that we specifically authorize to be delivered or made available
    to you is accurate only as of the date of this prospectus,
    regardless of its time of delivery or of any sale of shares of
    our common stock. Our business, financial condition, results of
    operations and prospects may have changed since that date.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>For investors outside the United States:</B> We have not, the
    selling stockholders have not and the underwriters have not done
    anything that would permit this offering or possession or
    distribution of this prospectus in any jurisdiction where action
    for that purpose is required, other than in the United States.
    Persons outside the United States who come into possession of
    this prospectus must inform themselves about, and observe any
    restrictions relating to, the offering of the shares of common
    stock and the distribution of this prospectus outside of the
    United States.
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
<A name='101'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PROSPECTUS
    SUMMARY</FONT></B>
</DIV>
</A>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>This summary highlights information contained elsewhere in or
    incorporated by reference into this prospectus. This summary
    sets forth the material terms of the offering, but does not
    contain all of the information that you should consider before
    investing in our common stock. You should read the entire
    prospectus and the documents that are incorporated by reference
    into this prospectus carefully before making an investment
    decision, especially the risks of investing in our common stock
    described under &#147;Risk Factors.&#148; Unless the context
    otherwise requires, the terms &#147;we,&#148; &#147;us,&#148;
    &#147;our,&#148; &#147;Grand Canyon,&#148; and &#147;Grand
    Canyon Education&#148; refer to Grand Canyon Education, Inc. and
    our predecessor as the context requires, and references to
    &#147;Grand Canyon University&#148; refer to the postsecondary
    education institution operated by Grand Canyon Education,
    Inc.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Overview</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a regionally accredited provider of online postsecondary
    education services focused on offering graduate and
    undergraduate degree programs in our core disciplines of
    education, business, and healthcare. In addition to our online
    programs, we offer ground programs at our traditional campus in
    Phoenix, Arizona and onsite at the facilities of employers. We
    are committed to providing an academically rigorous educational
    experience with a focus on career-oriented programs that meet
    the objectives of our students. We utilize an integrated,
    innovative approach to marketing, recruiting, and retaining
    students, which has enabled us to increase enrollment from
    approximately 3,000 students at the end of 2003 to approximately
    27,600 students at June&#160;30, 2009, representing a compound
    annual growth rate of approximately 50% over that period and an
    increase of 67% over the approximately 16,500 students we had at
    June&#160;30, 2008. At December&#160;31, 2008, 89.1% of our
    students were enrolled in our online programs, and 52.9% of our
    students were pursuing master&#146;s or doctoral degrees.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our three core disciplines of education, business, and
    healthcare represent large markets with attractive employment
    opportunities. According to a March 2009 report from the
    U.S.&#160;Department of Education, National Center for Education
    Statistics, or NCES, these disciplines ranked as three of the
    four most popular fields of postsecondary education, based on
    degrees conferred in the
    <FONT style="white-space: nowrap">2006-07</FONT>
    school year. The U.S.&#160;Department of Labor, Bureau of Labor
    Statistics, or BLS, estimated in its
    <FONT style="white-space: nowrap">2008-09</FONT>
    Career Guide that these fields comprised over 40&#160;million
    jobs in 2006, many of which require postsecondary education
    credentials.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We primarily focus on recruiting and educating working adults,
    whom we define as students age&#160;25 or older who are pursuing
    a degree while employed. As of June&#160;30, 2009, approximately
    90% of our online students were age&#160;25 or older. We believe
    that working adults are attracted to the convenience and
    flexibility of our online programs because they can study and
    interact with faculty and classmates during times that suit
    their schedules. We also believe that working adults represent
    an attractive student population because they are better able to
    finance their education, more readily recognize the benefits of
    a postsecondary degree, and have higher persistence and
    completion rates than students generally.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have experienced significant growth in enrollment, net
    revenue, and operating income over the last several years. Our
    enrollment at December&#160;31, 2008 was approximately 24,600,
    representing an increase of approximately 67% over our
    enrollment at December&#160;31, 2007. Our net revenue and
    operating income for the year ended December&#160;31, 2008 were
    $161.3&#160;million and $12.8&#160;million, respectively,
    representing increases of 62.4% and 194.5%, respectively, over
    the year ended December&#160;31, 2007. Our enrollment at
    June&#160;30, 2009 was approximately 27,600, representing an
    increase of approximately 67% over our enrollment at
    June&#160;30, 2008. Our net revenue and operating income for the
    six months ended June&#160;30, 2009 were $118.4&#160;million and
    $22.0&#160;million, respectively, representing increases of
    68.4% and 248.0%, respectively, over the six months ended
    June&#160;30, 2008. We seek to achieve continued growth in a
    manner that reinforces our reputation for providing academically
    rigorous, career-oriented educational programs that advance the
    careers of our students.
</DIV>
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    <BR>
    1
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<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have been regionally accredited by the Higher Learning
    Commission of the North Central Association of Colleges and
    Schools, or the Higher Learning Commission, and its predecessor
    since 1968, and we were reaccredited by the Higher Learning
    Commission in 2007 for the maximum term of ten years. In
    addition, we have specialized accreditations for certain
    programs from the Association of Collegiate Business Schools and
    Programs, the Commission on Collegiate Nursing Education, and
    the Commission on Accreditation of Athletic Training Education.
    We believe that our regional accreditation, together with these
    specialized accreditations, reflect the quality of our programs,
    enhance their marketability, and improve the employability of
    our graduates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We were founded as Grand Canyon College, a traditional, private,
    non-profit college, in 1949 and moved to our existing campus in
    Phoenix, Arizona in 1951. In February 2004, several of our
    current stockholders acquired Grand Canyon University and
    converted it to a for-profit institution. Since then, we have
    enhanced our senior management team, expanded our online
    platform and programs, and initiated an infrastructure and
    technology improvement plan and a marketing and branding effort
    to further differentiate us in the markets in which we operate
    and support our continued growth. We have also maintained our
    <FONT style="white-space: nowrap">non-denominational</FONT>
    Christian identity, with many of our ground programs including
    Christian study requirements and our online programs including
    ethics requirements and electives in religion.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Industry</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The United States market for postsecondary education represents
    a large and growing opportunity. According to the March 2009
    NCES report, total revenue for all degree-granting postsecondary
    institutions was over $411&#160;billion for the
    <FONT style="white-space: nowrap">2005-06</FONT>
    school year. In addition, according to a March&#160;2009 NCES
    report, approximately 18.2&#160;million students were projected
    to be enrolled in postsecondary institutions in 2008 and the
    number was projected to grow to 20.1&#160;million by 2017. We
    believe that future growth in this market will be driven, in
    part, by the increasing number of job openings in occupations
    that require bachelor&#146;s or master&#146;s degrees, which a
    November 2007 report based on BLS data has projected will grow
    approximately 17% and 19%, respectively, between 2006 and 2016,
    or nearly double the growth rate the BLS projected for
    occupations that do not require postsecondary degrees. Moreover,
    according to U.S.&#160;Census Bureau data, individuals with a
    postsecondary degree are able to obtain a significant
    compensation premium relative to individuals without a degree.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The market for online postsecondary education has grown more
    rapidly than the overall postsecondary market. A 2008 study by
    Eduventures, LLC, an education consulting and research firm,
    projected that from 2002 to 2008 enrollment in online
    postsecondary programs increased from approximately
    0.4&#160;million to approximately 1.9&#160;million, representing
    a compound annual growth rate of approximately 28.6%. In
    comparison, in March 2009 the NCES projected a compound annual
    growth rate of 1.5% in enrollment in postsecondary programs
    overall during the same period. We believe this growth has been
    driven by a number of factors, including the greater convenience
    and flexibility of online programs as compared to ground-based
    programs and the increased acceptance of online programs among
    academics and employers. According to a 2006 survey by the Sloan
    Consortium, a trade group focused on online education, 79.1% of
    chief academic officers surveyed at institutions with 15,000 or
    more students, most of which offer online programs, and 61.9% of
    all chief academic officers surveyed, believe that online
    learning outcomes are equal or superior to traditional
    <FONT style="white-space: nowrap">face-to-face</FONT>
    instruction.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Competitive
    Strengths</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe we have the following competitive strengths:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Established presence in targeted, high demand
    disciplines.</I>&#160;&#160;We have an established presence
    within our three core disciplines of education, business, and
    healthcare. We believe our focused approach enables us to
</DIV>
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    <BR>
    2
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    develop our academic reputation and brand identity within our
    core disciplines, recruit and retain quality faculty and staff
    members, and meet the educational and career objectives of our
    students.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Focus on graduate degrees for working
    adults.</I>&#160;&#160;We have designed our program offerings
    and our online delivery platform to meet the needs of working
    adults, particularly those seeking graduate degrees to obtain
    pay increases or job promotions that are directly tied to higher
    educational attainment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Campus-based tradition that complements online
    capabilities.</I>&#160;&#160;We believe that our
    <FONT style="white-space: nowrap">60-year</FONT>
    heritage as a traditional campus-based university complements
    our online capabilities, attracts students who seek to affiliate
    with a traditional university, enhances the reputation of our
    degree programs among prospective students and employers, and
    differentiates us in the for-profit postsecondary market.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Commitment to offering academically rigorous, career-oriented
    programs.</I>&#160;&#160;We are committed to offering
    academically rigorous educational programs that are designed to
    help our students achieve their career objectives. Our programs
    are taught by qualified faculty, substantially all of whom hold
    at least a master&#146;s degree and often have practical
    experience in their respective fields.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Innovative marketing, recruiting, and retention
    strategy.</I>&#160;&#160;We have developed an integrated,
    innovative approach to student marketing, recruitment, and
    retention to reach our targeted students. We also proactively
    provide support to students at key points during their
    consideration of, and enrollment at, Grand Canyon University to
    enhance the probability of student enrollment and retention.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Experienced executive management team with strong operating
    track-record.</I>&#160;&#160;Our executive management team
    possesses extensive experience in the management and operation
    of publicly-traded for-profit, postsecondary education
    companies, as well as other educational services businesses,
    including in the areas of marketing to, recruiting, and
    retaining students pursuing online and other distance education
    degree offerings, and in online content development.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Growth
    Strategies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to pursue the following growth strategies:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Increase enrollment in existing programs.</I>&#160;&#160;We
    intend to increase enrollment in existing programs within our
    three core disciplines, which we believe offer ample opportunity
    for growth. We also intend to increase the number of our
    enrollment counselors and marketing and student services
    personnel to drive enrollment growth and enhance student
    retention.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Expand online program and degree offerings consistent with
    student and employment demand trends.</I>&#160;&#160;We develop
    and offer new programs that we believe have attractive demand
    characteristics and that are consistent with employment trends
    in the country. In this regard, we seek to develop additional
    programs in healthcare, education, business and liberal arts
    that are relevant to employers in these fields.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Continue to enhance the profile and reputation of our
    traditional ground campus.</I>&#160;&#160;We intend to continue
    to enhance the profile and reputation of our traditional ground
    campus by leveraging the capabilities of our full-time ground
    faculty, attracting additional faculty with strong academic
    credentials, expanding upon and modernizing our campus
    infrastructure and technological capabilities, and strengthening
    our athletic programs. We believe these activities will continue
    to sustain and enhance the reputation of our programs and help
    drive, and support, increased ground and online enrollments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Further enhance our brand recognition.</I>&#160;&#160;We
    continue to enhance our brand recognition by pursuing online and
    offline marketing campaigns, developing our ground campus and
    traditional university programs to increase awareness of the
    university, establishing strategic branding relationships with
    recognized industry leaders, and developing complementary
    resources in our core disciplines that increase the overall
    awareness of our offerings.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Leverage infrastructure and drive earnings
    growth.</I>&#160;&#160;We have made and will continue to make
    significant investments in our people, processes, and technology
    infrastructure. We believe that these investments have prepared
    us to deliver our academic programs to a much larger student
    population with only modest incremental investment, and have
    also enabled us to increase the effectiveness of our academic,
    administrative and student services in ways that will assist in
    our efforts to increase student success and retention levels. We
    intend to continue leveraging our historical investments over
    our increasing enrollment, which we believe will allow us to
    increase our operating margins over time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Expand relationships with private sector and government
    employers.</I>&#160;&#160;We seek additional relationships with
    health care systems, school districts, emergency services
    providers, and other employers through which we market our
    offerings to their employees. These relationships provide leads
    for our programs, build our recognition among employers in our
    core disciplines, and enable us to identify new programs and
    degrees that are in demand by students and employers.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Affecting Us</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our business is subject to numerous risks, as discussed more
    fully in the section entitled &#147;Risk Factors&#148;
    immediately following this Prospectus Summary. In particular,
    our business would be adversely affected if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we are unable to attract and retain students as a result of the
    highly competitive markets in which we operate;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we are unable to comply with the constantly evolving and
    extensive regulatory requirements to which our business is
    subject, including requirements governing the Title&#160;IV
    federal student financial aid programs, state laws and
    regulations, and accrediting commission requirements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we experience any student, regulatory, reputational, or other
    events that adversely affect our degree offerings;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we experience a change in control under applicable regulatory or
    accrediting standards, and we are unable to obtain appropriate
    approvals for such an event in a timely manner, or at all;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we experience damage to our reputation or other adverse effects
    in connection with any compliance audit; regulatory action;
    investigation, including the investigation of Grand Canyon
    University currently being conducted by the Office of Inspector
    General of the U.S.&#160;Department of Education; or litigation,
    including the pending <I>qui tam </I>action regarding the manner
    in which we have compensated our enrollment personnel;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we experience damage to our reputation or other adverse effects
    as a result of negative publicity in the media, in industry or
    governmental reports, or otherwise, affecting us or other
    companies in the for-profit postsecondary education sector;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we are unable to attract and retain key personnel needed to
    sustain and grow our business;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our students are unable to obtain student loans on affordable
    terms, or at all;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    adverse economic or other developments affect demand in our core
    disciplines;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we are unable to develop new programs or expand our existing
    programs in a timely and cost-effective manner.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Corporate
    Information</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We were formed in Delaware in November 2003 for the purpose of
    acquiring the assets of Grand Canyon University. Our principal
    executive offices are located at 3300&#160;West Camelback Road,
    Phoenix, Arizona 85017, and our telephone number is
    <FONT style="white-space: nowrap">(602)&#160;639-7500.</FONT>
    Our website is located at <U>www.gcu.edu</U>. The information
    on, or accessible through, our website does not constitute part
    of, and is not incorporated into, this prospectus.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Accreditation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are accredited by the Higher Learning Commission of the North
    Central Association of Colleges and Schools,
    30&#160;N.&#160;LaSalle Street, Suite&#160;2400, Chicago,
    Illinois
    <FONT style="white-space: nowrap">60602-2504;</FONT>
    telephone
    <FONT style="white-space: nowrap">(312)&#160;263-0456;</FONT>
    website <U>www.ncahlc.org</U>. The information on, or accessible
    through, the website of the Higher Learning Commission does not
    constitute part of, and is not incorporated into, this
    prospectus.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Industry
    Data</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We use market data and industry forecasts and projections
    throughout this prospectus, which we have obtained from market
    research, publicly-available information and private industry
    publications. These sources generally state that the information
    they provide has been obtained from sources believed to be
    reliable, but that the accuracy and completeness of the
    information are not guaranteed. The forecasts and projections
    are based on industry surveys and the preparers&#146; experience
    in the industry as of the time they were prepared, which in some
    cases preceded the current economic downturn, and there is no
    assurance that any of the projected numbers will be reached.
    Similarly, we believe that the surveys and market research
    others have completed are reliable, but we have not
    independently verified their findings.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">OFFERING
    SUMMARY</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
    Common stock offered by us</TD>
    <TD></TD>
    <TD valign="bottom">
    1,000,000&#160;shares</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Common stock offering by the selling stockholders</TD>
    <TD></TD>
    <TD valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Total common stock offered</TD>
    <TD></TD>
    <TD valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Total common stock outstanding after this offering</TD>
    <TD></TD>
    <TD valign="bottom">
    45,576,417&#160;shares</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Use of proceeds</TD>
    <TD></TD>
    <TD valign="bottom">
    We estimate that the proceeds to us from this offering will be
    approximately $&#160;&#160;&#160;&#160;&#160;&#160;million,
    based on an assumed offering price of
    $&#160;&#160;&#160;&#160;&#160; per share, which is the closing
    price of our common stock as reported on The Nasdaq Global
    Market on August&#160;&#160;&#160;, 2009 and after deducting the
    underwriting discounts and commissions and estimated offering
    expenses payable by us. We intend to use the proceeds to us from
    this offering to pay the fees and expenses of this offering that
    are payable by us, and for working capital and other general
    corporate purposes. See &#147;Use of Proceeds.&#148; We will not
    receive any proceeds from the shares sold by the selling
    stockholders.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Risk factors</TD>
    <TD></TD>
    <TD valign="bottom">
    You should carefully read and consider the information set forth
    under the section titled &#147;Risk Factors&#148; and all other
    information set forth in or incorporated by reference into this
    prospectus before deciding to invest in shares of our common
    stock.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Nasdaq Global Market symbol</TD>
    <TD></TD>
    <TD valign="bottom">
    LOPE</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The number of shares of our common stock to be outstanding
    following this offering is based on 44,576,417&#160;shares of
    our common stock outstanding as of June&#160;30, 2009. This
    number does not include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    3,310,532&#160;shares of common stock issuable upon the exercise
    of stock options outstanding as of June&#160;30, 2009 under our
    equity incentive plan, with a weighted average exercise price of
    $12.11 per share;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    22,377&#160;shares of common stock that were issued upon the
    exercise of stock options subsequent to June&#160;30,
    2009;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    1,956,107&#160;shares of common stock reserved for future
    issuance under our equity incentive plan as of June&#160;30,
    2009.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless otherwise indicated, the information in this prospectus
    reflects and assumes no exercise by the underwriters of their
    option to purchase up to an
    additional&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of our common stock from certain of the selling stockholders to
    cover over-allotments, if any.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SUMMARY
    FINANCIAL AND OTHER DATA</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth our summary financial and other
    data as of the dates and for the periods indicated. The
    statement of operations and other data, excluding period end
    enrollment, for each of the years in the three-year period ended
    December&#160;31, 2008, have been derived from our audited
    financial statements, which are included with our Annual Report
    on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2008, which is incorporated
    by reference into this prospectus. The statement of operations
    and other data, excluding period end enrollment, for each of the
    six month periods ended June&#160;30, 2008 and 2009, and the
    balance sheet data as of June&#160;30, 2009, have been derived
    from our unaudited financial statements, which are included with
    our Quarterly Report on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    for the quarter ended June&#160;30, 2009, which is incorporated
    by reference into this prospectus. In the opinion of management,
    our unaudited financial statements include all adjustments,
    consisting of normal, recurring adjustments, necessary for a
    fair presentation of such data. Our historical results are not
    necessarily indicative of our results for any future period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should read the following summary financial and other data
    in conjunction with &#147;Selected Financial and Other
    Data,&#148; &#147;Management&#146;s Discussion and Analysis of
    Financial Condition and Results of Operations,&#148; and our
    financial statements and related notes, all of which are
    incorporated by reference into this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
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    <TD width="48%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
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    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
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    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
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</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Six Months Ended June&#160;30,</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2006</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Unaudited)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" nowrap align="center" valign="bottom">
    <B>(In thousands, except enrollment<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" nowrap align="center" valign="bottom">
    <B>and per share data)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Statement of Operations Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net revenue
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    72,111
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    99,326
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    161,309
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    70,275
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    118,364
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Costs and expenses:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Instructional costs and services
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31,287
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    39,050
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54,450
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24,028
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38,379
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Selling and promotional
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20,093
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    35,148
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65,551
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27,473
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40,301
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    General and administrative
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,011
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,001
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    26,825
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,960
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,521
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Royalty to former owner
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,678
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,782
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,686
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,488
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    148
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total costs and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    69,069
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    94,981
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    148,512
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    63,949
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    96,349
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Operating income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,042
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,345
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12,797
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,326
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22,015
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Interest expense
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,827
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,975
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2,897
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,507
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,087
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Interest income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    912
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,172
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    640
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    432
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    229
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income before income taxes
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,127
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,542
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,540
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,251
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21,157
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income tax expense
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    529
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,016
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,855
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,027
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,439
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    598
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,526
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,685
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,224
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12,718
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Preferred dividends
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (527
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (349
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (938
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (521
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net income available to common stockholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    71
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,177
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,747
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,703
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    12,718
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Earnings per common share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.06
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.26
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.14
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Diluted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.03
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.17
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.08
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Shares used in computing earnings per common share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18,853
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18,923
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22,185
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19,089
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    45,159
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Diluted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36,858
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    35,143
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    33,430
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32,623
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    45,437
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Other Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Capital expenditures
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,387
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,406
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,374
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,504
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,111
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Purchase of campus land and buildings
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35,505
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Depreciation and amortization
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,396
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,300
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5,095
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,269
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,386
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Adjusted
    EBITDA<SUP style="font-size: 85%; vertical-align: top">(1)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,074
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,723
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,675
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    10,294
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    26,978
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Period end enrollment:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Online
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,406
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12,497
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21,955
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14,847
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    26,234
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Ground
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,256
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,257
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,681
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,663
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,388
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    7
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="77%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>As of June&#160;30, 2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Actual</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>As
    Adjusted<SUP style="font-size: 85%; vertical-align: top">(2)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom">
    <B>(Unaudited)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom">
    <B>(In thousands)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Balance Sheet Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash, cash equivalents and investments&#160;&#151; unrestricted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,225
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash and cash equivalents&#160;&#151; restricted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,230
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    126,506
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Capital lease obligations (including short-term)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,013
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other indebtedness (including short-term indebtedness)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27,681
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total stockholders&#146; equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    53,965
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Adjusted EBITDA is defined as net income (loss) plus interest
    expense net of interest income, plus income tax expense
    (benefit), and plus depreciation and amortization (EBITDA), as
    adjusted for (i)&#160;royalty payments incurred pursuant to an
    agreement with our former owner that has been terminated as of
    April&#160;15, 2008, as discussed in &#147;Management&#146;s
    Discussion and Analysis of Financial Condition and Results of
    Operations&#160;&#151; Factors affecting
    comparability&#160;&#151; Settlement with former owner&#148;
    included with our Quarterly Report on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    for the quarter ended June&#160;30, 2009, which is incorporated
    by reference into this prospectus; (ii)&#160;management fees and
    expenses that are no longer paid; (iii)&#160;contributions made
    to Arizona school tuition organizations in lieu of the payment
    of state income taxes; and (iv)&#160;share-based compensation.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    We present Adjusted EBITDA because we consider it to be an
    important supplemental measure of our operating performance. We
    also make certain compensation decisions based, in part, on our
    operating performance, as measured by Adjusted EBITDA, and our
    loan agreement requires us to comply with covenants that include
    performance metrics substantially similar to Adjusted EBITDA.
    All of the adjustments made in our calculation of Adjusted
    EBITDA are adjustments to items that management does not
    consider to be reflective of our core operating performance.
    Management considers our core operating performance to be that
    which can be affected by our managers in any particular period
    through their management of the resources that affect our
    underlying revenue and profit generating operations during that
    period. Management fees and expenses, royalty expenses paid to
    our former owner, financing arrangements, and share-based
    compensation are not considered reflective of our core operating
    performance.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our management uses Adjusted EBITDA:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in developing our internal budgets and strategic plan;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    as a measurement of operating performance;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    as a factor in evaluating the performance of our management for
    compensation purposes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to, in part, assess compliance with our loan agreement;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in presentations to the members of our Board of Directors to
    enable our board to have the same measurement basis of operating
    performance as are used by management to compare our current
    operating results with corresponding prior periods and with the
    results of other companies in our industry.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    However, Adjusted EBITDA is not a recognized measurement under
    GAAP, and when analyzing our operating performance, investors
    should use Adjusted EBITDA in addition to, and not as an
    alternative for, net income, operating income, or any other
    performance measure presented in accordance with GAAP, or as an
    alternative to cash flow from operating activities or as a
    measure of our liquidity. Because not all companies use
    identical calculations, our presentation of Adjusted EBITDA may
    not be comparable to similarly titled measures of other
    companies. Adjusted EBITDA has limitations as an analytical
    tool, as discussed under &#147;Management&#146;s Discussion and
    Analysis of Financial Condition and
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    8
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Results of Operations&#160;&#151; Non-GAAP&#160;Discussion&#148;
    included with our Quarterly Report on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    for the quarter ended June&#160;30, 2009, which is incorporated
    by reference into this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table presents data relating to Adjusted EBITDA,
    which is a non-GAAP measure, for the periods indicated:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="53%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="11" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Six Months Ended June&#160;30,</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2006</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Unaudited)</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="19" align="center" valign="bottom">
    <B>(In thousands)</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    598
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,526
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6,685
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,224
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    12,718
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Plus: interest expense net of interest income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,915
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,803
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,257
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,075
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    858
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Plus: income tax expense
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    529
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,016
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,855
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,027
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,439
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Plus: depreciation and amortization
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,396
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,300
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,095
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,269
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,238
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    EBITDA
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,438
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,645
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,892
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,595
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25,253
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Plus: royalty to former
    owner<SUP style="font-size: 85%; vertical-align: top">(a)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,678
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,782
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,686
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,488
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    148
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Plus: management fees and
    expenses<SUP style="font-size: 85%; vertical-align: top">(b)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    958
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    296
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    356
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    211
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Plus: contributions made in lieu of state income
    taxes<SUP style="font-size: 85%; vertical-align: top">(c)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    750
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Plus: share-based
    compensation<SUP style="font-size: 85%; vertical-align: top">(d)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,991
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,577
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Adjusted EBITDA
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,074
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,723
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,675
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    10,294
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    26,978
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 4%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD width="92%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (a) </TD>
    <TD></TD>
    <TD valign="bottom">
    Reflects the royalty fee arrangement with the former owner of
    Grand Canyon University in which we agreed to pay a stated
    percentage of cash revenue generated by our online programs. As
    a result of the settlement of a dispute with the former owner,
    we are no longer obligated to pay this royalty, although the
    settlement includes a prepayment of future royalties that will
    be amortized in 2008 and future periods. See
    &#147;Management&#146;s Discussion and Analysis of Financial
    Condition and Results of Operations&#160;&#151; Factors
    affecting comparability&#160;&#151; Settlement with former
    owner&#148; included with our Quarterly Report on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    for the quarter ended June&#160;30, 2009, which is incorporated
    by reference into this prospectus.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (b) </TD>
    <TD></TD>
    <TD valign="bottom">
    Reflects management fees and expenses of $0.3&#160;million,
    $0.3&#160;million, and $0.4&#160;million for the years ended
    December&#160;31, 2006, 2007, and 2008, respectively, and
    $0.2&#160;million for the six months ended June&#160;30, 2008,
    to the general partner of Endeavour Capital Fund&#160;IV, L.P.,
    one of our significant stockholders, and an aggregate of
    $0.7&#160;million for the year ended December&#160;31, 2006, to
    an entity affiliated with a former director and another
    affiliated with a significant stockholder, in each case
    following their investment in us. The agreements relating to
    these arrangements have all terminated.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (c) </TD>
    <TD></TD>
    <TD valign="bottom">
    Reflects contributions made in 2008 to various Arizona school
    tuition organizations to assist with funding for education. In
    connection with such contributions, we received a
    <FONT style="white-space: nowrap">dollar-for-dollar</FONT>
    state income tax credit, which resulted in a reduction in our
    effective income tax rate to 36.6% for the year ended
    December&#160;31, 2008. Had this payment not been made, our
    effective tax rate would have been 40.8%. Such contributions
    were made in lieu of payments of state income taxes and are
    therefore excluded from evaluation of our core operating
    performance for the year ended December&#160;31, 2008.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (d) </TD>
    <TD></TD>
    <TD valign="bottom">
    Reflects share-based compensation expense relating to stock and
    option grants made to employees and directors in connection with
    our initial public offering and thereafter.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    As adjusted to give effect to the sale
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of common stock by us in this offering at an assumed offering
    price of $&#160;&#160;&#160;&#160;&#160; per share, which is the
    closing price of our common stock as reported on The Nasdaq
    Global Market on August&#160;&#160;&#160;, 2009, and the receipt
    by us of the estimated net proceeds of that sale after deducting
    underwriting discounts and commissions and estimated offering
    expenses payable by us.</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

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    <BR>
    9
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='102'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Investing in our common stock involves a high degree of risk.
    Before making an investment in our common stock, you should
    carefully consider the following risks and the other information
    contained in or incorporated by reference into this prospectus,
    including our financial statements and related notes,
    &#147;Management&#146;s Discussion and Analysis of Financial
    Condition and Results of Operations,&#148; and
    &#147;Regulation.&#148; See &#147;Where You Can Find More
    Information&#148; and &#147;Incorporation By Reference.&#148;
    The risks described below are those that we believe are the
    material risks we face. Any of the risk factors described below,
    and others that we did not anticipate, could significantly and
    adversely affect our business, prospects, financial condition,
    results of operations, and cash flows. As a result, the trading
    price of our common stock could decline and you may lose all or
    part of your investment.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to the Regulation of Our Industry</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    failure to comply with the extensive regulatory requirements
    governing our school could result in financial penalties,
    restrictions on our operations or growth, or loss of external
    financial aid funding for our students.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For our fiscal years ended December&#160;31, 2007 and 2008, we
    derived cash receipts equal to approximately 70.2% and 74.4%,
    respectively, of our net revenue from tuition financed under
    federal student financial aid programs authorized under
    Title&#160;IV of the Higher Education Act of 1965, as amended,
    referred to in this prospectus as the Title&#160;IV programs,
    which are administered by the U.S.&#160;Department of Education,
    or the Department of Education. To participate in the
    Title&#160;IV programs, a school must be authorized by the
    appropriate state education agency or agencies, be accredited by
    an accrediting commission recognized by the Department of
    Education, and be certified as an eligible institution by the
    Department of Education. In addition, our operations and
    programs are regulated by other state education agencies and
    additional accrediting commissions. As a result of these
    requirements, we are subject to extensive regulation by the
    Arizona State Board for Private Postsecondary Education and
    education agencies of other states, the Higher Learning
    Commission, which is our primary accrediting commission,
    specialized accrediting commissions, and the Department of
    Education. These regulatory requirements cover the vast majority
    of our operations, including our educational programs,
    instructional and administrative staff, administrative
    procedures, marketing, recruiting, financial operations, and
    financial condition. These regulatory requirements also affect
    our ability to open additional schools and locations, add new
    educational programs, change existing educational programs, and
    change our corporate or ownership structure. The agencies that
    regulate our operations periodically revise their requirements
    and modify their interpretations of existing requirements.
    Regulatory requirements are not always precise and clear, and
    regulatory agencies may sometimes disagree with the way we have
    interpreted or applied these requirements. Any misinterpretation
    by us of regulatory requirements could materially adversely
    affect us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we fail to comply with any of these regulatory requirements,
    we could suffer financial penalties, limitations on our
    operations, loss of accreditation, termination of or limitations
    on our ability to grant degrees and certificates, or limitations
    on or termination of our eligibility to participate in the
    Title&#160;IV programs, each of which could materially adversely
    affect us. In addition, if we are charged with regulatory
    violations, our reputation could be damaged, which could have a
    negative impact on our stock price and our enrollments. We
    cannot predict with certainty how all of these regulatory
    requirements will be applied, or whether we will be able to
    comply with all of the applicable requirements in the future.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If the
    Department of Education does not recertify us to continue
    participating in the Title&#160;IV programs, our students would
    lose their access to Title&#160;IV program funds, or we could be
    recertified but required to accept significant limitations as a
    condition of our continued participation in the Title&#160;IV
    programs.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Department of Education certification to participate in the
    Title&#160;IV programs lasts a maximum of six years, and
    institutions are thus required to seek recertification from the
    Department of Education on a regular basis in order to continue
    their participation in the Title&#160;IV programs. An
    institution must also apply for recertification by the
    Department of Education if it undergoes a change in control, as
    defined by Department
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    10
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    of Education regulations, and may be subject to similar review
    if it expands its operations or educational programs in certain
    ways.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our most recent recertification, which was issued on a
    provisional basis in May 2005 after an extended review by the
    Department of Education following the change in control that
    occurred in February 2004, contained a number of conditions on
    our continued participation in the Title&#160;IV programs. At
    that time we were required by the Department of Education to
    post a letter of credit, accept restrictions on the growth of
    our program offerings and enrollment, and receive certain
    Title&#160;IV funds under the heightened cash monitoring system
    of payment (pursuant to which an institution is required to
    credit students with Title&#160;IV funds prior to obtaining
    those funds from the Department of Education) rather than by
    advance payment (pursuant to which an institution receives
    Title&#160;IV funds from the Department of Education in advance
    of disbursement to students). In 2006 and 2007, the Department
    of Education eliminated the letter of credit requirement,
    allowed the growth restrictions to expire, eliminated the
    heightened cash monitoring restrictions and returned us to the
    advance payment method. We submitted our application for
    recertification to participate in the Title&#160;IV programs to
    the Department of Education in March 2008 in anticipation of the
    expiration of our provisional certification on June&#160;30,
    2008. The Department of Education did not make a decision on our
    recertification application by June&#160;30, 2008 and therefore
    our provisional certification to participate in the
    Title&#160;IV programs has been automatically extended on a
    <FONT style="white-space: nowrap">month-to-month</FONT>
    basis until the Department of Education makes its decision. See
    &#147;Regulation&#160;&#151; Regulation of Federal Student
    Financial Aid Programs&#160;&#151; Eligibility and certification
    procedures.&#148; There can be no assurance that the Department
    of Education will recertify us while the investigation by the
    Office of Inspector General of the Department of Education is
    being conducted, while the qui tam lawsuit is pending, or at
    all, or that it will not impose restrictions as a condition to
    approving our pending recertification application or with
    respect to any future recertification. See &#147;&#151;&#160;The
    Office of Inspector General of the Department of Education has
    commenced an investigation of Grand Canyon University, which is
    ongoing and which may result in fines, penalties, other
    sanctions, and damage to our reputation in the industry&#148;
    and &#147;&#151;&#160;A qui tam lawsuit has been filed against
    us alleging, among other things, that we have improperly
    compensated certain of our enrollment counselors, and we may
    incur liability, be subject to sanctions, or experience damage
    to our reputation as a result of this lawsuit.&#148; If the
    Department of Education does not renew or withdraws our
    certification to participate in the Title&#160;IV programs at
    any time, our students would no longer be able to receive
    Title&#160;IV program funds. Similarly, the Department of
    Education could renew our certification, but restrict or delay
    our students&#146; receipt of Title&#160;IV funds, limit the
    number of students to whom we could disburse such funds, or
    place other restrictions on us that could be similar to, or more
    or less restrictive than, the restrictions that Department of
    Education imposed on us in connection with our recertification
    in 2005. Any of these outcomes would have a material adverse
    effect on our enrollments and us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    Office of Inspector General of the Department of Education has
    commenced an investigation of Grand Canyon University, which is
    ongoing and which may result in fines, penalties, other
    sanctions, and damage to our reputation in the
    industry.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Office of Inspector General of the Department of Education
    is responsible for, among other things, promoting the
    effectiveness and integrity of the Department of
    Education&#146;s programs and operations, including compliance
    with applicable statutes and regulations. The Office of
    Inspector General performs investigations of alleged violations
    of law, including cases of alleged fraud and abuse, or other
    identified vulnerabilities, in programs administered or financed
    by the Department of Education. On August&#160;14, 2008, the
    Office of Inspector General served an administrative subpoena on
    Grand Canyon University requiring us to provide certain records
    and information related to performance reviews and salary
    adjustments for all of our enrollment counselors and managers
    from January&#160;1, 2004 to the present. The Office of
    Inspector General&#146;s investigation is focused on whether we
    have compensated any of our enrollment counselors or managers in
    a manner that violated the Title&#160;IV statutory requirements
    or the related Department of Education regulations concerning
    the payment of incentive compensation based on success in
    securing enrollments or financial aid. See
    &#147;Regulation&#160;&#151; Regulation of Federal Student
    Financial Aid Programs&#160;&#151; Incentive compensation
    rule.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have been cooperating with the Office of Inspector General to
    facilitate its investigation and have completed production of
    all requested documents. We cannot presently predict the
    ultimate outcome of the investigation or any liability or other
    sanctions that may result. The outcome of the Office of
    Inspector
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    11
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    General investigation may depend in part on information
    contained in the materials we produced or information or
    testimony provided by former employees or other third parties.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Department of Education may impose fines and other monetary
    penalties as a result of a violation of the incentive
    compensation law and such fines and other monetary penalties may
    be substantial. In addition, the Department of Education retains
    the authority to impose other sanctions on an institution for
    violations of the incentive compensation law. The possible
    effects of a determination of a regulatory violation are
    described more fully in &#147;Regulation&#160;&#151; Regulation
    of Federal Student Financial Aid Programs&#160;&#151; Potential
    effect of regulatory violations.&#148; Any such fine or other
    sanction could damage our reputation and impose significant
    costs on us, which could have a material adverse effect on our
    business, prospects, financial condition, and results of
    operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">A qui
    tam lawsuit has been filed against us alleging, among other
    things, that we have improperly compensated certain of our
    enrollment counselors, and we may incur liability, be subject to
    sanctions, or experience damage to our reputation as a result of
    this lawsuit.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On September&#160;11, 2008, we were served with a <I>qui tam
    </I>lawsuit that had been filed against us in August 2007, in
    the United States District Court for the District of Arizona by
    a then-current employee on behalf of the federal government. All
    proceedings in the lawsuit had been under seal until
    September&#160;5, 2008, when the court unsealed the first
    amended complaint, which had been filed on August&#160;11, 2008.
    A <I>qui tam </I>case is a civil lawsuit brought by one or more
    individuals (a &#147;relator&#148;) on behalf of the federal
    government for an alleged submission to the government of a
    false claim for payment. The relator, often a current or former
    employee, is entitled to a share of the government&#146;s
    recovery in the case. A <I>qui tam </I>action is always filed
    under seal and remains under seal until the government decides
    whether to intervene in the case. If the government intervenes,
    it takes over primary control of the litigation. If the
    government declines to intervene in the case, the relator may
    nonetheless elect to continue to pursue the litigation at his or
    her own expense on behalf of the government. In our case, the
    <I>qui tam </I>lawsuit was initially filed under seal in August
    2007 and was unsealed and served on us following the
    government&#146;s decision not to intervene at that time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The <I>qui tam </I>lawsuit alleges, among other things, that we
    violated the False Claims Act by knowingly making false
    statements, and submitting false records or statements, from at
    least 2001 to the present, to get false or fraudulent claims
    paid or approved, and asserts that we have improperly
    compensated certain of our enrollment counselors in violation of
    the Title&#160;IV law governing compensation of such employees,
    and as a result, improperly received Title&#160;IV program
    funds. See &#147;Regulation&#160;&#151; Regulation of Federal
    Student Financial Aid Programs&#160;&#151; Incentive
    compensation rule.&#148; The complaint specifically alleges that
    some of our compensation practices with respect to our
    enrollment personnel, including providing non-cash awards, have
    violated the Title&#160;IV law governing compensation. While we
    believe that our compensation policies and practices at issue in
    the complaint have not been based on success in enrolling
    students in violation of applicable law, the Department of
    Education&#146;s regulations and interpretations of the
    incentive compensation law do not establish clear criteria for
    compliance in all circumstances and some of our practices,
    including in respect of non-cash awards, have not been within
    the scope of any specific &#147;safe harbor&#148; provided in
    the compensation regulations. The complaint seeks treble the
    amount of unspecified damages sustained by the federal
    government in connection with our receipt of Title&#160;IV
    funding, a civil penalty for each violation of the False Claims
    Act, attorneys&#146; fees, costs, and interest. We filed a
    motion to dismiss this case in November 2008, which was denied
    by the court in February 2009, and we have continued to
    vigorously contest this lawsuit. If it were determined that any
    of our compensation practices violated the incentive
    compensation law, we could experience an adverse outcome in the
    <I>qui tam </I>litigation and be subject to substantial monetary
    liabilities, fines, and other sanctions, any of which could have
    a material adverse effect on our business, prospects, financial
    condition and results of operations and could adversely affect
    our stock price. We cannot presently predict the ultimate
    outcome of this <I>qui tam</I> case or any liability or other
    sanctions that may result. It is possible that during the course
    of the litigation or the related Office of Inspector General
    investigation other information may be discovered that would
    adversely affect the outcome of the litigation.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the court&#146;s mandatory scheduling order, we have
    entered into settlement discussions with respect to the <I>qui
    tam </I>matter with the relator. In connection with such
    discussions, we are negotiating for a comprehensive settlement
    that would include, among other things, the resolution by the
    Office of Inspector General of its investigation. Accordingly,
    any such settlement would need to be approved not only by the
    relator, but by the U.S.&#160;Department of Justice (which has
    authority to approve settlements of False Claims Act matters),
    and the Department of Education. While we cannot assure you that
    this matter will be settled on terms acceptable to us or at all,
    we do not believe that any potential settlement, if in the
    amount (which we believe is generally in the range of other
    settlements of similar <I>qui tam </I>litigation against other
    for-profit education companies) and on the terms currently under
    discussion, will materially adversely affect our business,
    operations, or liquidity, although any charge taken in
    connection with such a potential settlement would likely be
    material to our operating results and cash flow for the periods
    affected by the charge. If such settlement does not occur, we
    would continue to vigorously defend this lawsuit.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Congress
    may change the eligibility standards or reduce funding for the
    Title&#160;IV programs, which could reduce our student
    population, revenue, and profit margin.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Political and budgetary concerns significantly affect the
    Title&#160;IV programs. The Higher Education Act, which is the
    federal law that governs the Title&#160;IV programs, must be
    periodically reauthorized by Congress, and was most recently
    reauthorized in August 2008. The new law contains numerous
    revisions to the requirements governing the Title&#160;IV
    programs. See &#147;Regulation&#160;&#151; Regulation of Federal
    Student Financial Aid Programs.&#148; In addition, Congress must
    determine funding levels for the Title&#160;IV programs on an
    annual basis, and can change the laws governing the
    Title&#160;IV programs at any time. Because a significant
    percentage of our revenue is derived from the Title&#160;IV
    programs, any action by Congress that significantly reduces
    Title&#160;IV program funding or our ability or the ability of
    our students to participate in the Title&#160;IV programs, or
    otherwise requires us to modify our practices with respect to
    Title&#160;IV programs, could increase our costs of compliance,
    reduce the ability of some students to finance their education
    at our institution, require us to seek to arrange for other
    sources of financial aid for our students, and materially
    decrease our student enrollment, each of which could have a
    material adverse effect on us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    do not meet specific financial responsibility standards
    established by the Department of Education, we may be required
    to post a letter of credit or accept other limitations in order
    to continue participating in the Title&#160;IV programs, or we
    could lose our eligibility to participate in the Title&#160;IV
    programs.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To participate in the Title&#160;IV programs, an institution
    must either satisfy specific quantitative standards of financial
    responsibility prescribed by the Department of Education, or
    post a letter of credit in favor of the Department of Education
    and possibly accept operating restrictions as well. These
    financial responsibility tests are applied to each institution
    on an annual basis based on the institution&#146;s audited
    financial statements, and may be applied at other times, such as
    if the institution undergoes a change in control. These tests
    may also be applied to an institution&#146;s parent company or
    other related entity. The operating restrictions that may be
    placed on an institution that does not meet the quantitative
    standards of financial responsibility include being transferred
    from the advance payment method of receiving Title&#160;IV funds
    to either the reimbursement or the heightened cash monitoring
    system, which could result in a significant delay in the
    institution&#146;s receipt of those funds. For example, when we
    were recertified by the Department of Education to participate
    in the Title&#160;IV programs in May 2005, the Department of
    Education reviewed our fiscal year 2004 audited financial
    statements and advised us that our composite score under the
    Department of Education&#146;s financial responsibility formula
    reflected financial weakness. As a result of this and other
    concerns about our administrative capability, the Department of
    Education required us to post a letter of credit, accept
    restrictions on the growth of our program offerings and
    enrollment, and receive Title&#160;IV funds under the heightened
    cash monitoring system of payment rather than by advance
    payment. In 2006 and 2007, the Department of Education
    eliminated each of these requirements and restrictions. However,
    if, in the future, we fail to satisfy the Department of
    Education&#146;s financial responsibility standards, we could
    experience increased regulatory compliance costs or delays in
    our receipt of Title&#160;IV funds because we could be required
    to post a letter of credit or be subjected to operating
    restrictions, or both. Our failure to secure a letter of credit
    in these circumstances could cause us to lose our ability to
    participate in the Title&#160;IV programs, which would
    materially adversely affect us.
</DIV>

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    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    do not comply with the Department of Education&#146;s
    administrative capability standards, we could suffer financial
    penalties, be required to accept other limitations in order to
    continue participating in the Title&#160;IV programs, or lose
    our eligibility to participate in the Title&#160;IV
    programs.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To continue participating in the Title&#160;IV programs, an
    institution must demonstrate to the Department of Education that
    the institution is capable of adequately administering the
    Title&#160;IV programs under specific standards prescribed by
    the Department of Education. These administrative capability
    criteria require, among other things, that the institution has
    an adequate number of qualified personnel to administer the
    Title&#160;IV programs, has adequate procedures for disbursing
    and safeguarding Title&#160;IV funds and for maintaining
    records, submits all required reports and financial statements
    in a timely manner, and does not have significant problems that
    affect the institution&#146;s ability to administer the
    Title&#160;IV programs. If we fail to satisfy any of these
    criteria, the Department of Education may assess financial
    penalties against us, restrict the manner in which we receive
    Title&#160;IV funds to us, require us to post a letter of
    credit, place us on provisional certification status, or limit
    or terminate our participation in the Title&#160;IV programs,
    any of which could materially adversely affect us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    would lose our ability to participate in the Title&#160;IV
    programs if we fail to maintain our institutional accreditation,
    and our student enrollments could decline if we fail to maintain
    any of our accreditations or approvals.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An institution must be accredited by an accrediting commission
    recognized by the Department of Education in order to
    participate in the Title&#160;IV programs. We have institutional
    accreditation by the Higher Learning Commission, which is an
    accrediting commission recognized by the Department of
    Education. To remain accredited, we must continuously meet
    accreditation standards relating to, among other things,
    performance, governance, institutional integrity, educational
    quality, faculty, administrative capability, resources, and
    financial stability. We were reaccredited by the Higher Learning
    Commission in 2007, and the next scheduled comprehensive
    evaluation will be conducted in
    <FONT style="white-space: nowrap">2016-2017.</FONT>
    While, during the 2007 reaccreditation process, the Higher
    Learning Commission concluded that we were in compliance with
    its accreditation standards, it did note certain deficiencies to
    be addressed by us. See &#147;Regulation&#160;&#151;
    Accreditation.&#148; In February 2009, we filed a monitoring
    report with the Higher Learning Commission addressing our
    progress in resolving these deficiencies and in March 2009, we
    received notification from the Higher Learning Commission that
    our report was accepted and that no further reports are
    required. The Higher Learning Commission is currently reviewing
    our request to operate at nine additional off-campus sites. If
    we fail to satisfy any of the Higher Learning Commission&#146;s
    standards, we could lose our accreditation by the Higher
    Learning Commission, which would cause us to lose our
    eligibility to participate in the Title&#160;IV programs and
    could cause a significant decline in our total student
    enrollments and have a material adverse effect on us. In
    addition, many of our individual educational programs are also
    accredited by specialized accrediting commissions or approved by
    specialized state agencies. If we fail to satisfy the standards
    of any of those specialized accrediting commissions or state
    agencies, we could lose the specialized accreditation or
    approval for the affected programs, which could result in
    materially reduced student enrollments in those programs and
    have a material adverse effect on us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    do not maintain our state authorization in Arizona, we may not
    operate or participate in the Title&#160;IV
    programs.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A school that grants degrees or certificates must be authorized
    by the relevant education agency of the state in which it is
    located. We are located in the state of Arizona and are
    authorized by the Arizona State Board for Private Postsecondary
    Education. State authorization is also required for our students
    to be eligible to receive funding under the Title&#160;IV
    programs. To maintain our state authorization, we must
    continuously meet standards relating to, among other things,
    educational programs, facilities, instructional and
    administrative staff, marketing and recruitment, financial
    operations, addition of new locations and educational programs,
    and various operational and administrative procedures. If we
    fail to satisfy any of these standards, we could lose our
    authorization by the Arizona State Board for Private
    Postsecondary Education to offer our
</DIV>

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    educational programs, which would also cause us to lose our
    eligibility to participate in the Title&#160;IV programs and
    have a material adverse effect on us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If any
    of the education regulatory agencies that regulate us do not
    approve or delay their approval of any transaction involving us
    that constitutes a &#147;change in control,&#148; our ability to
    operate or participate in the Title&#160;IV programs may be
    impaired.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we experience a change in control under the standards of the
    Department of Education, the Higher Learning Commission, the
    Arizona State Board for Private Postsecondary Education, or any
    other applicable state education agency or accrediting
    commission, we must notify and/or seek the approval of each such
    agency. These agencies do not have uniform criteria for what
    constitutes a change in control. Transactions or events that
    typically constitute a change in control include significant
    acquisitions or dispositions of the voting stock of an
    institution or its parent company, and significant changes in
    the composition of the board of directors of an institution or
    its parent company. Some of these transactions or events may be
    beyond our control. Our failure to obtain, or a delay in
    receiving, approval of any change in control from the Department
    of Education, the Higher Learning Commission, or the Arizona
    State Board for Private Postsecondary Education could impair our
    ability to operate or participate in the Title&#160;IV programs,
    which could have a material adverse effect on our business,
    prospects, financial condition, and results of operations. Our
    failure to obtain, or a delay in receiving, approval of any
    change in control from any other state in which we are currently
    licensed or authorized, or from any of our specialized
    accrediting commissions, could require us to suspend our
    activities in that state or suspend offering the applicable
    programs until we receive the required approval, or could
    otherwise impair our operations. The potential adverse effects
    of a change in control could influence future decisions by us
    and our stockholders regarding the sale, purchase, transfer,
    issuance, or redemption of our stock, which could discourage
    bids for your shares of our stock and could have an adverse
    effect on the market price of your shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with our initial public offering in November 2008,
    we submitted a description of the offering to the Department of
    Education, including a description of a proxy and voting
    agreement that certain of our stockholders entered into upon
    completion of the public offering, pursuant to which Brent D.
    Richardson, our Executive Chairman, and Christopher C.
    Richardson, our General Counsel and a director (collectively,
    the &#147;Richardson Voting Group&#148;), controlled the voting
    power of approximately 42.9% of our total outstanding voting
    stock after the initial public offering. See &#147;Certain
    Relationships and Related Transactions&#160;&#151; Voting
    Agreement.&#148; Based on this description, the Department of
    Education concluded that the initial public offering did not
    result in a change in control under the Department of
    Education&#146;s regulations. The Higher Learning Commission did
    consider our initial public offering to be a change in control
    under its policies and, while it approved our consummation of
    the offering, it informed us that it would conduct a site visit
    to confirm the appropriateness of the approval and to evaluate
    whether we continue to meet the Higher Learning
    Commission&#146;s eligibility criteria. The Higher Learning
    Commission conducted its site visit in March 2009 and
    determined, among other things, that the initial public offering
    was conducted in a manner that did not disrupt our ongoing
    operations and that no further action would be required as a
    result of the change in control. As a result, the Higher
    Learning Commission formally approved the change in control in
    June 2009. In addition, we notified the Arizona State Board for
    Private Postsecondary Education of our initial public offering
    and, based on our communications with that agency, we do not
    believe that our initial public offering constituted a change in
    control under Arizona law. We also notified other accrediting
    commissions and state agencies, as we believed necessary, of our
    initial public offering and the reasons why we believed the
    offering did not constitute a change in control under their
    respective standards, or to determine what was required if any
    such commission or agency did consider the offering to
    constitute a change in control. None of the other accrediting
    commissions and state agencies that we notified of our initial
    public offering has advised us that it concluded that the
    offering constituted a change in control under its policies or
    that it required us to take any further action.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With respect to publicly-traded corporations, like us,
    Department of Education regulations provide that a change in
    control occurs if either: (i)&#160;there is an event that would
    obligate the corporation to file a Current Report on
    <FONT style="white-space: nowrap">Form&#160;8-K</FONT>
    with the Securities and Exchange Commission, or the SEC,
    disclosing a change in
</DIV>

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    control, or (ii)&#160;the corporation has a stockholder that
    owns, or has voting control over, at least 25% of the total
    outstanding voting stock of the corporation and is the largest
    stockholder of the corporation, and that stockholder ceases to
    own, or have voting control over, at least 25% of such stock or
    ceases to be the largest stockholder. The Higher Learning
    Commission adopted new policies and procedures with respect to
    changes in control in June 2009, and one such policy provides
    that an institution is considered to undergo a change in control
    if a person or group increases or decreases its control of
    shares to greater than or less than 25% of the total outstanding
    shares of the stock of a parent corporation that owns or
    controls the accredited institution and, in such event, requires
    the institution to obtain its approval in advance of the change.
    In addition, the standards of the Arizona State Board for
    Private Postsecondary Education provide that an institution that
    is owned by a publicly-traded corporation whose control is
    vested in the voting members of the board of directors, like us,
    undergoes a change in control if 50% or more of the voting
    members of the board of directors change within a
    <FONT style="white-space: nowrap">12-month</FONT>
    period or the chief executive officer of the corporation
    changes. Based on the number of shares of common stock expected
    to be sold by us and the selling stockholders in this offering,
    we believe that the Richardson Voting Group will continue to
    have voting power over 25% or more of our total outstanding
    voting stock after the completion of the offering and that this
    offering will not constitute a change in control under the
    Department of Education&#146;s regulations or the Higher
    Learning Commission&#146;s policies. In addition, because no
    such changes with respect to our board of directors or chief
    executive officer will occur in connection with this offering,
    we believe that this offering will not constitute a change in
    control under the rules of the Arizona State Board for Private
    Postsecondary Education.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Even if this offering will not constitute a change of control
    under the Department of Education&#146;s regulations or the
    Higher Learning Commission&#146;s policies, under the terms of
    the voting agreement with the Richardson Voting Group, if any
    person party to the voting agreement transfers shares covered by
    the proxy in registered or open-market sales, the proxy is no
    longer effective as to such shares. Accordingly, the number of
    shares over which the Richardson Voting Group will continue to
    hold voting power pursuant to the voting agreement will decrease
    over time as shares held by other parties to the voting
    agreement are sold, and we may not be aware of these sales since
    many of the shares subject to the voting agreement are held in
    &#147;street name.&#148; If at any time in the future, as a
    result of such future registered or open-market sales, the
    number of shares over which the Richardson Voting Group holds
    voting power falls below 25%, a change in control will occur. At
    that point, with respect to the Department of Education, we will
    lose our eligibility to participate in the Title&#160;IV
    programs and must apply to the Department of Education in order
    to reestablish such eligibility. If we file the required
    application and follow other procedures, the Department of
    Education may temporarily certify us on a provisional basis
    following the change in control, so that our students retain
    access to Title&#160;IV program funds until the Department of
    Education completes its full review. In addition, the Department
    of Education will extend such temporary provisional
    certification if we timely file other required materials. While
    we expect to file all such applications and other materials
    within applicable deadlines, there is no assurance that we will
    be able to do so because we cannot be certain of the percentage
    of stock that is subject to the Richardson Voting Group at any
    given time in order to be certain if and when the Richardson
    Voting Group falls below the applicable 25% threshold. If we
    fail to meet any of these application and other deadlines, our
    certification will expire and our students will not be eligible
    to receive Title&#160;IV program funds until the Department of
    Education completes its full review, which commonly takes
    several months and may take longer. If the Department of
    Education approves our application after a change in control, it
    will certify us on a provisional basis for a period of up to
    approximately three years, although we cannot predict how the
    Department of Education will process this provisional
    recertification or what restrictions may be imposed if such
    change in control occurs while we remain on
    <FONT style="white-space: nowrap">month-to-month</FONT>
    status and subject to the ongoing investigation by the Office of
    Inspector General of the Department of Education or the <I>qui
    tam</I> lawsuit. See &#147;Regulation&#160;&#151; Regulatory
    Standards that May Restrict Institutional Expansion or Other
    Changes&#160;&#151; Change in ownership resulting in a change in
    control.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With respect to the Higher Learning Commission, if we anticipate
    that the number of shares over which the Richardson Voting Group
    holds voting power will fall below 25% at any time in the
    future, we would be required to obtain the approval of the
    Higher Learning Commission before such event occurs. However,
    because we may be unaware when such event occurs, we would plan
    to seek the cooperation of the Higher Learning Commission to
    allow us to arrange an appropriate review procedure at that time
    since there may not be an opportunity to obtain the Higher
    Learning Commission&#146;s advance review and approval, as is
    typically
</DIV>

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    required by its policies. In that circumstance, we cannot
    predict whether the Higher Learning Commission would impose any
    limitations or conditions on us, or identify any compliance
    issues related to us in the context of the change in control
    process, that could result in our loss of accreditation by the
    Higher Learning Commission. Any such loss of accreditation would
    result in our loss of eligibility to participate in the
    Title&#160;IV programs and cause a significant decline in our
    student enrollments.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If a
    substantial number of our students cannot secure Title&#160;IV
    loans as a result of decreased lender participation in the
    Title&#160;IV programs or if lenders increase the costs or
    reduce the benefits associated with the Title&#160;IV loans they
    provide, we could be materially adversely
    affected.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The cumulative impact of recent regulatory and market
    developments and conditions, including the widespread disruption
    in the credit and financial markets, has caused some lenders to
    cease providing Title&#160;IV loans to students, including some
    lenders that previously provided our students with Title&#160;IV
    loans, also known as Federal Family Education program loans, or
    FFEL loans. Other lenders have reduced the benefits and
    increased the fees associated with the Title&#160;IV loans they
    provide. We and other schools have had to modify student loan
    practices in ways that result in higher administrative costs. If
    the cost of Title&#160;IV loans increases or availability
    decreases, some students may not be able to take out loans and
    may not enroll in a postsecondary institution. In May 2008, new
    federal legislation was enacted to attempt to ensure that all
    eligible students would be able to obtain Title&#160;IV loans in
    the future and that a sufficient number of lenders would
    continue to provide Title&#160;IV loans. Among other things,
    that legislation:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    authorized the Department of Education to purchase Title&#160;IV
    loans from lenders, thereby providing capital to the lenders to
    enable them to continue making Title&#160;IV loans to
    students;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    permitted the Department of Education to designate institutions
    eligible to participate in a &#147;lender of last resort&#148;
    program, under which federally recognized student loan guaranty
    agencies would be required to make Title&#160;IV loans to all
    otherwise eligible students at those institutions.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    While this legislation appears to have provided some stability
    to the marketplace for Title&#160;IV loans, it is not yet clear
    if it ultimately will be effective in ensuring students&#146;
    access to Title&#160;IV loans. The environment surrounding
    access to and cost of student loans remains in a state of flux.
    The Department of Education proposed new regulations regarding
    student loans in July 2009, which could go into effect on
    July&#160;1, 2010, and Congress is in the process of considering
    legislation to eliminate the FFEL loan program and move all
    federal student lending into the Federal Direct Loan Program,
    known as the FDL program. The uncertainty surrounding these
    issues, and any resolution of these issues that increases loan
    costs or reduces students&#146; access to Title&#160;IV loans,
    may adversely affect our student enrollments. Although we are
    approved to participate in the FDL program, because a
    significant percentage of our revenue is derived from the
    Title&#160;IV programs, any action by Congress that
    significantly reduces Title&#160;IV program funding or our
    ability or the ability of our students to participate in the
    Title&#160;IV programs could increase our costs of compliance,
    reduce the ability of some students to finance their education
    at our institution, require us to seek to arrange for other
    sources of financial aid for our students and materially
    decrease our student enrollment, each of which could have a
    material adverse effect on us. In addition, a transition to the
    FDL program could cause disruptions in the administration of
    Title&#160;IV program loans to our students if we or the
    Department of Education encounter difficulties with the systems
    or processes necessary for increased FDL program loans.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    failure to comply with new regulations promulgated by the
    Department of Education could result in financial penalties, or
    the limitation, suspension, or termination of our continued
    participation in the Title&#160;IV programs.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Department of Education has been working since December 2008
    to develop regulations through a negotiated rulemaking process
    to carry out the numerous revisions to the Title&#160;IV program
    regulations required by the reauthorization of the Higher
    Education Act in August 2008. Negotiated rulemaking is a process
    whereby the Department of Education consults with members of the
    postsecondary education community to identify issues of concern
    and attempts to agree on proposed regulatory revisions to
    address those issues before the Department of Education formally
    proposes any regulations. Following the conclusion of such
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    negotiated rulemaking, in July and August 2009, the Department
    of Education proposed regulations relating to, among other
    things, the relationships between schools and lenders of both
    private and Title&#160;IV loans, the approval and oversight of
    accrediting agencies, and general programmatic requirements
    applicable to the Title&#160;IV programs, including the
    &#147;90/10 Rule.&#148; The Department of Education is expected
    to publish new final regulations by November&#160;1, 2009, which
    is the required deadline in order for such regulations to take
    effect on July&#160;1, 2010. In addition, in May 2009, the
    Department of Education announced its intent to establish new
    negotiated rulemaking committees that are expected to begin
    their discussions as soon as the fall of 2009, and to address a
    number of significant issues, including: compensation paid by
    institutions to persons or entities engaged in student
    recruiting or admission activities; the determination of
    satisfactory academic progress under different academic
    calendars; state authorization as a component of institutional
    eligibility; the definition of a credit hour for purposes of
    determining program eligibility status, particularly in the
    context of awarding Pell Grants; verification of information on
    student financial aid applications; and the definition of a high
    school diploma as a condition of a student&#146;s eligibility
    for Title&#160;IV aid.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The issues addressed in the regulations that have been or are
    expected to be proposed by the Department of Education, as well
    as the issues to be addressed in the upcoming negotiated
    rulemaking process, are broad and complex and concern a number
    of significant aspects of the Title&#160;IV programs, including
    eligibility and certification, administrative capability,
    school-lender relationships, the &#147;90/10 Rule,&#148;
    incentive compensation, and student loan default rates. See
    &#147;Regulation&#160;&#151; Regulation of Student Financial Aid
    Programs&#160;&#151; The 90/10 Rule.&#148; At this time, we
    cannot be certain whether and to what extent any changes may
    affect our ability to remain eligible to participate in the
    Title&#160;IV programs or require us to incur additional costs
    in connection with our administration of the Title&#160;IV
    programs. Any future changes that jeopardize our eligibility to
    participate in some or all of the Title&#160;IV programs could
    materially adversely affect us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">An
    increase in interest rates could adversely affect our ability to
    attract and retain students.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For our fiscal years ended December&#160;31, 2007 and 2008, we
    derived cash receipts equal to approximately 70.2% and 74.4%,
    respectively, of our net revenue from tuition financed under the
    Title&#160;IV programs, which include student loans with
    interest rates subsidized by the federal government.
    Additionally, some of our students finance their education
    through private loans that are not subsidized. If our
    students&#146; employment circumstances are adversely affected
    by regional or national economic downturns, they may be more
    heavily dependent on student loans. Interest rates have reached
    relatively low levels in recent years, creating a favorable
    borrowing environment for students. However, in the event
    interest rates increase or Congress decreases the amount
    available for federal student aid, our students may have to pay
    higher interest rates on their loans. Any future increase in
    interest rates will result in a corresponding increase in
    educational costs to our existing and prospective students,
    which could result in a significant reduction in our student
    population and revenues. Higher interest rates could also
    contribute to higher default rates with respect to our
    students&#146; repayment of their education loans. Higher
    default rates may in turn adversely impact our eligibility to
    participate in some or all of the Title&#160;IV programs, which
    could result in a significant reduction in our student
    population and our profitability. See &#147;We may lose our
    eligibility to participate in the Title&#160;IV programs if our
    student loan default rates are too high&#148; located elsewhere
    in &#147;Risk Factors&#148; for further information.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    failure to comply with the regulatory requirements of states
    other than Arizona could result in actions taken by those states
    that could have a material adverse effect on our
    enrollments.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Almost every state imposes regulatory requirements on
    educational institutions that have physical facilities located
    within the state&#146;s boundaries. These regulatory
    requirements establish standards in areas such as educational
    programs, facilities, instructional and administrative staff,
    marketing and recruitment, financial operations, addition of new
    locations and educational programs, and various operational and
    administrative procedures, some of which are different than the
    standards prescribed by the Department of Education or the
    Arizona State Board for Private Postsecondary Education. In
    addition, several states have sought to assert jurisdiction over
    educational institutions offering online degree programs that
    have no physical location in the state but that have some
    activity in the state, such as enrolling or offering educational
    services to students who
</DIV>

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    <BR>
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    reside in the state, employing faculty who reside in the state,
    or advertising to or recruiting prospective students in the
    state. State regulatory requirements for online education vary
    among the states, are not well developed in many states, are
    imprecise or unclear in some states, and can change frequently.
    In the future, states could coordinate their efforts in order to
    more aggressively attempt to regulate or restrict schools&#146;
    offering of online education.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to Arizona, we have determined that our activities
    in certain states constitute a presence requiring licensure or
    authorization under the requirements of the state education
    agency in those states. In certain other states, we have
    obtained approvals to operate as we have determined necessary in
    connection with our marketing and recruiting activities. If we
    fail to comply with state licensing or authorization
    requirements for a state, or fail to obtain licenses or
    authorizations when required, we could lose our state licensure
    or authorization by that state or be subject to other sanctions,
    including restrictions on our activities in that state, fines,
    and penalties. The loss of licensure or authorization in a state
    other than Arizona could prohibit us from recruiting prospective
    students or offering educational services to current students in
    that state, which could significantly reduce our enrollments and
    revenues and materially adversely effect us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    State laws and regulations are not always precise or clear, and
    regulatory agencies may sometimes disagree with the way we have
    interpreted or applied these requirements. Any misinterpretation
    by us of these regulatory requirements or adverse changes in
    regulations or interpretations thereof by regulators could
    materially adversely affect us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    inability of our graduates to obtain a professional license or
    certification in their chosen field of study could reduce our
    enrollments and revenues, and potentially lead to student claims
    against us that could be costly to us.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Many of our students, particularly those in our education and
    healthcare programs, seek a professional license or
    certification in their chosen fields following graduation. A
    student&#146;s ability to obtain a professional license or
    certification depends on several factors, including whether the
    institution and the student&#146;s program were accredited by a
    particular accrediting commission or approved by a professional
    association or by the state in which the student seeks
    employment. Additional factors are outside the control of the
    institution, such as the individual student&#146;s own
    background and qualifications. If one or more states refuse to
    recognize a significant number of our students for professional
    licensing or certification based on factors relating to our
    institution or programs, the potential growth of those programs
    would be negatively impacted and we could be exposed to claims
    or litigation by students or graduates based on their inability
    to obtain their desired professional license or certification,
    each of which could materially adversely affect us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Increased
    scrutiny and regulation by various governmental agencies of
    relationships between student loan providers and educational
    institutions and their employees have produced significant
    uncertainty concerning restrictions applicable to the
    administration of both Title&#160;IV and private student loan
    programs and the funding for those programs which, if not
    satisfactorily or timely resolved, could result in increased
    regulatory burdens and costs for us and could adversely affect
    our student enrollments.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During 2007 and 2008, both Title&#160;IV and private student
    loan programs came under increased scrutiny by the Department of
    Education, Congress, state attorneys general, and other parties.
    Issues that received extensive attention included allegations of
    conflicts of interest between some institutions and lenders that
    provide student loans, questionable incentives given by lenders
    to some schools and school employees, allegations of deceptive
    practices in the marketing of student loans, and schools leading
    students to use certain lenders. Several institutions and
    lenders were cited for these problems and paid several million
    dollars in the aggregate to settle those claims. The practices
    of numerous other schools and lenders were, and in some cases
    continue to be, examined by government agencies at the federal
    and state level. The Attorney General of the State of Arizona
    requested extensive documentation from us and other institutions
    in Arizona concerning student loan practices, and we provided
    testimony in response to a subpoena from the Attorney General of
    the State of Arizona about such practices. In 2008, without
    admitting any wrongdoing, we agreed with the Attorney General of
    the State of Arizona to conclude its investigation of us by
    executing a Letter of Assurance, whereby we agreed to conduct
    referrals of students to lenders in accordance with our existing
</DIV>

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    <BR>
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    policies or any new policies promulgated by the State of Arizona
    in the future and to reimburse the state for the costs of its
    investigation in the amount of approximately $20,000.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of the increased scrutiny of student loan programs,
    Congress has passed new laws, the Department of Education and
    the Board of Governors of the Federal Reserve System have
    promulgated or proposed new and stricter regulations, and
    several states have adopted codes of conduct or enacted state
    laws that further regulate the conduct of lenders, schools, and
    school personnel. These new laws and regulations, among other
    things, limit schools&#146; relationships with lenders, restrict
    the types of services that schools may receive from lenders,
    prohibit lenders from providing other types of loans to students
    in exchange for Title&#160;IV loan volume from schools, and
    require schools and lenders to provide additional information to
    students concerning institutionally preferred lenders and the
    terms of available student loans. The environment surrounding
    access to and cost of student loans remains in a state of flux,
    with additional legislation and regulatory changes being
    considered at the state and federal levels. The Department of
    Education proposed new regulations regarding student loans in
    July 2009, which could go into effect on July&#160;1, 2010, and
    Congress is considering legislation to eliminate the FFEL loan
    program and move all federal student lending into the FDL
    program. This uncertainty, and any resolution of these issues
    that increases loan costs or reduces students&#146; access to
    student loans, may adversely affect our student enrollments,
    which could have an adverse effect on us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Government
    agencies, regulatory agencies, and third parties may conduct
    compliance reviews, bring claims, or initiate litigation against
    us based on alleged violations of the extensive regulatory
    requirements applicable to us, which could cause us to pay
    monetary damages, be sanctioned or limited in our operations,
    and expend significant resources to defend against those
    claims.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because we operate in a highly regulated industry, we are
    subject to program reviews, audits, investigations, claims of
    non-compliance, and lawsuits by government agencies, regulatory
    agencies, students, employees, stockholders, and other third
    parties alleging non-compliance with applicable legal
    requirements, many of which are imprecise and subject to
    interpretation. As we grow larger, this scrutiny of our business
    may increase. If the result of any such proceeding is
    unfavorable to us, we may lose or have limitations imposed on
    our state licensing, accreditation, or Title&#160;IV program
    participation; be required to pay monetary damages (including
    triple damages in certain whistleblower suits); or be subject to
    fines, injunctions, or other penalties, any of which could have
    a material adverse effect on our business, prospects, financial
    condition, and results of operations. In this regard, we are
    currently subject to an investigation by the Department of
    Education&#146;s Office of Inspector General, which is focused
    on the manner in which we have compensated our enrollment
    counselors and managers, and a <I>qui tam </I>lawsuit brought by
    a former employee alleging violations in the same area. See
    &#147;Risk Factors&#160;&#151; The Office of Inspector General
    of the Department of Education has commenced an investigation of
    Grand Canyon University, which is ongoing and which may result
    in fines, penalties, other sanctions, and damage to our
    reputation in the industry,&#148; &#147;Risk Factors&#160;&#151;
    A <I>qui tam </I>lawsuit has been filed against us alleging,
    among other things, that we have improperly compensated certain
    of our enrollment counselors, and we may incur liability, be
    subject to sanctions, or experience damage to our reputation as
    a result of this lawsuit,&#148; and &#147;Regulation&#160;&#151;
    Regulation of Federal Student Financial Aid Programs&#160;&#151;
    Incentive compensation rule.&#148; Claims and lawsuits brought
    against us, even if they are without merit, may also result in
    adverse publicity, damage our reputation, negatively affect the
    market price of our stock, adversely affect our student
    enrollments, and reduce the willingness of third parties to do
    business with us. Even if we adequately address the issues
    raised by any such proceeding and successfully defend against
    it, we may have to devote significant financial and management
    resources to address these issues, which could harm our business.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">A
    decline in the overall growth of enrollment in postsecondary
    institutions, or in the number of students seeking degrees
    online or in our core disciplines, could cause us to experience
    lower enrollment at our schools, which could negatively impact
    our future growth.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    According to a March 2009 report from the NCES, enrollment in
    degree-granting, postsecondary institutions is projected to grow
    10.0% over the ten-year period ending fall 2017 to approximately
</DIV>

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    20.1&#160;million. This growth is slower than the 25.8% increase
    reported in the prior ten-year period ended in fall 2007, when
    enrollment increased from 14.5&#160;million in 1997 to
    18.2&#160;million in 2007. Similarly, a 2008 study by
    Eduventures, LLC, projects a compound annual growth rate of
    12.5% in online postsecondary education enrollment over the
    five-year period ending fall 2013, which represents an aggregate
    increase in online enrollment of 1.5&#160;million. This growth
    is slower than the 25.3% compound annual growth rate in the
    prior five-year period ending fall 2008, which represented an
    aggregate increase in online enrollment of 1.3&#160;million. In
    addition, according to a March 2008 report from the Western
    Interstate Commission for Higher Education, the number of high
    school graduates that are eligible to enroll in degree-granting,
    postsecondary institutions is expected to peak at approximately
    3.3&#160;million for the class of 2008, falling in the period
    between
    <FONT style="white-space: nowrap">2007-08</FONT> and
    <FONT style="white-space: nowrap">2013-14</FONT> by
    about 150,000 in total before resuming a growth pattern for the
    foreseeable future thereafter. In order to maintain current
    growth rates, we will need to attract a larger percentage of
    students in existing markets and expand our markets by creating
    new academic programs. In addition, if job growth in the fields
    related to our core disciplines is weaker than expected, as a
    result of any regional or national economic downturn or
    otherwise, fewer students may seek the types of degrees that we
    offer. Our failure to attract new students, or the decisions by
    prospective students to seek degrees in other disciplines, would
    have an adverse impact on our future growth.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If our
    students were unable to obtain private loans from third-party
    lenders, our business could be adversely affected given our
    students&#146; reliance on such loans to satisfy their
    educational expenses.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the fiscal year ended December&#160;31, 2008, private
    loans to students at our school represented approximately 2.9%
    of our revenue (calculated on a cash basis) as compared to 5.1%
    of revenue in fiscal 2007. These loans were provided pursuant to
    private loan programs and were made available to eligible
    students to fund a portion of the students&#146; costs of
    education not covered by the Title&#160;IV programs and state
    financial aid sources. Private loans are made to our students by
    lending institutions and are non-recourse to us. The 2008
    reauthorization of the Higher Education Act and related proposed
    and final regulations place significant new restrictions on the
    relationships between institutions and the providers of private
    loans, and require that certain specific terms and disclosures
    accompany such loans. This increased regulatory burden, coupled
    with recent adverse market conditions for consumer and federally
    guaranteed student loans (including lenders&#146; difficulties
    in reselling or syndicating student loan portfolios) have
    resulted, and could continue to result, in providers of private
    loans reducing the availability of or increasing the costs
    associated with providing private loans to postsecondary
    students. In particular, loans to students with low credit
    scores who would not otherwise be eligible for credit-based
    private loans have become increasingly difficult to obtain.
    Prospective students may find that these increased financing
    costs make borrowing prohibitively expensive and abandon or
    delay enrollment in postsecondary education programs. If any of
    these scenarios were to occur, our students&#146; ability to
    finance their education could be adversely affected and our
    student population could decrease, which could have a material
    adverse effect on our business, prospects, financial condition,
    and results of operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We are
    subject to sanctions if we pay impermissible commissions,
    bonuses, or other incentive payments to persons involved in
    certain recruiting, admissions, or financial aid
    activities.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A school participating in the Title&#160;IV programs may not
    provide, or contract with a third party that provides, any
    commission, bonus, or other incentive payment based on success
    in enrolling students or securing financial aid to any person
    involved in student recruiting or admission activities or in
    making decisions regarding the awarding of Title&#160;IV program
    funds. The Department of Education&#146;s regulations set forth
    12 &#147;safe harbors&#148; which describe payments and
    arrangements that do not violate the incentive compensation
    rule. The Department of Education&#146;s regulations make clear
    that the safe harbors are not a complete list of permissible
    practices under this law. One of these safe harbors permits
    adjustments to fixed salary for enrollment personnel provided
    that such adjustments are not made more than twice during any
    twelve month period, and that any adjustment is not based solely
    on the number of students recruited, admitted, enrolled, or
    awarded financial aid. In addition, such safe harbors do not
    address non-cash awards to enrollment personnel.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As described in &#147;Risk Factors&#160;&#151; The Office of
    Inspector General of the Department of Education has commenced
    an investigation of Grand Canyon University, which is ongoing
    and which may result in fines, penalties, other sanctions, and
    damage to our reputation in the industry,&#148; and in
    &#147;Regulation&#160;&#151; Regulation of Federal Student
    Financial Aid Programs&#160;&#151; Incentive compensation
    rule,&#148; we are currently subject to an investigation by the
    Department of Education&#146;s Office of Inspector General,
    which is focused on the manner in which we have compensated our
    enrollment counselors and managers. In addition, in recent years
    several for-profit education companies, including us, have been
    faced with whistleblower lawsuits, known as <I>&#147;qui
    tam&#148; </I>cases, by current or former employees alleging
    violations of this prohibition. See &#147;Risk
    Factors&#160;&#151; A qui tam lawsuit has been filed against us
    alleging, among other things, that we have improperly
    compensated certain of our enrollment counselors, and we may
    incur liability, be subject to sanctions, or experience damage
    to our reputation as a result of this lawsuit.&#148; While we
    believe that our compensation policies and practices at issue in
    the complaint have not been based on success in enrolling
    students in violation of applicable law, the Department of
    Education&#146;s regulations and interpretations of the
    incentive compensation law do not establish clear criteria for
    compliance in all circumstances and some of our practices,
    including in respect of non-cash awards, have not been within
    the scope of any specific &#147;safe harbor&#148; provided in
    the compensation regulations. If the Department of Education
    determines as a result of the pending investigation that we have
    violated this law, if we are found to be liable in the pending
    <I>qui tam </I>action, or if we or any third parties we have
    engaged otherwise violate this law, we could be fined or
    sanctioned by the Department of Education, or subjected to other
    monetary liability or penalties that could be substantial, any
    of which could harm our reputation, impose significant costs on
    us, and have a material adverse effect on our business,
    prospects, financial condition, and results of operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    reputation and our stock price may be negatively affected by
    adverse publicity or by the actions of other postsecondary
    educational institutions.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In recent years, regulatory proceedings and litigation have been
    commenced against various postsecondary educational institutions
    relating to, among other things, deceptive trade practices,
    false claims against the government, and non-compliance with
    Department of Education requirements, state education laws, and
    state consumer protection laws. These proceedings have been
    brought by the Department of Education, the U.S.&#160;Department
    of Justice, the SEC, and state governmental agencies, among
    others. These allegations have attracted adverse media coverage
    and have been the subject of legislative hearings and regulatory
    actions at both the federal and state levels, focusing not only
    on the individual schools but in some cases on the for-profit
    postsecondary education sector as a whole. Adverse media
    coverage regarding other for-profit education companies or other
    educational institutions could damage our reputation, result in
    lower enrollments, revenues, and operating profit, and have a
    negative impact on our stock price. Such coverage could also
    result in increased scrutiny and regulation by the Department of
    Education, Congress, accrediting commissions, state
    legislatures, state attorneys general, or other governmental
    authorities of all educational institutions, including us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If the
    percentage of our revenue that is derived from the Title&#160;IV
    programs is too high, we may lose our eligibility to participate
    in those programs.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A for-profit institution loses its eligibility to participate in
    the Title&#160;IV programs if, under a formula that requires
    cash basis accounting and other adjustments to the calculation
    of revenue, it derives more than 90% of its revenues from those
    programs in two consecutive fiscal years. The period of
    ineligibility covers at least the next two succeeding fiscal
    years and any Title&#160;IV funds already received by the
    institution and its students during the period of ineligibility
    would have to be returned to the applicable lender or the
    Department of Education. An institution whose rate exceeds 90%
    for any single year will be placed on provisional certification
    for at least two fiscal years. The August 2008 reauthorization
    of the Higher Education Act made significant changes to this
    revenue requirement, including certain changes to the formula
    used to calculate a school&#146;s ratio. Using the Department of
    Education&#146;s formula that was in effect prior to the August
    2008 reauthorization of the Higher Education Act, we have
    calculated that, for our 2007 and 2008 fiscal years, we derived
    approximately 74.0% and 78.6%, respectively, of our revenue from
    the Title&#160;IV programs. We are currently assessing what
    impact, if any, the revised formula and other changes in federal
    law will have on our 90/10 calculation. As a result of recent
    changes in federal law that increased Title&#160;IV grant and
    loan limits, as
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    well as the current economic downturn, which has adversely
    affected the employment circumstances of our students and their
    parents and increased their reliance on Title&#160;IV programs,
    we expect the percentage of our revenue that we receive from the
    Title&#160;IV programs to continue to increase in the future,
    making it more difficult for us to satisfy this requirement.
    Exceeding the 90% threshold such that we lost our eligibility to
    participate in the Title&#160;IV programs would have a material
    adverse effect on our business, prospects, financial condition,
    and results of operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    lose our eligibility to participate in the Title&#160;IV
    programs if our student loan default rates are too
    high.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An institution may lose its eligibility to participate in some
    or all of the Title&#160;IV programs if, for three consecutive
    years, 25% or more of its students who were required to begin
    repayment on their student loans in one year default on their
    payment by the end of the following year. In addition, an
    institution may lose its eligibility to participate in some or
    all of the Title&#160;IV programs if the default rate of its
    students exceeds 40% for any single year. The August 2008
    reauthorization of the Higher Education Act extends by one year
    the period for which students&#146; defaults on their loans will
    be included in the calculation of an institution&#146;s default
    rate, a change that is expected to increase our cohort default
    rates. The new law also increases the threshold for an
    institution to lose its eligibility to participate in the
    relevant Title&#160;IV programs from 25% to 30% over three
    consecutive years, while leaving the threshold at 40% for a
    single year. These changes to the law take effect for
    institutions&#146; cohort default rates for federal fiscal year
    2009, which are expected to be calculated and issued by the
    Department of Education in 2012. While our cohort default rates
    have historically been significantly below these levels, we
    cannot assure you that this will continue to be the case. For
    example, we expect our cohort default rate for the 2008 federal
    fiscal year to increase (but remain well below the Department of
    Education&#146;s thresholds) due primarily to the impact of
    current economic conditions on our students and former students.
    In addition, increases in interest rates or declines in income
    or job losses for our students could contribute to higher
    default rates on student loans. Exceeding the student loan
    default rate thresholds and losing our eligibility to
    participate in the Title&#160;IV programs would have a material
    adverse effect on our business, prospects, financial condition,
    and results of operations. Any future changes in the formula for
    calculating student loan default rates, economic conditions, or
    other factors that cause our default rates to increase, could
    place us in danger of losing our eligibility to participate in
    some or all of the Title&#160;IV programs and materially
    adversely affect us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We are
    subject to sanctions if we fail to correctly calculate and
    timely return Title&#160;IV program funds for students who
    withdraw before completing their educational
    program.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A school participating in the Title&#160;IV programs must
    calculate the amount of unearned Title&#160;IV program funds
    that it has disbursed to students who withdraw from their
    educational programs before completing such programs and must
    return those unearned funds to the appropriate lender or the
    Department of Education in a timely manner, generally within
    45&#160;days of the date the school determines that the student
    has withdrawn. If the unearned funds are not properly calculated
    and timely returned for a sufficient percentage of students, we
    may have to post a letter of credit in favor of the Department
    of Education equal to 25% of the Title&#160;IV funds that should
    have been returned for such students in the prior fiscal year,
    we may be liable for repayment of Title&#160;IV funds and
    related interest and we could be fined or otherwise sanctioned
    by the Department of Education, which could increase our cost of
    regulatory compliance and materially adversely affect us.
    Further, a failure to comply with these regulatory requirements
    could result in termination of our ability to participate in the
    Title&#160;IV programs, which would materially affect us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    cannot offer new programs, expand our operations into certain
    states, or acquire additional schools if such actions are not
    timely approved by the applicable regulatory agencies, and we
    may have to repay Title&#160;IV funds disbursed to students
    enrolled in any such programs, schools, or states if we do not
    obtain prior approval.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our expansion efforts include offering new educational programs.
    In addition, we may increase our operations in additional states
    and seek to acquire existing schools from other companies. If we
    are unable to
</DIV>

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    <BR>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    obtain the necessary approvals for such new programs,
    operations, or acquisitions from the Department of Education,
    the Higher Learning Commission, the Arizona State Board for
    Private Postsecondary Education, or any other applicable state
    education agency or accrediting commission, or if we are unable
    to obtain such approvals in a timely manner, our ability to
    consummate the planned actions and provide Title&#160;IV funds
    to any affected students would be impaired, which could have a
    material adverse effect on our expansion plans. If we were to
    determine erroneously that any such action did not need approval
    or that we had all required approvals, we could be liable for
    repayment of the Title&#160;IV program funds provided to
    students in that program or at that location.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Our Business</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    success depends, in part, on the effectiveness of our marketing
    and advertising programs in recruiting new
    students.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Building awareness of Grand Canyon University and the programs
    we offer is critical to our ability to attract prospective
    students. It is also critical to our success that we convert
    prospective students to enrolled students in a cost-effective
    manner and that these enrolled students remain active in our
    programs. Some of the factors that could prevent us from
    successfully recruiting, enrolling, and retaining students in
    our programs include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the reduced availability of, or higher interest rates and other
    costs associated with, Title&#160;IV loan funds or other sources
    of financial aid;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the emergence of more successful competitors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    factors related to our marketing, including the costs and
    effectiveness of Internet advertising and broad-based branding
    campaigns and recruiting efforts;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    performance problems with our online systems;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure to maintain institutional and specialized accreditations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the requirements of the education agencies that regulate us
    which restrict schools&#146; initiation of new programs and
    modification of existing programs;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the requirements of the education agencies that regulate us
    which restrict the ways schools can compensate their recruitment
    personnel;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    increased regulation of online education, including in states in
    which we do not have a physical presence;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    restrictions that may be imposed on graduates of online programs
    that seek certification or licensure in certain states;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    student dissatisfaction with our services and programs;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the results of the ongoing investigation by the Department of
    Education&#146;s Office of Inspector General and the pending
    <I>qui tam</I> action regarding the manner in which we have
    compensated our enrollment personnel, and possible remedial
    actions or other liability resulting therefrom;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    damage to our reputation or other adverse effects as a result of
    negative publicity in the media, in industry or governmental
    reports, or otherwise, affecting us or other companies in the
    for-profit postsecondary education sector;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    price reductions by competitors that we are unwilling or unable
    to match;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a decline in the acceptance of online education;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an adverse economic or other development that affects job
    prospects in our core disciplines;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a decrease in the perceived or actual economic benefits that
    students derive from our programs.
</TD>
</TR>

</TABLE>

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    <BR>
    24
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we are unable to continue to develop awareness of Grand
    Canyon University and the programs we offer, and to recruit,
    enroll, and retain students, our enrollments would suffer and
    our ability to increase revenues and maintain profitability
    would be significantly impaired.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    are unable to hire and train new and existing employees
    responsible for student recruitment, the effectiveness of our
    student recruiting efforts would be adversely
    affected.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to support our planned revenue growth we intend to
    hire, develop, and train a significant number of additional
    employees responsible for student recruitment and retain and
    continue to develop and train our current student recruitment
    personnel. Our ability to develop and maintain a strong student
    recruiting function may be affected by a number of factors,
    including our ability to integrate and motivate our enrollment
    counselors, our ability to effectively train our enrollment
    counselors, the length of time it takes new enrollment
    counselors to become productive, regulatory restrictions on the
    method of compensating enrollment counselors, and the
    competition in hiring and retaining enrollment counselors. If we
    are unable to hire, develop, and retain a sufficient number of
    qualified enrollment counselors, our ability to increase
    enrollments would be adversely affected.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    operate in a highly competitive industry, and competitors with
    greater resources could harm our business.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The postsecondary education market is highly fragmented and
    competitive. We compete for students with traditional public and
    private two-year and four-year colleges and universities and
    other for-profit schools, including those that offer online
    learning programs. Many public and private schools, colleges,
    and universities, including most major colleges and
    universities, offer online programs. We expect to experience
    additional competition in the future as more colleges,
    universities, and for-profit schools offer an increasing number
    of online programs. Each of these competitors may develop
    platforms or other technologies, including technologies such as
    streaming video, that allow for greater levels of interactivity
    between faculty and students and that are superior to the
    platform and technology we use, and these differences may affect
    our ability to recruit and retain students. Public institutions
    receive substantial government subsidies, and public and private
    non-profit institutions have access to government and foundation
    grants, tax-deductible contributions, and other financial
    resources generally not available to for-profit schools.
    Accordingly, public and private non-profit institutions may have
    instructional and support resources superior to those in the
    for-profit sector, and public institutions can offer
    substantially lower tuition prices. Some of our competitors in
    both the public and private sectors also have substantially
    greater financial and other resources than we do. We may not be
    able to compete successfully against current or future
    competitors, including with respect to our ability to acquire or
    compete with technologies being developed by our competitors,
    and may face competitive pressures that could adversely affect
    our business, prospects, financial condition, and results of
    operations. These competitive factors could cause our
    enrollments, revenues, and profitability to significantly
    decrease and could render our online delivery format less
    competitive or obsolete.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Capacity
    constraints, system disruptions, or security breaches in our
    online computer networks could have a material adverse effect on
    our ability to attract and retain students.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The performance and reliability of the infrastructure of our
    online operations are critical to our reputation and to our
    ability to attract and retain students. Any computer system
    disruption or failure, or a sudden and significant increase in
    traffic on the servers that host our online operations, may
    result in our online courses and programs being unavailable for
    a period of time. In addition, any significant failure of our
    computer networks or servers, whether as a result of third-party
    actions or in connection with planned upgrades and conversions,
    could disrupt our on-campus operations. Individual, sustained,
    or repeated occurrences could significantly damage the
    reputation of our online operations and result in a loss of
    potential or existing students. Additionally, our online
    operations are vulnerable to interruption or malfunction due to
    events beyond our control, including natural disasters and
    network and telecommunications failures. Our computer networks
    may also be vulnerable to unauthorized access, computer hackers,
    computer viruses, and other security problems. A user who
    circumvents security measures could misappropriate proprietary
    information or
</DIV>

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    <BR>
    25
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    cause interruptions to or malfunctions in operations. As a
    result, we may be required to expend significant resources to
    protect against the threat of these security breaches or to
    alleviate problems caused by these incidents. Any interruption
    to our online operations could have a material adverse effect on
    our ability to attract students to our online programs and to
    retain those students.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    implementation of our new back office systems could impact our
    ability to timely and accurately admit students to the
    university and register them for classes, bill students, certify
    and disburse financial aid, prepare financial reports, or impact
    the effectiveness of our internal controls over financial
    reporting.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We plan to transition our online programs from a
    &#147;term-based&#148; financial aid system (where all students,
    including online students, begin programs and are eligible to
    receive financial aid at periodic start dates pursuant to a
    calendar-based term system) to a &#147;borrower-based&#148;
    financial aid system (where each student may begin a program and
    be eligible to receive financial aid at any time throughout the
    year). As part of this transition, we are converting our back
    office system from Datatel, Inc. to a series of programs
    developed by Campus Management Corp., including CampusVue and
    CampusPortal, and also implementing Microsoft&#146;s Great
    Plains accounting system. These new systems are intended to
    allow us to manage our non-traditional online students with
    greater ease and flexibility by providing for rolling and
    flexible start dates. While we intend to maintain redundancies
    between our old and new systems for a period of time while we
    complete the conversions and ensure the that the new systems
    operate as intended, if we do not effectively transition our
    student and financial aid data to these systems or if these
    systems do not operate as intended, it could adversely impact
    the effectiveness of our internal controls over financial
    reporting, as well as our ability to timely and accurately admit
    students to the university and register them for classes, bill
    students, certify and disburse financial aid, and prepare
    financial reports. This may in turn affect our ability to comply
    with the Department of Education&#146;s administrative
    capability standards, as discussed under &#147;Risk
    Factors&#160;&#151; If we do not comply with the Department of
    Education&#146;s administrative capability standards, we could
    suffer financial penalties, be required to accept other
    limitations in order to continue participating in the
    Title&#160;IV programs, or lose our eligibility to participate
    in the Title&#160;IV programs.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    not be able to successfully implement our growth strategy if we
    are not able to improve the content of our existing academic
    programs or to develop new programs on a timely basis and in a
    <FONT style="white-space: nowrap">cost-effective</FONT>
    manner, or at all.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We continually seek to improve the content of our existing
    programs and develop new programs in order to meet changing
    market needs. The success of any of our programs and courses,
    both ground and online, depends in part on our ability to expand
    the content of our existing programs, develop new programs in a
    cost-effective manner, and meet the needs of existing and
    prospective students and employers in a timely manner, as well
    as on the acceptance of our actions by existing or prospective
    students and employers. We developed many of our online programs
    based on our existing ground programs. In the future, we may
    develop programs solely, or initially, for online use, which may
    pose new challenges, including the need to develop course
    content without having an existing program on which such content
    can be based. Even if we are able to develop acceptable new
    programs, we may not be able to introduce these new programs in
    a timely fashion or as quickly as our competitors are able to
    introduce competing programs. If we do not respond adequately to
    changes in market conditions, our ability to attract and retain
    students could be impaired and our business, prospects,
    financial condition, and results of operations could suffer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The development and approval of new programs and courses, both
    ground and online, are subject to requirements and limitations
    imposed by the Department of Education, state licensing
    agencies, and the relevant accrediting commissions, and in
    certain cases, such as with our newly approved doctoral program
    in education, involves a process that can take several years to
    complete. The imposition of restrictions on the initiation of
    new educational programs by any of our regulatory agencies, or
    delays in obtaining approvals of such programs, may delay our
    expansion plans. Establishing new academic programs or modifying
    existing academic programs may also require us to make
    investments in specialized personnel, increase marketing
    efforts, and reallocate resources. We may have limited
    experience with the subject matter of new programs.
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we are unable to expand our existing programs, offer new
    programs on a timely basis or in a cost-effective manner, or
    otherwise manage effectively the operations of newly established
    programs, our business, prospects, financial condition, and
    results of operations could be adversely affected.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    failure to keep pace with changing market needs and technology
    could harm our ability to attract students.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our success depends to a large extent on the willingness of
    employers to employ, promote, or increase the pay of our
    graduates. Increasingly, employers demand that their new
    employees possess appropriate technical and analytical skills
    and also appropriate interpersonal skills, such as
    communication, and teamwork skills. These skills can evolve
    rapidly in a changing economic and technological environment.
    Accordingly, it is important that our educational programs
    evolve in response to those economic and technological changes.
    The expansion of existing academic programs and the development
    of new programs may not be accepted by current or prospective
    students or by the employers of our graduates. Even if we are
    able to develop acceptable new programs, we may not be able to
    begin offering those new programs in a timely fashion or as
    quickly as our competitors offer similar programs. If we are
    unable to adequately respond to changes in market requirements
    due to regulatory or financial constraints, unusually rapid
    technological changes, or other factors, the rates at which our
    graduates obtain jobs in their fields of study could suffer, our
    ability to attract and retain students could be impaired, and
    our business, prospects, financial condition, and results of
    operations could be adversely affected.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    do not maintain existing, and develop additional, relationships
    with employers, our future growth may be impaired.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We currently have relationships with large school districts and
    healthcare systems, primarily in Arizona, and also recently
    began seeking relationships with national and international
    employers, to provide their employees with the opportunity to
    obtain degrees through us while continuing their employment.
    These relationships are an important part of our strategy as
    they provide us with a steady source of potential working adult
    students for particular programs and also serve to increase our
    reputation among high-profile employers. As a result of economic
    conditions, a number of employers we work with have reduced the
    extent to which they reimburse their employees for participating
    in our programs. If we are unable to develop new relationships,
    or if our existing relationships deteriorate or end as a result
    of current or future economic conditions affecting employers or
    otherwise, our efforts to seek these sources of potential
    working adult students will be impaired, and this could
    materially and adversely affect our business, prospects,
    financial condition, and results of operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    failure to effectively manage our growth could harm our
    business.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our business recently has experienced rapid growth. Growth and
    expansion of our operations may place a significant strain on
    our resources and increase demands on our executive management
    team, management information and reporting systems, financial
    management controls and personnel, and regulatory compliance
    systems and personnel. We may not be able to maintain or
    accelerate our current growth rate, effectively manage our
    expanding operations, or achieve planned growth on a timely or
    profitable basis. If we are unable to manage our growth
    effectively, we may experience operating inefficiencies and our
    earnings may be materially adversely affected.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    be unable to finance our expansion activities, and interest and
    other expenses may increase.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to expand the size and enhance the profile and
    reputation of our ground campus by, among other things, adding
    faculty and expanding upon and modernizing our campus
    infrastructure and technological capabilities over the next
    several years. These activities may require significant capital
    expenditures and may cause us to incur significant expenses, and
    there can be no guarantee that we will be able, or that it will
    be advantageous, to fund such expenditures or expenses with cash
    flow from operations. If we do not fund such activities with
    cash flow from operations, we will be required to finance such
    activities. Financing may take the form of, among other things,
    loans under a credit facility, sale-leaseback transactions, the
    issuance of
</DIV>

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    <BR>
    27
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    equity securities, or a combination of the foregoing. There can
    be no guarantee that any such financing will be available on
    terms acceptable to us, or at all. Furthermore, our loan
    agreement contains covenants that restrict our ability to incur
    debt, and there can be no guarantee that we will be able to
    secure the consent of our lender for any financing.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we obtain financing, we may incur increased interest or lease
    expenses, or other financing charges, that could have an adverse
    effect on our cash flow. In addition, any financing accomplished
    through the issuance of any additional equity securities could
    be dilutive to holders of our common stock. If we are unable to
    fund our expansion activities, our ability to implement our
    business plan will be adversely affected.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    fail to maintain proper and effective disclosure controls and
    procedures and internal controls over financial reporting, our
    ability to produce accurate financial statements could be
    impaired, which could adversely affect our stock price, our
    ability to operate our business and investors&#146; views of
    us.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Ensuring that we have adequate disclosure controls and
    procedures, including internal controls over financial
    reporting, in place so that we can produce accurate financial
    statements on a timely basis is a costly and time- consuming
    effort that needs to be re-evaluated frequently. We are
    continuing the process of documenting, reviewing and, if
    appropriate, improving our internal controls and procedures as
    we will eventually be subject to the requirements of
    Section&#160;404 of the Sarbanes-Oxley Act of 2002, or the
    Sarbanes-Oxley Act, which will require annual management
    assessments of the effectiveness of our internal controls over
    financial reporting and a report by our independent auditors
    addressing these assessments. We will be required to comply with
    the internal controls evaluation and certification requirements
    of Section&#160;404 of the Sarbanes-Oxley Act by no later than
    the end of our 2009 fiscal year.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    success depends upon our ability to recruit and retain key
    personnel.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our success to date has largely depended on, and will continue
    to depend on, the skills, efforts, and motivation of our
    executive officers, who generally have significant experience
    with our company and within the education industry. Our success
    also largely depends on our ability to attract and retain highly
    qualified faculty, school administrators, and additional
    corporate management personnel. We may have difficulties in
    locating and hiring qualified personnel and in retaining such
    personnel once hired. In addition, because we operate in a
    highly competitive industry, our hiring of qualified executives
    or other personnel may cause us or such persons to be subject to
    lawsuits alleging misappropriation of trade secrets, improper
    solicitation of employees, or other claims. Other than
    non-compete agreements of limited duration that we have with
    certain executive officers, we have not historically sought
    non-compete agreements with key personnel and they may leave and
    subsequently compete against us. The loss of the services of any
    of our key personnel, many of whom are not party to employment
    agreements with us, or our failure to attract and retain other
    qualified and experienced personnel on acceptable terms, could
    cause our business to suffer.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    protection of our operations through exclusive proprietary
    rights and intellectual property is limited, and from time to
    time we encounter disputes relating to our use of intellectual
    property of third parties, any of which could harm our
    operations and prospects.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the ordinary course of our business we develop intellectual
    property of many kinds that is or will be the subject of
    copyright, trademark, service mark, patent, trade secret, or
    other protections. This intellectual property includes but is
    not limited to courseware materials and business know-how and
    internal processes and procedures developed to respond to the
    requirements of operating our business and to comply with the
    rules and regulations of various education regulatory agencies.
    We rely on a combination of copyrights, trademarks, service
    marks, trade secrets, domain names, and agreements to protect
    our intellectual property. We rely on service mark and trademark
    protection in the United States to protect our rights to the
    mark &#147;Grand Canyon University,&#148; as well as distinctive
    logos and other marks associated with our services. We rely on
    agreements under which we obtain rights to use course content
    developed by faculty members and other third party content
    experts, as well as license agreements pursuant to which we
    license the right to brand certain of our program offerings. We
    cannot assure you that the measures that we take will be
    adequate or that we have secured, or will be able to secure,
    appropriate protections for all of our proprietary rights in the
    United States
</DIV>

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    <BR>
    28
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    or select foreign jurisdictions, or that third parties will not
    infringe upon or violate our proprietary rights. Unauthorized
    third parties may attempt to duplicate or copy the proprietary
    aspects of our curricula, online resource material, and other
    content, and offer competing programs to ours.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In particular, we license the right to utilize the name of Ken
    Blanchard in connection with our business school and Executive
    MBA programs and have spent significant resources in related
    branding efforts. Nevertheless, our license agreement with
    Blanchard Education, LLC has a fixed term and may not
    necessarily be extended in the future. In addition, third
    parties may attempt to develop competing programs or copy
    aspects of our curriculum, online resource material, quality
    management, and other proprietary content. The termination of
    this license agreement, or attempts to compete with or duplicate
    our programs, if successful, could adversely affect our
    business. Protecting these types of intellectual property rights
    can be difficult, particularly as it relates to the development
    by our competitors of competing courses and programs.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may from time to time encounter disputes over rights and
    obligations concerning intellectual property, and we may not
    prevail in these disputes. In certain instances, we may not have
    obtained sufficient rights in the content of a course. Third
    parties may raise a claim against us alleging an infringement or
    violation of the intellectual property of that third party. Some
    third-party intellectual property rights may be extremely broad,
    and it may not be possible for us to conduct our operations in
    such a way as to avoid those intellectual property rights. Any
    such intellectual property claim could subject us to costly
    litigation and impose a significant strain on our financial
    resources and management personnel regardless of whether such
    claim has merit, and we may be required to alter the content of
    our classes or pay monetary damages, which may be significant.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We are
    subject to laws and regulations as a result of our collection
    and use of personal information, and any violations of such laws
    or regulations, or any breach, theft, or loss of such
    information, could adversely affect our reputation and
    operations.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Possession and use of personal information in our operations
    subjects us to risks and costs that could harm our business. We
    collect, use, and retain large amounts of personal information
    regarding our applicants, students, faculty, staff, and their
    families, including social security numbers, tax return
    information, personal and family financial data, and credit card
    numbers. We also collect and maintain personal information of
    our employees in the ordinary course of our business. Our
    services can be accessed globally through the Internet.
    Therefore, we may be subject to the application of national
    privacy laws in countries outside the U.S.&#160;from which
    applicants and students access our services. Such privacy laws
    could impose conditions that limit the way we market and provide
    our services.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our computer networks and the networks of certain of our vendors
    that hold and manage confidential information on our behalf may
    be vulnerable to unauthorized access, employee theft or misuse,
    computer hackers, computer viruses, and other security threats.
    Confidential information may also inadvertently become available
    to third parties when we integrate systems or migrate data to
    our servers following an acquisition of a school or in
    connection with periodic hardware or software upgrades.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Due to the sensitive nature of the personal information stored
    on our servers, our networks may be targeted by hackers seeking
    to access this data. A user who circumvents security measures
    could misappropriate sensitive information or cause
    interruptions or malfunctions in our operations. Although we use
    security and business controls to limit access and use of
    personal information, a third party may be able to circumvent
    those security and business controls, which could result in a
    breach of student or employee privacy. In addition, errors in
    the storage, use, or transmission of personal information could
    result in a breach of privacy for current or prospective
    students or employees. Possession and use of personal
    information in our operations also subjects us to legislative
    and regulatory burdens that could require us to implement
    certain policies and procedures, such as the procedures we
    adopted to comply with the Red Flags Rule that was promulgated
    by the Federal Trade Commission, or FTC, under the federal Fair
    Credit Reporting Act and that requires the establishment of
    guidelines and policies regarding identity theft related to
    student credit accounts, and could require us to make certain
    notifications of data breaches and restrict our use of personal
    information. A violation of any laws or regulations relating to
    the collection or use of personal information
</DIV>

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    <BR>
    29
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    could result in the imposition of fines against us. As a result,
    we may be required to expend significant resources to protect
    against the threat of these security breaches or to alleviate
    problems caused by these breaches. A major breach, theft, or
    loss of personal information regarding our students and their
    families or our employees that is held by us or our vendors, or
    a violation of laws or regulations relating to the same, could
    have a material adverse effect on our reputation and result in
    further regulation and oversight by federal and state
    authorities and increased costs of compliance.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We are
    incurring increased costs as a result of being a public company,
    and the requirements of being a public company may divert
    management attention from our business.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have operated as a public company since November&#160;19,
    2008. As a public company, we incur significant legal,
    accounting and other expenses that we did not incur as a private
    company. In addition, we are subject to a number of additional
    requirements, including the reporting requirements of the
    Securities Exchange Act of 1934, as amended, or the Exchange
    Act, the Sarbanes-Oxley Act, and the listing standards of
    Nasdaq. These requirements have caused us to incur increased
    costs and might place a strain on our systems and resources. The
    Exchange Act requires, among other things, that we file annual,
    quarterly, and current reports with respect to our business and
    financial condition. The Sarbanes-Oxley Act requires, among
    other things, that we maintain effective disclosure controls and
    procedures and internal control over financial reporting, and
    also requires that our internal controls be assessed by
    management and attested to by our auditors as of December 31 of
    each fiscal year commencing with our fiscal year ending
    December&#160;31, 2009. In order to maintain and improve the
    effectiveness of our disclosure controls and procedures and
    internal control over financial reporting, significant resources
    and management oversight is required. As a result, our
    management&#146;s attention might be diverted from other
    business concerns, which could have a material adverse effect on
    our business, prospects, financial condition, and results of
    operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">At
    present we derive a significant portion of our revenues and
    operating income from our graduate programs.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2008, 52.9% of our students were
    graduate students, which includes master&#146;s and doctoral
    students. This percentage has declined in recent periods, and we
    anticipate that this percentage will continue to decline over
    time, due to our recent growth emphasis in our undergraduate
    business and liberal arts programs. If we were to experience any
    event that adversely affected our graduate offerings or the
    attractiveness of our programs to prospective graduate students,
    our business, prospects, financial condition, and results of
    operations could be significantly and adversely affected.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    incur liability for the unauthorized duplication or distribution
    of class materials posted online for class
    discussions.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In some instances, our faculty members or our students may post
    various articles or other third-party content on class
    discussion boards. Third parties may raise claims against us for
    the unauthorized duplication of material posted online for class
    discussions. Any such claims could subject us to costly
    litigation and impose a significant strain on our financial
    resources and management personnel regardless of whether the
    claims have merit. Our general liability insurance may not cover
    potential claims of this type adequately or at all, and we may
    be required to alter the content of our courses or pay monetary
    damages, which may be significant.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    provider of third-party software for our online classroom has
    been acquired by a competitor, and we may have difficulty
    maintaining the software required for our online classroom or
    updating it for future technological changes, which could
    adversely affect our performance.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our online classroom employs the ANGEL Learning Management Suite
    pursuant to a license from ANGEL Learning, Inc. The ANGEL system
    is a web-based portal that stores, manages, and delivers course
    content; enables assignment uploading; provides interactive
    communication between students and faculty; and supplies online
    evaluation tools. In May 2009, ANGEL Learning, Inc. was acquired
    by Blackboard, Inc., a competitor in the provision of online
    educational software and tools. We now rely on Blackboard, Inc.
    for
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    30
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    administrative support of the ANGEL system and, if Blackboard,
    Inc. ceased to operate or was unable or unwilling to continue to
    provide us with services or upgrades on a timely basis, we may
    have difficulty maintaining the software required for our online
    classroom or updating it for future technological changes. We
    cannot predict what effect, if any, Blackboard, Inc.&#146;s
    acquisition of ANGEL Learning, Inc. will have on our use of, or
    the support for or the efficacy of, the ANGEL Learning
    Management Suite. Any failure to maintain our online classroom
    would have an adverse impact on our operations, damage our
    reputation, and limit our ability to attract and retain students.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Seasonal
    and other fluctuations in our results of operations could
    adversely affect the trading price of our common
    stock.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our net revenue and operating results normally fluctuate as a
    result of seasonal variations in our business, principally due
    to changes in enrollment, and are typically lowest in our second
    fiscal quarter and highest in our fourth fiscal quarter.
    Accordingly, our results in any quarter may not indicate the
    results we may achieve in any subsequent quarter or for the full
    year. Student population varies as a result of new enrollments,
    graduations, and student attrition. A significant portion of our
    general and administrative expenses do not vary proportionately
    with fluctuations in revenues. We expect quarterly fluctuations
    in operating results to continue as a result of seasonal
    enrollment patterns. Such patterns may change, however, as a
    result of new program introductions, the timing of colloquia and
    events, and increased enrollments of students. These
    fluctuations may result in volatility or have an adverse effect
    on the market price of our common stock.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    loan agreement may restrict our operations and our ability to
    complete certain transactions.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our loan agreement, which we entered into in connection with the
    purchase of our campus in April 2009, imposes certain operating
    and financial restrictions on us. Without the consent of our
    lender, these restrictions generally limit our ability to, among
    other things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    incur additional indebtedness or liens;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    sell, assign, lease, transfer or otherwise dispose of any part
    of our assets other than in the ordinary course of business;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make investments or capital contributions to any individual or
    entity;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    enter into any consolidation, merger, or other combination, or
    become a partner in a partnership, a member of a joint venture,
    or a member of a limited liability company;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    acquire or purchase a business or all or substantially all of
    the assets of a business in an aggregate amount exceeding an
    amount equal to 25% of our tangible net worth;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    engage in any business activities substantially different from
    our present business.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the loan agreement requires us to maintain a
    maximum funded debt to adjusted EBITDA ratio, a minimum basic
    fixed charge coverage ratio and a minimum tangible net worth
    ratio, in each case as such terms are defined in the loan
    agreement. We cannot assure you that these covenants will not
    adversely affect our ability to finance our future operations or
    capital needs or to pursue available business opportunities. A
    breach of any of these covenants or our inability to maintain
    the required financial ratios could result in a default in
    respect of the related indebtedness. If a default occurs, the
    affected lenders could elect to declare the indebtedness,
    together with accrued interest and other fees, to be immediately
    due and payable.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    current success and future growth depend on the continued
    acceptance of the Internet and the corresponding growth in users
    seeking educational services on the Internet.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our business relies in part on the Internet for its success. A
    number of factors could inhibit the continued acceptance of the
    Internet and adversely affect our profitability, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    inadequate Internet infrastructure;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    security and privacy concerns;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    31
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the unavailability of cost-effective Internet service and other
    technological factors;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes in government regulation of Internet use.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If Internet use decreases, or if the number of Internet users
    seeking educational services on the Internet does not increase,
    our business may not grow as planned.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Government
    regulations relating to the Internet could increase our cost of
    doing business, affect our ability to grow or otherwise have a
    material adverse effect on our business.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The increasing popularity and use of the Internet and other
    online services has led and may lead to the adoption of new laws
    and regulatory practices in the United States or foreign
    countries and to new interpretations of existing laws and
    regulations. These new laws and interpretations may relate to
    issues such as online privacy, copyrights, trademarks and
    service marks, sales taxes, fair business practices, and the
    requirement that online education institutions qualify to do
    business as foreign corporations or be licensed in one or more
    jurisdictions where they have no physical location or other
    presence. New laws and regulations or interpretations thereof
    related to doing business over the Internet could increase our
    costs and materially and adversely affect our business,
    prospects, financial condition, and results of operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    incur significant costs complying with the Americans with
    Disabilities Act and similar laws.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the Americans with Disabilities Act of 1990, or the ADA,
    all public accommodations must meet federal requirements related
    to access and use by disabled persons. Additional federal,
    state, and local laws also may require modifications to our
    properties, or restrict our ability to renovate our properties.
    For example, the Fair Housing Amendments Act of 1988, or FHAA,
    requires apartment properties first occupied after
    March&#160;13, 1990 to be accessible to the handicapped. We have
    not conducted an audit or investigation of all of our properties
    to determine our compliance with present requirements.
    Noncompliance with the ADA or FHAA could result in the
    imposition of fines or an award or damages to private litigants
    and also could result in an order to correct any non-complying
    feature. We cannot predict the ultimate amount of the cost of
    compliance with the ADA, FHAA, or other legislation. If we incur
    substantial costs to comply with the ADA, FHAA, or any other
    legislation, we could be materially and adversely affected.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    failure to comply with environmental laws and regulations
    governing our activities could result in financial penalties and
    other costs.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We use hazardous materials at our ground campus and generate
    small quantities of waste, such as used oil, antifreeze, paint,
    car batteries, and laboratory materials. As a result, we are
    subject to a variety of environmental laws and regulations
    governing, among other things, the use, storage, and disposal of
    solid and hazardous substances and waste, and the
    <FONT style="white-space: nowrap">clean-up</FONT> of
    contamination at our facilities or off-site locations to which
    we send or have sent waste for disposal. In the event we do not
    maintain compliance with any of these laws and regulations, or
    are responsible for a spill or release of hazardous materials,
    we could incur significant costs for
    <FONT style="white-space: nowrap">clean-up,</FONT>
    damages, and fines, or penalties which could adversely impact
    our business, prospects, financial condition, and results of
    operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    expand in the future into new markets outside the United States,
    we would be subject to risks inherent in non-domestic
    operations.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we acquire schools or establish programs in new markets
    outside the United States, we will face risks that are inherent
    in non-domestic operations, including the complexity of
    operations across borders, new regulatory regimes, currency
    exchange rate fluctuations, monetary policy risks, such as
    inflation, hyperinflation and deflation, and potential political
    and economic instability in the countries into which we expand.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    failure to obtain additional capital in the future could
    adversely affect our ability to grow.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that funds from operations, cash on hand, and
    investments will be adequate to fund our current operating and
    growth plans for the foreseeable future. However, we may need
    additional financing in
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    32
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    order to finance our continued growth, particularly if we pursue
    any acquisitions. The amount, timing, and terms of such
    additional financing will vary principally depending on the
    timing and size of new program offerings, the timing and size of
    acquisitions we may seek to consummate, and the amount of cash
    flows from our operations. To the extent that we require
    additional financing in the future, such financing may not be
    available on terms acceptable to us or at all, and,
    consequently, we may not be able to fully implement our growth
    strategy.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    are not able to integrate acquired schools, our business could
    be harmed.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    From time to time, we may pursue acquisitions of other schools.
    Integrating acquired operations into our institution involves
    significant risks and uncertainties, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    inability to maintain uniform standards, controls, policies, and
    procedures;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    distraction of management&#146;s attention from normal business
    operations during the integration process;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    inability to obtain, or delay in obtaining, approval of the
    acquisition from the necessary regulatory agencies, or the
    imposition of operating restrictions or a letter of credit
    requirement on us or on the acquired school by any of those
    regulatory agencies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    expenses associated with the integration efforts;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    unidentified issues not discovered in our due diligence process,
    including legal contingencies.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we complete one or more acquisitions and are unable to
    integrate acquired operations successfully, our business could
    suffer.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to the Offering</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    executive officers, directors, and principal existing
    stockholders own a large percentage of our voting stock, which
    may allow them to collectively control substantially all matters
    requiring stockholder approval and, in the case of certain of
    our principal stockholders, will have other unique rights that
    may afford them access to our management.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with our initial public offering, certain of our
    stockholders entered into a proxy and voting agreement, pursuant
    to which such persons granted to the Richardson Voting Group a
    five-year irrevocable proxy to exercise voting authority with
    respect to certain shares of our common stock held by such
    persons, for so long as such shares are held by such persons.
    Upon the completion of our initial public offering, as a result
    of the proxy and voting agreement, the Richardson Voting Group
    had the power to exercise voting authority with respect to 42.9%
    of our common stock. Under the terms of the proxy and voting
    agreement, if any person party to the voting agreement transfers
    shares covered by the proxy in registered or open-market
    transactions, the proxy is no longer effective as to such
    shares. Accordingly, the number of shares as to which the
    Richardson Voting Group has voting power will decrease over time
    as shares held by other parties to the proxy and voting
    agreement are sold. See &#147;Beneficial Ownership of Common
    Stock.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of the proxy and voting agreement, the Richardson
    Voting Group could significantly influence the outcome of any
    actions requiring the vote or consent of stockholders, including
    elections of directors, amendments to our certificate of
    incorporation and bylaws, mergers, going private transactions,
    and other extraordinary transactions, and any decisions
    concerning the terms of any of these transactions. The ownership
    and voting positions of these stockholders may have the effect
    of delaying, deterring, or preventing a change in control or a
    change in the composition of our Board of Directors. These
    stockholders may also use their contractual rights, including
    access to management, and their large ownership position to
    address their own interests, which may be different from those
    of our other stockholders.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    33
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Your
    percentage ownership in us may be diluted by future issuances of
    capital stock, which could reduce your influence over matters on
    which stockholders vote.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our Board of Directors has the authority, without action or vote
    of our stockholders, to issue all or any part of our authorized
    but unissued shares of common stock, including shares issuable
    upon the exercise of options, shares that may be issued to
    satisfy our payment obligations under our incentive plans, or
    shares of our authorized but unissued preferred stock. Issuances
    of common stock or voting preferred stock would reduce your
    influence over matters on which our stockholders vote, and, in
    the case of issuances of preferred stock, likely would result in
    your interest in us being subject to the prior rights of holders
    of that preferred stock.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Provisions
    in our charter documents and the Delaware General Corporation
    Law could make it more difficult for a third party to acquire us
    and could discourage a takeover and adversely affect existing
    stockholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Anti-takeover provisions of our certificate of incorporation,
    bylaws, the Delaware General Corporation Law, or DGCL, and
    regulations of state and federal education agencies could
    diminish the opportunity for stockholders to participate in
    acquisition proposals at a price above the then-current market
    price of our common stock. For example, while we have no present
    plans to issue any preferred stock, our Board of Directors,
    without further stockholder approval, may issue shares of
    undesignated preferred stock and fix the powers, preferences,
    rights, and limitations of such class or series, which could
    adversely affect the voting power of your shares. In addition,
    our bylaws provide for an advance notice procedure for
    nomination of candidates to our Board of Directors that could
    have the effect of delaying, deterring, or preventing a change
    in control. Further, as a Delaware corporation, we are subject
    to provisions of the DGCL regarding &#147;business
    combinations,&#148; which can deter attempted takeovers in
    certain situations. The approval requirements of the Department
    of Education, our regional accrediting commission, and state
    education agencies for a change in control transaction could
    also delay, deter, or prevent a transaction that would result in
    a change in control. We may, in the future, consider adopting
    additional anti-takeover measures. The authority of our board to
    issue undesignated preferred or other capital stock and the
    anti-takeover provisions of the DGCL, as well as other current
    and any future anti-takeover measures adopted by us, may, in
    certain circumstances, delay, deter, or prevent takeover
    attempts and other changes in control of the company not
    approved by our Board of Directors.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    price of our common stock may be volatile, and as a result
    returns on an investment in our common stock may be
    volatile.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We completed our initial public offering in November 2008. Given
    the relatively limited public float since that time, trading in
    our common stock has also been limited and, at times, volatile.
    An active trading market for our common stock may not be
    sustained, and the trading price of our common stock may
    fluctuate substantially.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The market price of our common stock could fluctuate
    significantly for various reasons, which include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our quarterly or annual earnings or earnings of other companies
    in our industry;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the public&#146;s reaction to our press releases, our other
    public announcements, and our filings with the SEC;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes in earnings estimates or recommendations by research
    analysts who track our common stock or the stocks of other
    companies in our industry;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes in our number of enrolled students;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    new or proposed laws or regulations or new or proposed
    interpretations of laws or regulations applicable to our
    business;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    seasonal variations in our student population;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    34
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    damage to our reputation or other adverse effects as a result of
    negative publicity in the media, in industry or governmental
    reports, or otherwise, affecting us or other companies in the
    for-profit postsecondary education sector;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the availability and cost of Title&#160;IV funds, other student
    financial aid, and private loans;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the failure to maintain or keep in good standing our regulatory
    approvals and accreditations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes in accounting standards, policies, guidance,
    interpretations, or principles;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes in general conditions in the U.S.&#160;and global
    economies or financial markets, including those resulting from
    war, incidents of terrorism, or responses to such events;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an adverse economic or other development that affects job
    prospects in our core disciplines;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    litigation involving our company, or investigations or audits by
    regulators into the operations of our company or our
    competitors, including the investigation of Grand Canyon
    University currently being conducted by the Office of Inspector
    General of the Department of Education, and the pending <I>qui
    tam </I>action regarding the manner in which we have compensated
    our enrollment personnel;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    sales of common stock by our directors, executive officers, and
    significant stockholders.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, in recent years, the stock market has experienced
    extreme price and volume fluctuations. This volatility has had a
    significant impact on the market price of securities issued by
    many companies, including companies in our industry. The changes
    frequently appear to occur without regard to the operating
    performance of these companies. The price of our common stock
    could fluctuate based upon factors that have little or nothing
    to do with our company, and these fluctuations could materially
    reduce our stock price.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the past, following periods of volatility in the market price
    of a company&#146;s securities, securities class action
    litigation has often been brought against that company. Because
    of the potential volatility of our stock price, we may become
    the target of securities litigation in the future. Securities
    litigation could result in substantial costs and divert
    management&#146;s attention and resources from our business.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If
    securities analysts do not publish research or reports about our
    business or if they downgrade their evaluations of our stock,
    the price of our stock could decline.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The trading market for our common stock depends in part on the
    research and reports that industry or financial analysts publish
    about us or our business. If one or more of the analysts
    covering us downgrade their estimates or evaluations of our
    stock, the price of our stock could decline. If one or more of
    these analysts cease coverage of our company, we could lose
    visibility in the market for our stock, which in turn could
    cause our stock price to decline.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    currently do not intend to pay dividends on our common stock
    and, consequently, your only opportunity to achieve a return on
    your investment is if the price of our common stock
    appreciates.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We do not expect to pay dividends on shares of our common stock
    in the foreseeable future and intend to use cash to grow our
    business. The payment of cash dividends in the future, if any,
    will be at the discretion of our Board of Directors and will
    depend upon such factors as earnings levels, capital
    requirements, our overall financial condition, and any other
    factors deemed relevant by our Board of Directors. Consequently,
    your only opportunity to achieve a positive return on your
    investment in us will be if the market price of our common stock
    appreciates.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    35
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    will have broad discretion in applying the net proceeds of this
    offering and may not use those proceeds in ways that will
    enhance the market value of our common stock.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have significant flexibility in applying the net proceeds we
    will receive in this offering. We will use the proceeds that we
    receive from the sale of stock in this offering to pay the
    expenses of this offering and for general corporate purposes. As
    part of your investment decision, you will not be able to assess
    or direct how we apply these net proceeds. If we do not apply
    these funds effectively, we may lose significant business
    opportunities. Furthermore, our stock price could decline if the
    market does not view our use of the net proceeds from this
    offering favorably.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    36
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='103'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">FORWARD-LOOKING
    STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus contains &#147;forward-looking statements&#148;
    within the meaning of Section&#160;27A of the Securities Act of
    1933, as amended, or the Securities Act, and Section&#160;21E of
    the Exchange Act. Forward-looking statements include information
    relating to future events, future financial performance,
    strategies, expectations, competitive environment, regulation,
    and availability of resources, and include, without limitation,
    statements regarding: proposed new programs; expectations that
    regulatory developments or other matters will not have a
    material adverse effect or material impact on our financial
    position, results of operations, or liquidity; statements
    concerning projections, predictions, expectations, estimates, or
    forecasts as to our business, financial and operational results,
    and future economic performance; and statements of
    management&#146;s goals and objectives and other similar
    expressions concerning matters that are not historical facts.
    Words such as &#147;may,&#148; &#147;should,&#148;
    &#147;could,&#148; &#147;would,&#148; &#147;predicts,&#148;
    &#147;potential,&#148; &#147;continue,&#148;
    &#147;expects,&#148; &#147;anticipates,&#148;
    &#147;future,&#148; &#147;intends,&#148; &#147;plans,&#148;
    &#147;believes,&#148; &#147;estimates&#148; and similar
    expressions, as well as statements in future tense, identify
    forward-looking statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Forward-looking statements should not be read as a guarantee of
    future performance or results, and will not necessarily be
    accurate indications of the times at, or by, which such
    performance or results will be achieved. Forward-looking
    statements are based on information available at the time those
    statements are made or management&#146;s good faith belief as of
    that time with respect to future events, and are subject to
    risks and uncertainties that could cause actual performance or
    results to differ materially from those expressed in or
    suggested by the forward-looking statements. Important factors
    that could cause such differences include, but are not limited
    to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our failure to comply with the extensive regulatory framework
    applicable to our industry, including Title&#160;IV of the
    Higher Education Act and the regulations thereunder, state laws
    and regulatory requirements, and accrediting commission
    requirements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the results of the ongoing investigation by the Department of
    Education&#146;s Office of Inspector General and the pending
    <I>qui tam </I>action regarding the manner in which we have
    compensated our enrollment personnel, and possible remedial
    actions or other liability resulting therefrom;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability of our students to obtain federal Title&#160;IV
    funds, state financial aid, and private financing;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    risks associated with changes in applicable federal and state
    laws and regulations and accrediting commission standards;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we experience a change in control under applicable regulatory or
    accrediting standards, and we are unable to obtain appropriate
    approvals for such an event in a timely manner, or at all;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to hire and train new, and develop and train
    existing, enrollment counselors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the pace of growth of our enrollment;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to convert prospective students to enrolled students
    and to retain active students;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our success in updating and expanding the content of existing
    programs and developing new programs in a cost-effective manner
    or on a timely basis;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    industry competition, including competition for qualified
    executives and other personnel;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    risks associated with the competitive environment for marketing
    our programs;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure on our part to keep up with advances in technology that
    could enhance the online experience for our students;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the extent to which obligations under our loan agreement,
    including the need to comply with restrictive and financial
    covenants and to pay principal and interest payments, limits our
    ability to conduct our operations or seek new business
    opportunities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to manage future growth effectively;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    37
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    general adverse economic conditions or other developments that
    affect job prospects in our core disciplines;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    other factors discussed under the headings &#147;Risk
    Factors&#148; and &#147;Regulation&#148; in this prospectus, and
    in the sections entitled &#147;Business,&#148; which is
    incorporated by reference into this prospectus from our Annual
    Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the fiscal year ended December&#160;31, 2008, and
    &#147;Management&#146;s Discussion and Analysis of Financial
    Condition and Results of Operations,&#148; which is incorporated
    by reference into this prospectus from our Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the fiscal year ended December&#160;31, 2008, and our
    Quarterly Reports on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    for our quarters ended March&#160;31, 2009 and June&#160;30,
    2009, as applicable.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Forward-looking statements speak only as of the date the
    statements are made. You should not put undue reliance on any
    forward-looking statements. We assume no obligation to update
    forward-looking statements to reflect actual results, changes in
    assumptions, or changes in other factors affecting
    forward-looking information, except to the extent required by
    applicable securities laws. If we do update one or more
    forward-looking statements, no inference should be drawn that we
    will make additional updates with respect to those or other
    forward-looking statements.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    38
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='104'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We estimate that the proceeds from the sale of
    1,000,000&#160;shares of common stock offered by us in this
    offering will be approximately
    $&#160;&#160;&#160;&#160;&#160;&#160;million, based on an
    assumed offering price of $&#160;&#160;&#160;&#160;&#160; per
    share, the last reported sale price of our common stock on The
    Nasdaq Global Market on August&#160;&#160;&#160;, 2009, and
    after deducting the underwriting discounts and commissions and
    estimated offering expenses payable by us. Each $1.00 increase
    or decrease in the assumed public offering price of
    $&#160;&#160;&#160;&#160;&#160; per share would increase or
    decrease, as applicable, the net proceeds to us by approximately
    $&#160;&#160;&#160;&#160;&#160;&#160;million, assuming the
    number of shares offered by us as set forth on the cover of this
    prospectus remains the same and after deducting estimated
    underwriting discounts and commissions payable by us. We will
    not receive any proceeds from the sale of shares by the selling
    stockholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to use the net proceeds we receive from this offering
    to pay transaction fees and expenses of approximately
    $&#160;&#160;&#160;&#160;&#160;&#160;million, and for working
    capital and general corporate purposes. Our management will have
    broad discretion in the application of such remaining net
    proceeds from this offering.
</DIV>
<A name='105'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PRICE
    RANGE OF COMMON STOCK</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common stock has traded on the Nasdaq Global Market under
    the symbol &#147;LOPE&#148; since it began trading on
    November&#160;20, 2008. Our initial public offering was priced
    at $12.00 per share on November&#160;19, 2008. The following
    table sets forth, for the periods indicated, the high and low
    sales prices for our common stock as reported on the Nasdaq
    Global Market.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="83%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>High</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Low</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>2008</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Fourth Quarter (from November&#160;20, 2008)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19.12
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9.49
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>2009</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    First Quarter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    20.80
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    12.53
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Second Quarter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    17.35
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    12.74
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Third Quarter (through August&#160;24, 2009)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19.12
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    15.69
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On August 25, 2009, the last reported sale price of our common
    stock on the Nasdaq Global Market was $18.58. As of such date,
    we had approximately 34 holders of record of our common stock.
</DIV>
<A name='106'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DIVIDEND
    POLICY</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We do not anticipate declaring or paying any cash dividends on
    our common stock in the foreseeable future. The payment of any
    dividends in the future will be at the discretion of our Board
    of Directors and will depend upon our financial condition,
    results of operations, earnings, capital requirements,
    contractual restrictions, outstanding indebtedness, and other
    factors deemed relevant by our board. As a result, you will need
    to sell your shares of common stock to realize a return on your
    investment, and you may not be able to sell your shares at or
    above the price you paid for them.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    39
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='107'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CAPITALIZATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth our cash and cash equivalents and
    our capitalization as of June&#160;30, 2009:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    on an actual basis;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    on an as adjusted basis to reflect the receipt of the estimated
    net proceeds from the sale by us of 1,000,000&#160;shares of
    common stock in this offering at the assumed public offering
    price of $18.58 per&#160;share (the last reported sale price of
    our common stock on August&#160;25, 2009), after deducting the
    estimated underwriting discounts and commissions and estimated
    offering expenses payable by us.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should read this table together with &#147;Use of
    Proceeds,&#148; &#147;Management&#146;s Discussion and Analysis
    of Financial Condition and Results of Operations,&#148;
    &#147;Description of Capital Stock&#148; and our consolidated
    financial statements and related notes included elsewhere in or
    incorporated by reference into this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="79%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>As of June&#160;30, 2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Actual</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>As Adjusted</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(Unaudited)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom">
    <B>(In thousands, except share data)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash and cash
    equivalents<SUP style="font-size: 85%; vertical-align: top">(1)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24,742
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Capital lease obligations (including short-term)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,013
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other indebtedness (including short-term indebtedness)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27,681
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Stockholders&#146; equity:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Preferred stock, $0.01&#160;par value, 10,000,000&#160;shares
    authorized, no shares issued and outstanding, actual and as
    adjusted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Common stock, $0.01&#160;par value, 100,000,000&#160;shares
    authorized, 44,576,417&#160;shares issued and outstanding,
    actual; 100,000,000&#160;shares authorized,
    45,576,417&#160;shares issued and outstanding, as adjusted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    446
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Additional paid-in
    capital<SUP style="font-size: 85%; vertical-align: top">(1)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    52,469
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Accumulated and other comprehensive income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Accumulated earnings
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,029
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total stockholders&#146;
    equity<SUP style="font-size: 85%; vertical-align: top">(1)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    53,965
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total capitalization
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    83,659
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Each $1.00 increase or decrease in the assumed public offering
    price of $&#160;&#160;&#160;&#160;&#160; per share (the last
    reported sale price of our common stock
    on&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2009)&#160;would increase or decrease, respectively, the amount
    of cash and cash equivalents, additional paid-in capital and
    total stockholders&#146; equity, in each case by approximately
    $&#160;&#160;&#160;&#160;&#160;&#160;million, assuming the
    number of shares offered by us, as set forth on the cover of
    this prospectus, remains the same and after deducting the
    estimated underwriting discounts and commissions payable to us.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    40
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='108'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">REGULATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are subject to extensive regulation by state education
    agencies, accrediting commissions, and the federal government
    through the Department of Education under the Higher Education
    Act. The regulations, standards, and policies of these agencies
    cover the vast majority of our operations, including our
    educational programs, facilities, instructional and
    administrative staff, administrative procedures, marketing,
    recruiting, financial operations, and financial condition.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As an institution of higher education that grants degrees and
    certificates, we are required to be authorized by appropriate
    state education authorities. In addition, in order to
    participate in the federal student financial aid programs, we
    must be accredited by an accrediting commission recognized by
    the Department of Education. Accreditation is a non-governmental
    process through which an institution submits to qualitative
    review by an organization of peer institutions, based on the
    standards of the accrediting commission and the stated aims and
    purposes of the institution. The Higher Education Act requires
    accrediting commissions recognized by the Department of
    Education to review and monitor many aspects of an
    institution&#146;s operations and to take appropriate action if
    the institution fails to meet the accrediting commission&#146;s
    standards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our operations are also subject to regulation by the Department
    of Education due to our participation in federal student
    financial aid programs under Title&#160;IV of the Higher
    Education Act. Those Title&#160;IV programs include educational
    loans with below-market interest rates that are guaranteed by
    the federal government in the event of a student&#146;s default
    on repaying the loan, and also grant programs for students with
    demonstrated financial need. To participate in the Title&#160;IV
    programs, a school must receive and maintain authorization by
    the appropriate state education agency or agencies, be
    accredited by an accrediting commission recognized by the
    Department of Education, and be certified as an eligible
    institution by the Department of Education.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our business activities are planned and implemented to comply
    with the standards of these regulatory agencies. We employ a
    director of compliance who is knowledgeable about regulatory
    matters relevant to student financial aid programs and our Chief
    Financial Officer, Chief Risk Officer, and General Counsel also
    provide oversight designed to ensure that we meet the
    requirements of our regulated operating environment.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">State
    Education Licensure and Regulation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are authorized to offer our educational programs by the
    Arizona State Board for Private Postsecondary Education, the
    regulatory agency governing private postsecondary educational
    institutions in the State of Arizona, where we are located. We
    do not presently have campuses in any states other than Arizona.
    We are required by the Higher Education Act to maintain
    authorization from the Arizona State Board for Private
    Postsecondary Education in order to participate in the
    Title&#160;IV programs. This authorization is very important to
    us and our business. To maintain our state authorization, we
    must continuously meet standards relating to, among other
    things, educational programs, facilities, instructional and
    administrative staff, marketing and recruitment, financial
    operations, addition of new locations and educational programs,
    and various operational and administrative procedures. Failure
    to comply with the requirements of the Arizona State Board for
    Private Postsecondary Education could result in us losing our
    authorization to offer our educational programs, which would
    cause us to lose our eligibility to participate in the
    Title&#160;IV programs and which, in turn, could force us to
    cease operations. Alternatively, the Arizona State Board for
    Private Postsecondary Education could restrict our ability to
    offer certain degree programs.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Most other states impose regulatory requirements on
    <FONT style="white-space: nowrap">out-of-state</FONT>
    educational institutions operating within their boundaries, such
    as those having a physical facility or conducting certain
    academic activities within the state. State laws establish
    standards in areas such as instruction, qualifications of
    faculty, administrative procedures, marketing, recruiting,
    financial operations, and other operational matters, some of
    which are different than the standards prescribed by the
    Department of Education or the Arizona State Board for Private
    Postsecondary Education. Laws in some states limit schools&#146;
    ability to offer educational programs and award degrees to
    residents of those states. Some states also prescribe financial
    regulations that are different from those of the Department of
    Education, and many require the posting of surety bonds.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, several states have sought to assert jurisdiction
    over educational institutions offering online degree programs
    that have no physical location or other presence in the state
    but that have some activity in the state, such as enrolling or
    offering educational services to students who reside in the
    state, employing faculty who reside in the state, or advertising
    to or recruiting prospective students in the state. State
    regulatory requirements for online education vary among the
    states, are not well developed in many states, are imprecise or
    unclear in some states, and can change frequently. New laws,
    regulations, or interpretations related to doing business over
    the Internet could increase our cost of doing business and
    affect our ability to recruit students in particular states,
    which could, in turn, negatively affect enrollments and revenues
    and have a material adverse effect on our business.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have determined that our activities in certain states
    constitute a presence requiring licensure or authorization under
    the requirements of the state education agency in those states.
    In other states, we have obtained approvals as we have
    determined necessary in connection with our marketing and
    recruiting activities or where we have determined that our
    licensure or authorization can facilitate the teaching
    certification process in a particular state for graduates of our
    College of Education. We review the licensure requirements of
    other states when appropriate to determine whether our
    activities in those states constitute a presence or otherwise
    require licensure or authorization by the respective state
    education agencies. Because state regulatory requirements,
    including agency interpretations, can change frequently, and
    because we enroll students in all 50&#160;states and the
    District of Columbia, we expect that state regulatory
    authorities in states where we are not currently licensed or
    authorized will request that we seek licensure or authorization
    in their states in the future. Although we believe that we will
    be able to comply with additional state licensing or
    authorization requirements that may arise or be asserted in the
    future, if we fail to comply with state licensing or
    authorization requirements for a state, or fail to obtain
    licenses or authorizations when required, we could lose our
    state licensure or authorization by that state or be subject to
    other sanctions, including restrictions on our activities in
    that state, fines, and penalties. While we do not believe that
    any of the states in which we are currently licensed or
    authorized, other than Arizona, are individually material to our
    operations, the loss of licensure or authorization in any state
    could prohibit us from recruiting prospective students or
    offering services to current students in that state, which could
    significantly reduce our enrollments.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">State
    Professional Licensure</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Many states have specific requirements that an individual must
    satisfy in order to be licensed as a professional in specified
    fields, including fields such as education and healthcare. These
    requirements vary by state and by field. A student&#146;s
    success in obtaining licensure following graduation typically
    depends on several factors, including the background and
    qualifications of the individual graduate, as well as the
    following factors, among others:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    whether the institution and the program were approved by the
    state in which the graduate seeks licensure, or by a
    professional association;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    whether the program from which the student graduated meets all
    requirements for professional licensure in that state;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    whether the institution and the program are accredited and, if
    so, by what accrediting commissions;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    whether the institution&#146;s degrees are recognized by other
    states in which a student may seek to work.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Many states also require that graduates pass a state test or
    examination as a prerequisite to becoming certified in certain
    fields, such as teaching and nursing. Many states will certify
    individuals if they have already been certified in another state.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our College of Education is approved by the Arizona State Board
    of Education to offer Institutional Recommendations
    (credentials) for the certification of elementary, secondary,
    and special education teachers and school administrators. Our
    College of Nursing and Health Services is approved by the
    Arizona State Board of Nursing for the Bachelor of Science in
    Nursing and Master of Science&#160;&#151; Nursing degrees. Due
    to
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    varying requirements for professional licensure in each state,
    we inform students of the risks associated with obtaining
    professional licensure and that it is each student&#146;s
    responsibility to determine what state, local, or professional
    licensure and certification requirements are necessary in his or
    her individual state.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Accreditation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have been continuously accredited since 1968 by the Higher
    Learning Commission and its predecessor, each a regional
    accrediting commission recognized by the Department of
    Education. Our accreditation was reaffirmed in 2007, and the
    next scheduled comprehensive evaluation will be conducted in
    <FONT style="white-space: nowrap">2016-2017.</FONT>
    Accreditation is a private, non-governmental process for
    evaluating the quality of educational institutions and their
    programs in areas including student performance, governance,
    integrity, educational quality, faculty, physical resources,
    administrative capability and resources, and financial
    stability. To be recognized by the Department of Education,
    accrediting commissions must adopt specific standards for their
    review of educational institutions, conduct peer-review
    evaluations of institutions, and publicly designate those
    institutions that meet their criteria. An accredited school is
    subject to periodic review by its accrediting commissions to
    determine whether it continues to meet the performance,
    integrity and quality required for accreditation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There are six regional accrediting commissions recognized by the
    Department of Education, each with a specified geographic scope
    of coverage, which together cover the entire United States. Most
    traditional, public and private non-profit, degree-granting
    colleges and universities are accredited by one of these six
    regional accrediting commissions. The Higher Learning
    Commission, which accredits Grand Canyon University, is the same
    regional accrediting commission that accredits such universities
    as the University of Arizona, Arizona State University, and
    other degree-granting public and private colleges and
    universities in the states of Arizona, Arkansas, Colorado,
    Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri,
    Nebraska, New&#160;Mexico, North Dakota, Ohio, Oklahoma, South
    Dakota, West Virginia, Wisconsin, and Wyoming.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Accreditation by the Higher Learning Commission is important to
    us for several reasons, including the fact that it enables our
    students to receive Title&#160;IV financial aid. Other colleges
    and universities depend, in part, on an institution&#146;s
    accreditation in evaluating transfers of credit and applications
    to graduate schools. Employers rely on the accredited status of
    institutions when evaluating candidates&#146; credentials, and
    students and corporate and government sponsors under tuition
    reimbursement programs look to accreditation for assurance that
    an institution maintains quality educational standards. If we
    fail to satisfy the standards of the Higher Learning Commission,
    we could lose our accreditation by that agency, which would
    cause us to lose our eligibility to participate in the
    Title&#160;IV programs.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The reauthorization of the Higher Education Act in 2008, and
    proposed regulations issued by the Department of Education,
    require accreditors to monitor the growth of programs at
    institutions that are experiencing significant enrollment
    growth. The Higher Learning Commission requires all affiliated
    institutions to complete an annual data report. If the
    non-financial data, particularly enrollment information, and any
    other information submitted by the institution indicate
    problems, rapid change, or significant growth, the Higher
    Learning Commission staff may require that the institution
    address any concerns arising from the data report in the next
    self-study and visit process. The Higher Learning Commission
    staff may also recommend that its Institutional Actions Council
    require additional monitoring. In addition, the Department of
    Education has proposed regulations, which could take effect on
    July&#160;1, 2010, that would require the Higher Learning
    Commission to notify the Department of Education if an
    institution it accredits that offers distance learning programs
    experiences an increase in its headcount enrollment of 50% or
    more in any fiscal year, which could include us based on our
    historical enrollment growth rates, and the Department of
    Education may consider that information in connection with its
    own regulatory oversight activities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to institutional accreditation by the Higher
    Learning Commission, there are numerous specialized accrediting
    commissions that accredit specific programs or schools within
    their jurisdiction, many of which are in healthcare and
    professional fields. Accreditation of specific programs by one
    of these specialized accrediting commissions signifies that
    those programs have met the additional standards of those
</DIV>

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    <BR>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    agencies. In addition to being accredited by the Higher Learning
    Commission, we also have the following specialized
    accreditations:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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    <TD width="8%"></TD>
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    <TD width="90%"></TD>
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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The Association of Collegiate Business Schools and Programs
    accredits our Master of Business Administration degree program
    and our Bachelor of Science degree programs in Accounting,
    Business Administration, and Marketing;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The Commission on Collegiate Nursing Education accredits our
    Bachelor of Science in Nursing and Master of Science&#160;&#151;
    Nursing degree programs;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The Commission on Accreditation of Athletic Training Education
    accredits our Athletic Training Program.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we fail to satisfy the standards of any of these specialized
    accrediting commissions, we could lose the specialized
    accreditation for the affected programs, which could result in
    materially reduced student enrollments in those programs.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Regulation
    of Federal Student Financial Aid Programs</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To be eligible to participate in the Title&#160;IV programs, an
    institution must comply with specific requirements contained in
    the Higher Education Act and the regulations issued thereunder
    by the Department of Education. An institution must, among other
    things, be licensed or authorized to offer its educational
    programs by the state in which it is physically located (in our
    case, Arizona) and maintain institutional accreditation by an
    accrediting commission recognized by the Department of
    Education. We submitted our application for recertification to
    participate in the Title&#160;IV programs to the Department of
    Education in March 2008 in anticipation of the expiration of our
    provisional certification on June&#160;30, 2008. The Department
    of Education did not make a decision on our recertification
    application by June&#160;30, 2008, and therefore our
    participation in the Title&#160;IV programs has been
    automatically extended on a
    <FONT style="white-space: nowrap">month-to-month</FONT>
    basis until the Department of Education makes its decision.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The substantial amount of federal funds disbursed to schools
    through the Title&#160;IV programs, the large number of students
    and institutions participating in these programs, and
    allegations of fraud and abuse by certain for-profit educational
    institutions have caused Congress to require the Department of
    Education to exercise considerable regulatory oversight over
    for-profit educational institutions. As a result, our
    institution is subject to extensive oversight and review.
    Because the Department of Education periodically revises its
    regulations (as it will do in 2009 in connection with the August
    2008 reauthorization of the Higher Education Act described
    below) and changes its interpretations of existing laws and
    regulations, we cannot predict with certainty how the
    Title&#160;IV program requirements will be applied in all
    circumstances.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Significant factors relating to the Title&#160;IV programs that
    could adversely affect us include the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Congressional action.</I>&#160;&#160;Congress must
    reauthorize the Higher Education Act on a periodic basis,
    usually every five to six years, and the most recent
    reauthorization occurred in August 2008. The reauthorized Higher
    Education Act reauthorized all of the Title&#160;IV programs in
    which we participate, but made numerous revisions to the
    requirements governing the Title&#160;IV programs, including
    provisions relating to the relationships between institutions
    and lenders that make student loans, student loan default rates,
    and the formula for revenue that institutions are permitted to
    derive from the Title&#160;IV programs. In addition, in 2007
    Congress enacted legislation that reduces interest rates on
    certain Title&#160;IV loans and government subsidies to lenders
    that participate in the Title&#160;IV programs. In May 2008,
    Congress enacted additional legislation to attempt to ensure
    that all eligible students will be able to obtain Title&#160;IV
    loans in the future, and that a sufficient number of lenders
    will continue to provide Title&#160;IV loans. Additional
    legislation is also pending in Congress. In addition, Congress
    is currently considering the Student Aid and Fiscal
    Responsibility Act which, among other things, could eliminate
    the federally guaranteed student loan program and require all
    future student loans to be made through the FDL program. We are
    not in a position to predict with certainty whether any of the
    pending legislation will be enacted. Although we are approved to
    participate in the FDL program, because a significant percentage
    of our revenue is derived from the Title&#160;IV programs, any
    action by Congress that significantly reduces Title&#160;IV
    program funding or our ability or the ability of our students to
    participate in the Title&#160;IV
</DIV>

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    <BR>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    programs could increase our costs of compliance, reduce the
    ability of some students to finance their education at our
    institution, require us to seek to arrange for other sources of
    financial aid for our students and materially decrease our
    student enrollment. In addition, a transition to the FDL program
    could cause disruptions in the administration of Title&#160;IV
    program loans to our students if we or the Department of
    Education encounter difficulties with the systems or processes
    necessary for increased FDL program loans.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, Congress must determine the funding levels for the
    Title&#160;IV programs on an annual basis through the budget and
    appropriations process, and may adjust those levels at other
    times. A reduction in federal funding levels for the
    Title&#160;IV programs could reduce the ability of some of our
    students to finance their education. The loss of or a
    significant reduction in Title&#160;IV program funds available
    to our students could reduce our enrollments and revenue.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Pending regulatory changes.</I>&#160;&#160;In connection with
    the 2008 reauthorization of the Higher Education Act, Congress
    directed the Department of Education to promulgate regulations
    to clarify and carry out the numerous revisions made in such
    reauthorization. In December 2008, the Department of Education
    established five negotiated rulemaking committees to begin to
    work on developing such regulations. Negotiated rulemaking is a
    process whereby the Department of Education consults with
    members of the postsecondary education community to identify
    issues of concern and attempts to agree on proposed regulatory
    revisions to address those issues before the Department of
    Education formally proposes any regulations. If the Department
    of Education and negotiators cannot reach consensus on their
    entire package of draft regulations, the Department of Education
    is authorized to propose regulations without being bound by any
    agreements made in the negotiation process. The five negotiated
    rulemaking committees established by the Department of Education
    were divided as follows, based on the regulatory issues to be
    covered by each committee:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Committee I&#160;&#151; Lender and General Loan Issues
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Committee II&#160;&#151; School-Based Loan Issues
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Committee III&#160;&#151; Accreditation
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Committee IV&#160;&#151; Discretionary Grants
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Committee V&#160;&#151; General and Non-Loan Programmatic Issues
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In July and August 2009, the Department of Education proposed
    and invited public comment on regulations relating to the issues
    covered by Committees&#160;I,&#160;II, and III, each of which
    reached consensus, and issues covered by Committee V, which did
    not reach consensus. The Department of Education has yet to
    propose regulations with regard to the topics covered by
    Committee IV, but the Department of Education is expected to
    issue such proposed regulations in the near future. Following
    review and consideration of any public comments, the Department
    of Education will publish final regulations relating to the
    issues covered by the negotiated rulemaking committees. If such
    final regulations are published by November&#160;1, 2009, which
    is expected, such new regulations will take effect on
    July&#160;1, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In May 2009, the Department of Education announced its intent to
    initiate another round of negotiated rulemaking to address
    regulations to improve the administration of the Title&#160;IV
    programs. The Department of Education has not yet identified the
    participants in this next round of negotiated rulemaking, but
    the process is expected to begin as soon as the fall of 2009,
    and is expected to address a number of significant issues,
    including: compensation paid by institutions to persons or
    entities engaged in student recruiting or admission activities;
    the determination of satisfactory academic progress under
    different academic calendars; state authorization as a component
    of institutional eligibility; the definition of a credit hour
    for purposes of determining program eligibility status,
    particularly in the context of awarding Pell Grants;
    verification of information included on student aid
    applications; and the definition of a high school diploma as a
    condition of a student&#146;s receipt of Title&#160;IV aid. We
    are still assessing the impact of these proposed regulations and
    the upcoming negotiated rulemaking on our financial aid policies
    and other plans and strategies.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    45
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Eligibility and certification procedures.</I>&#160;&#160;Each
    institution must apply periodically to the Department of
    Education for continued certification to participate in the
    Title&#160;IV programs. Such recertification generally is
    required every six years, but may be required earlier, including
    when an institution undergoes a change in control. An
    institution may also come under the Department of
    Education&#146;s review when it expands its activities in
    certain ways, such as opening an additional location, adding a
    new educational program or modifying the academic credentials it
    offers. The Department of Education may place an institution on
    provisional certification status if it finds that the
    institution does not fully satisfy all of the eligibility and
    certification standards and in certain other circumstances, such
    as when an institution is certified for the first time or
    undergoes a change in control. During the period of provisional
    certification, the institution must comply with any additional
    conditions included in the school&#146;s program participation
    agreement with the Department of Education. In addition, the
    Department of Education may more closely review an institution
    that is provisionally certified if it applies for
    recertification or approval to open a new location, add an
    educational program, acquire another school, or make any other
    significant change. If the Department of Education determines
    that a provisionally certified institution is unable to meet its
    responsibilities under its program participation agreement, it
    may seek to revoke the institution&#146;s certification to
    participate in the Title&#160;IV programs without advance notice
    or opportunity for the institution to challenge the action.
    Students attending provisionally certified institutions remain
    eligible to receive Title&#160;IV program funds.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Since May 2005 we have been certified to participate in
    Title&#160;IV programs on a provisional basis. We submitted our
    application for recertification in March 2008 in anticipation of
    the expiration of our provisional certification on June&#160;30,
    2008. The Department of Education did not make a decision on our
    recertification application by June&#160;30, 2008, and therefore
    our provisional certification to participate in the
    Title&#160;IV programs has been automatically extended on a
    <FONT style="white-space: nowrap">month-to-month</FONT>
    basis until the Department of Education makes its decision.
    Since June 2008, we have filed updates with the Department of
    Education and communicated with Department of Education
    personnel in order to update our pending recertification
    application with relevant information, such as our status as a
    publicly-traded corporation and the identity of the members of
    our board of directors. Based on our provisional certification,
    the Department of Education may more closely review any
    application we may file for recertification, new locations, new
    educational programs, acquisitions of other schools, or other
    significant changes. For a school that is certified on a
    provisional basis, the Department of Education may revoke the
    institution&#146;s certification without advance notice or
    advance opportunity for the institution to challenge that
    action. For a school that is provisionally certified on a
    <FONT style="white-space: nowrap">month-to-month</FONT>
    basis, the Department of Education may allow the
    institution&#146;s certification to expire at the end of any
    month without advance notice, and without any formal procedure
    for review of such action. To our knowledge, such action is very
    rare and has only occurred upon a determination that an
    institution is in substantial violation of material
    Title&#160;IV requirements. For the foreseeable future, we do
    not have plans to initiate new educational programs, acquire
    other schools, or make other significant changes in our
    operations that would require approval of the Department of
    Education. Accordingly, we do not believe that our continued
    provisional certification on a
    <FONT style="white-space: nowrap">month-to-month</FONT>
    basis has had or will have any material impact on our
    <FONT style="white-space: nowrap">day-to-day</FONT>
    operations. However, there can be no assurance that the
    Department of Education will recertify us while the
    investigation by the Office of Inspector General of the
    Department of Education is being conducted, while the <I>qui
    tam</I> lawsuit is pending, or at all, or that it will not
    impose restrictions as a condition of approving our pending
    recertification application or with respect to any future
    recertification. If the Department of Education does not renew
    or withdraws our certification to participate in the
    Title&#160;IV programs at any time, our students would no longer
    be able to receive Title&#160;IV program funds. Similarly, the
    Department of Education could renew our certification, but
    restrict or delay our students&#146; receipt of Title&#160;IV
    funds, limit the number of students to whom we could disburse
    such funds, or place other restrictions on us that could be
    similar to, or more or less restrictive than, the restrictions
    that the Department of Education imposed on us in connection
    with our recertification in 2005. Any of these outcomes would
    have a material adverse effect on our enrollments and us.
</DIV>

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    <BR>
    46
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Administrative capability.</I>&#160;&#160;Department of
    Education regulations specify extensive criteria by which an
    institution must establish that it has the requisite
    &#147;administrative capability&#148; to participate in the
    Title&#160;IV programs. To meet the administrative capability
    standards, an institution must, among other things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    comply with all applicable Title&#160;IV program requirements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    have an adequate number of qualified personnel to administer the
    Title&#160;IV programs;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    have acceptable standards for measuring the satisfactory
    academic progress of its students;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not have student loan cohort default rates above specified
    levels;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    have various procedures in place for awarding, disbursing and
    safeguarding Title&#160;IV funds and for maintaining required
    records;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    administer the Title&#160;IV programs with adequate checks and
    balances in its system of internal controls;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    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;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provide financial aid counseling to its students;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    refer to the Department of Education&#146;s Office of Inspector
    General any credible information indicating that any student,
    parent, employee, third-party servicer or other agent of the
    institution has engaged in any fraud or other illegal conduct
    involving the Title&#160;IV programs;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    submit all required reports and financial statements in a timely
    manner;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not otherwise appear to lack administrative capability.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If an institution fails to satisfy any of these criteria, the
    Department of Education may:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    require the institution to repay Title&#160;IV funds its
    students previously received;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    transfer the institution from the advance method of payment of
    Title&#160;IV funds to heightened cash monitoring status or the
    reimbursement system of payment;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    place the institution on provisional certification
    status;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    commence a proceeding to impose a fine or to limit, suspend or
    terminate the institution&#146;s participation in the
    Title&#160;IV programs.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Department of Education also recently published proposed
    revisions to the administrative capability regulations. These
    revisions include provisions related to (i)&#160;reporting to
    the Department of Education any reasonable reimbursements paid
    or provided by a lender to institutional employees with loan or
    other financial aid responsibilities and
    (ii)&#160;implementation of the new three year cohort default
    rate rules. Following review of any comments, the Department of
    Education will publish final regulations. If such final
    regulations are published by November&#160;1, 2009, which is
    expected, such new regulations will be effective on July&#160;1,
    2010. We will have to make certain administrative and reporting
    changes to adapt our systems and practices to meet the
    requirements of these new regulations when they take effect, and
    we are still assessing the other potential impacts, if any, of
    these proposed regulations on our business. In addition, as part
    of our transition from a &#147;term-based&#148; financial aid
    system (where all students, including online students, begin
    programs and are eligible to receive financial aid at periodic
    start dates pursuant to a calendar-based term system) to a
    &#147;borrower-based&#148; financial aid system (where each
    student may begin a program and be eligible to receive financial
    aid at any time throughout the year), we are converting our back
    office system from Datatel to a series of programs developed by
    Campus Management Corp., including CampusVue and CampusPortal.
    This conversion is intended to allow us to manage our
    non-traditional online students with greater ease and
    flexibility by providing for rolling and flexible start dates.
    If we do not effectively implement this system or if the system
    does not operate as intended, it could affect our ability to
    comply with the Department of Education&#146;s administrative
    capability requirements. If we are found not to have satisfied
    the Department of
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    47
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Education&#146;s administrative capability requirements, our
    students could lose, or be limited in their access to,
    Title&#160;IV program funding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Financial responsibility.</I>&#160;&#160;The Higher Education
    Act and Department of Education regulations establish extensive
    standards of financial responsibility that institutions such as
    Grand Canyon University must satisfy in order to participate in
    the Title&#160;IV programs. The Department of Education
    evaluates institutions for compliance with these standards on an
    annual basis, based on the institution&#146;s annual audited
    financial statements, as well as when the institution applies to
    the Department of Education to have its eligibility to
    participate in the Title&#160;IV programs recertified. The most
    significant financial responsibility standard is the
    institution&#146;s composite score, which is derived from a
    formula established by the Department of Education based on
    three financial ratios:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    equity ratio, which measures the institution&#146;s capital
    resources, financial viability and ability to borrow;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    primary reserve ratio, which measures the institution&#146;s
    ability to support current operations from expendable
    resources;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    net income ratio, which measures the institution&#146;s ability
    to operate at a profit or within its means.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Department of Education 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. The Department
    of Education then assigns a weighting percentage to each ratio
    and adds the weighted scores for the three ratios together to
    produce a composite score for the institution. The composite
    score for the institution&#146;s most recent fiscal year must be
    at least 1.5 for the institution to be deemed financially
    responsible without the need for further Department of Education
    oversight. In addition to having an acceptable composite score,
    an institution must, among other things, provide the
    administrative resources necessary to comply with Title&#160;IV
    program requirements, meet all of its financial obligations
    including required refunds to students and any Title&#160;IV
    liabilities and debts, be current in its debt payments, and not
    receive an adverse, qualified, or disclaimed opinion by its
    accountants in its audited financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    When we were recertified by the Department of Education in 2005
    to continue participating in the Title&#160;IV programs, the
    Department of Education advised us that we did not satisfy its
    standards of financial responsibility, based on our fiscal year
    2004 financial statements, as submitted to the Department of
    Education. As a result of this and other concerns about our
    administrative capability, the Department of Education required
    us to post a letter of credit, accept restrictions on the growth
    of our program offerings and enrollment, and receive
    Title&#160;IV funds under the heightened cash monitoring system
    of payment rather than by advance payment. In October 2006, the
    Department of Education eliminated the letter of credit
    requirement and allowed the growth restrictions to expire, based
    upon its review of our fiscal year 2005 financial statements. We
    have subsequently submitted our fiscal year 2006, 2007, and 2008
    financial statements to the Department of Education as required,
    and we calculated that our composite score for each such fiscal
    year exceeded 1.5. We therefore believe that we meet the
    Department of Education&#146;s financial responsibility
    standards for our most recently completed fiscal year.
</DIV>

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    If the Department of Education were to determine that we did not
    meet the financial responsibility standards due to a failure to
    meet the composite score or other factors, we would expect to be
    able to establish financial responsibility on an alternative
    basis permitted by the Department of Education, which could
    include, in the Department&#146;s discretion, posting a letter
    of credit, accepting provisional certification, complying with
    additional Department of Education monitoring requirements,
    agreeing to receive Title&#160;IV program funds under an
    arrangement other than the Department of Education&#146;s
    standard advance funding arrangement, such as the reimbursement
    system of payment or heightened cash monitoring, and complying
    with or accepting other limitations on our ability to increase
    the number of programs we offer or the number of students we
    enroll.
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    The requirement to post a letter of credit or other sanctions
    imposed by the Department of Education could increase our cost
    of regulatory compliance and adversely affect our cash flows. If
    we are unable to meet the minimum composite score or comply with
    the other standards of financial responsibility, and could not
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    post a required letter of credit or comply with the alternative
    bases for establishing financial responsibility, our students
    could lose their access to Title&#160;IV program funding.
</DIV>

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    <I>Return of Title&#160;IV funds for students who
    withdraw.</I>&#160;&#160;When a student who has received
    Title&#160;IV funds withdraws from school, the institution must
    determine the amount of Title&#160;IV program funds the student
    has &#147;earned.&#148; If the student withdraws during the
    first 60% of any period of enrollment or payment period, the
    amount of Title&#160;IV program funds that the student has
    earned is equal to a pro rata portion of the funds the student
    received or for which the student would otherwise be eligible.
    If the student withdraws after the 60% threshold, then the
    student is deemed to have earned 100% of the Title&#160;IV
    program funds he or she received. The institution must return
    the unearned Title&#160;IV program funds to the appropriate
    lender or the Department of Education in a timely manner, which
    is generally no later than 45&#160;days after the date the
    institution determined that the student withdrew. If such
    payments are not timely made, the institution will be required
    to submit a letter of credit to the Department of Education
    equal to 25% of the Title&#160;IV funds that the institution
    should have returned for withdrawn students in its most recently
    completed fiscal year. Under Department of Education
    regulations, late returns of Title&#160;IV program funds for 5%
    or more of the withdrawn students in the audit sample in the
    institution&#146;s annual Title&#160;IV compliance audit for
    either of the institution&#146;s two most recent fiscal years or
    in a Department of Education program review triggers this letter
    of credit requirement. We did not exceed this 5% threshold in
    our annual Title&#160;IV compliance audit in our 2006, 2007, or
    2008 fiscal years.
</DIV>

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    <I>The &#147;90/10 Rule.&#148;&#160;&#160;</I>A requirement of
    the Higher Education Act, commonly referred to as the
    &#147;90/10 Rule,&#148; that is applicable only to for-profit,
    postsecondary educational institutions like us, provides that an
    institution loses its eligibility to participate in the
    Title&#160;IV programs, if, under a complex regulatory formula
    that requires cash basis accounting and other adjustments to the
    calculation of revenue, the institution derives more than 90% of
    its revenues for each of two consecutive fiscal years from
    Title&#160;IV program funds. This rule provides that an
    institution that violates this revenue limit becomes ineligible
    to participate in the Title&#160;IV programs as of the first day
    of the fiscal year following the second consecutive fiscal year
    in which it exceeds the 90% threshold, and its period of
    ineligibility extends for at least two consecutive fiscal years.
    If an institution exceeds the 90% threshold for two consecutive
    fiscal years and it and its students have received Title&#160;IV
    funds during the period of ineligibility, the institution will
    be required to return those funds to the applicable lender or
    the Department of Education. If an institution&#146;s rate
    exceeds 90% for any single fiscal year, it will be placed on
    provisional certification for at least two fiscal years. The
    August 2008 reauthorization of the Higher Education Act included
    significant revisions to the &#147;90/10 Rule&#148; that became
    effective upon the date of the law&#146;s enactment.
</DIV>

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    Recent changes in federal law that increased Title&#160;IV grant
    and loan limits, and any additional increases in the future, may
    result in an increase in the revenues we receive from the
    Title&#160;IV programs, which could make it more difficult for
    us to satisfy the &#147;90/10 Rule.&#148; In addition, economic
    downturns that adversely affect the employment circumstances of
    our students or their parents, or that reduce the availability
    of private loans for our students, could also increase their
    reliance on Title&#160;IV programs. However, such effects may be
    mitigated by other provisions of the 2008 Higher Education Act
    reauthorization that allow institutions, when calculating their
    compliance with this revenue test, to exclude from their
    Title&#160;IV revenues for a three-year period the additional
    federal student loan amounts that became available through the
    Unsubsidized Stafford Loan Program starting in July 2008, and to
    include more non-Title&#160;IV revenues, such as revenues from
    institutional loans under certain circumstances. Using the
    Department of Education&#146;s formula under the
    <FONT style="white-space: nowrap">&#147;90/10&#160;Rule&#148;</FONT>
    that was in effect prior to the August 2008 reauthorization of
    the Higher Education Act, for our 2007 and 2008 fiscal years, we
    derived approximately 74.0% and 78.6%, respectively, of our
    revenues (calculated on a cash basis) from Title&#160;IV program
    funds. These rates have been reviewed by our financial
    accounting firm as reflected in the notes to our audited
    financial statements for each fiscal year. We are reviewing the
    Department of Education&#146;s proposed regulations and other
    factors bearing on the trends in our percentage under the 90/10
    Rule for our 2009 fiscal year and future years. However, as a
    result of recent changes in federal law that increased
    Title&#160;IV grant and loan limits, as well as the current
    economic downturn, which has adversely affected the employment
    circumstances of our students and their parents and increased
    their reliance on Title&#160;IV programs, we expect the
    percentage of our revenue that we receive from the Title&#160;IV
    programs to continue to increase in the future, making it more
    difficult for us to satisfy this requirement.
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    Exceeding the 90% threshold such that we lost our eligibility to
    participate in the Title&#160;IV programs would have a material
    adverse effect on our business, prospects, financial condition,
    and results of operations.
</DIV>

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    <I>Student loan defaults.</I>&#160;&#160;Under the Higher
    Education Act, an educational institution may lose its
    eligibility to participate in some or all of the Title&#160;IV
    programs if defaults by its students on the repayment of their
    FFEL student loans or Federal Direct Loans exceed certain
    levels. For each federal fiscal year, the Department of
    Education calculates a rate of student defaults for each
    institution (known as a &#147;cohort default rate&#148;). An
    institution&#146;s cohort default rate for a federal fiscal year
    historically has been calculated by determining the rate at
    which borrowers who became subject to their repayment obligation
    in one federal fiscal year default in that same year or by the
    end of the following federal fiscal year (the &#147;two-year
    method&#148;). The reauthorization of the Higher Education Act
    in 2008 extended the measurement period for cohort default rates
    so that the rate is calculated by determining the rate at which
    borrowers who became subject to their repayment obligation in
    one federal fiscal year default in that same year or by the end
    of the second following federal fiscal year (the
    &#147;three-year method&#148;), which is expected to increase
    cohort default rates for most if not all institutions.
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    The Department of Education has proposed a regulation indicating
    that it will begin to implement this extended measurement period
    for the cohort default rates that will be calculated for loans
    that enter repayment in federal fiscal year 2009, which is the
    year that ends on September&#160;30, 2009. The Department of
    Education has proposed a transition period of three years during
    which it will calculate two cohort default rates for each
    institution for each of federal fiscal years 2009, 2010 and
    2011, with one such rate measured under the two-year method and
    the other such rate measured under the three-year method. The
    cohort default rates for federal fiscal year 2009, 2010 and
    2011, as calculated under the new three-year method, are not
    expected to be published until calendar years 2012, 2013 and
    2014.
</DIV>

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    The Department of Education will apply different legal
    thresholds to measure an institution&#146;s compliance under
    each set of rates. If the Department of Education notifies an
    institution that its cohort default rates exceed 25%, as
    calculated under the two-year method, for each of its three most
    recent federal fiscal years, or exceed 30%, as calculated under
    the three-year method, for each of the three most recent federal
    fiscal years, the institution&#146;s participation in the FFEL
    program, the FDL program and the Pell program ends 30&#160;days
    after that notification, unless the institution appeals that
    determination in a timely manner on specified grounds and
    according to specified procedures. In addition, an
    institution&#146;s participation in the FFEL program and the FDL
    program ends 30&#160;days after notification by the Department
    of Education that its most recent cohort default rate, as
    calculated under either the two-year method or the three-year
    method, is greater than 40%, unless the institution timely
    appeals that determination on specified grounds and according to
    specified procedures. An institution whose participation ends
    under either of these provisions may not participate in the
    relevant programs for the remainder of the fiscal year in which
    the institution receives the notification and for the next two
    fiscal years. If an institution&#146;s cohort default rate for
    any single federal fiscal year equals or exceeds 25% under the
    two-year method, or 30% under the three-year method, the
    Department of Education may place the institution on provisional
    certification status.
</DIV>

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    Our cohort default rates on FFEL program loans for the 2004,
    2005 and 2006 federal fiscal years, the three most recent years
    for which such rates have been calculated, were 1.4%, 1.8% and
    1.6%, respectively. Our draft cohort default rate for the 2007
    federal fiscal year is 1.4%. We expect our cohort default rate
    for the 2008 federal fiscal year to increase due primarily to
    the impact of current economic conditions on our students and
    former students, although we expect such rate to remain well
    below the Department of Education&#146;s thresholds.
</DIV>

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    Our students have begun the process of applying for loans under
    the FDL program for the fall of 2009. When these loans are
    disbursed, they will be combined with our students&#146; FFEL
    loans in calculating our annual student loan cohort default
    rate. In such case, the potential sanctions discussed in this
    section would be based on the combined cohort default rate.
</DIV>

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    <I>Incentive compensation rule.</I>&#160;&#160;An institution
    that participates in the Title&#160;IV programs may not provide
    any commission, bonus, or other incentive payment based directly
    or indirectly on success in securing enrollments or financial
    aid to any person or entity engaged in any student recruitment,
    admissions, or financial aid awarding activity. The Department
    of Education&#146;s regulations set forth 12 &#147;safe
    harbors&#148; which
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    describe payments and arrangements that do not violate the
    incentive compensation rule. The Department of Education&#146;s
    regulations make clear that the safe harbors are not a complete
    list of permissible practices under this law. For example, one
    of these safe harbors permits adjustments to fixed salary for
    enrollment personnel provided that such adjustments are not made
    more than twice during any twelve month period, and that any
    adjustment is not based solely on the number of students
    recruited, admitted, enrolled, or awarded financial aid, but the
    regulations do not address other practices, such as the
    provision of non-cash awards to enrollment personnel. The
    restrictions of the incentive compensation rule also extend to
    any third-party companies that an educational institution
    contracts with for student recruitment, admissions, or financial
    aid awarding services. Since 2005, we have engaged Mind Streams,
    LLC to assist us with student recruitment activities.
</DIV>

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    In recent years, several for-profit education companies have
    been faced with whistleblower lawsuits, known as &#147;qui
    tam&#148; cases, brought by current or former employees alleging
    that their institution had made impermissible incentive
    payments. A <I>qui tam </I>case is a civil lawsuit brought by
    one or more individuals (a &#147;relator&#148;) on behalf of the
    federal government for an alleged submission to the government
    of a false claim for payment. The relator, often a current or
    former employee, is entitled to a share of the government&#146;s
    recovery in the case. A <I>qui tam </I>action is always filed
    under seal and remains under seal until the government decides
    whether to intervene in the case. If the government intervenes,
    it takes over primary control of the litigation. If the
    government declines to intervene in the case, the relator may
    nonetheless elect to continue to pursue the litigation at his or
    her own expense on behalf of the government.
</DIV>

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    On September&#160;11, 2008, we were served with a <I>qui tam
    </I>lawsuit that had been filed against us in August 2007, in
    the United States District Court for the District of Arizona by
    a then-current employee on behalf of the federal government. All
    proceedings in the lawsuit had been under seal until
    September&#160;5, 2008, when the court unsealed the first
    amended complaint, which had been filed on August&#160;11, 2008.
    The <I>qui tam </I>lawsuit alleges, among other things, that we
    violated the False Claims Act by knowingly making false
    statements, and submitting false records or statements, from at
    least 2001 to the present, to get false or fraudulent claims
    paid or approved, and asserts that we have improperly
    compensated certain of our enrollment counselors in violation of
    the Title&#160;IV law governing compensation of such employees,
    and as a result, improperly received Title&#160;IV program
    funds. The complaint specifically alleges that some of our
    compensation practices with respect to our enrollment personnel,
    including providing non-cash awards, have violated the
    Title&#160;IV law governing compensation. While we believe that
    our compensation policies and practices at issue in the
    complaint have not been based on success in enrolling students
    in violation of applicable law, the Department of
    Education&#146;s regulations and interpretations of the
    incentive compensation law do not establish clear criteria for
    compliance in all circumstances and some of our practices,
    including in respect of non-cash awards, have not been within
    the scope of any specific &#147;safe harbor&#148; provided in
    the compensation regulations. The complaint seeks treble the
    amount of unspecified damages sustained by the federal
    government in connection with our receipt of Title&#160;IV
    funding, a civil penalty for each violation of the False Claims
    Act, attorneys&#146; fees, costs, and interest. We filed a
    motion to dismiss this case in November 2008, which was denied
    by the court in February 2009, and we have continued to
    vigorously contest this lawsuit.
</DIV>

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    Pursuant to the court&#146;s mandatory scheduling order, we have
    entered into settlement discussions with respect to the <I>qui
    tam </I>matter with the relator. In connection with such
    discussions, we are negotiating for a comprehensive settlement
    that would include, among other things, the resolution by the
    Office of Inspector General of its investigation. Accordingly,
    any such settlement would need to be approved not only by the
    relator, but by the U.S.&#160;Department of Justice (which has
    authority to approve settlements of False Claims Act matters),
    and the Department of Education. While we cannot assure you that
    this matter will be settled on terms acceptable to us or at all,
    we do not believe that any potential settlement, if in the
    amount (which we believe is generally in the range of other
    settlements of similar <I>qui tam </I>litigation against other
    for-profit education companies) and on the terms currently under
    discussion, will materially adversely affect our business,
    operations, or liquidity, although any charge taken in
    connection with such a potential settlement would likely be
    material to our operating results and cash flow for the periods
    affected by the charge. If such settlement does not occur, we
    would continue to vigorously defend this lawsuit.
</DIV>

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    The Office of Inspector General of the Department of Education
    is responsible for, among other things, promoting the
    effectiveness and integrity of the Department of
    Education&#146;s programs and operations, including
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    compliance with applicable statutes and regulations. The Office
    of Inspector General performs investigations of alleged
    violations of law, including cases of alleged fraud and abuse,
    or other identified vulnerabilities, in programs administered or
    financed by the Department of Education, including matters
    related to the incentive compensation rule. On August&#160;14,
    2008, the Office of Inspector General served an administrative
    subpoena on Grand Canyon University requiring us to provide
    certain records and information related to performance reviews
    and salary adjustments for all of our enrollment counselors and
    managers from January&#160;1, 2004 to the present. The Office of
    Inspector General&#146;s investigation is focused on whether we
    have compensated any of our enrollment counselors or managers in
    a manner that violated the Title&#160;IV statutory requirements
    or the related Department of Education regulations concerning
    the payment of incentive compensation based on success in
    securing enrollments or financial aid. We have been cooperating
    with the Office of Inspector General to facilitate its
    investigation and have completed production of all requested
    documents. See &#147;Risk Factors&#160;&#151; The Office of
    Inspector General of the Department of Education has commenced
    an investigation of Grand Canyon University, which is ongoing
    and which may result in fines, penalties, other sanctions, and
    damage to our reputation in the industry.&#148;
</DIV>

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    Any fine or other sanction resulting from the Office of
    Inspector General investigation or otherwise, or any monetary
    liability resulting from the <I>qui tam </I>action, could damage
    our reputation and impose significant costs on us, which could
    have a material adverse effect on our business, prospects,
    financial condition, and results of operations. We cannot
    presently predict the ultimate outcome of the qui tam lawsuit or
    the Office of Inspector General investigation or any liability
    or other sanctions that might result.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In May 2009, the Department of Education announced that it was
    initiating a process to revise its regulations in certain areas,
    including the regulations implementing the incentive
    compensation rule. The process will involve convening one or
    more &#147;negotiated rulemaking&#148; teams composed of various
    representatives of the postsecondary education community
    nationally, as well as Department of Education employees, to
    consider how the current regulations should be revised. The
    Department of Education has stated that it intends for the
    committees to be appointed and to begin their work in the fall
    of 2009. Following a committee&#146;s review and drafting of
    possible revisions to the incentive compensation regulations,
    the Department of Education will develop and publish proposed
    revisions to the regulations, on which members of the public
    will be invited to provide comments. Following review of any
    public comments, the Department of Education will publish final
    new regulations. Under current law, any such revisions to the
    current incentive compensation regulations would not take effect
    any earlier than July&#160;1, 2011.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Compliance reviews.</I>&#160;&#160;We are subject to
    announced and unannounced compliance reviews and audits by
    various external agencies, including the Department of
    Education, its Office of Inspector General, state licensing
    agencies, agencies that guarantee FFEL loans, the applicable
    state approving agencies for financial assistance to veterans,
    and accrediting commissions. As part of the Department of
    Education&#146;s ongoing monitoring of institutions&#146;
    administration of the Title&#160;IV programs, the Higher
    Education Act also requires institutions to annually submit to
    the Department of Education a Title&#160;IV compliance audit
    conducted by an independent certified public accountant in
    accordance with applicable federal and Department of Education
    audit standards. In addition, to enable the Department of
    Education to make a determination of an institution&#146;s
    financial responsibility, each institution must annually submit
    audited financial statements prepared in accordance with
    Department of Education regulations.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Privacy of student records.</I>&#160;&#160;The Family
    Educational Rights and Privacy Act of 1974, or FERPA, and the
    Department of Education&#146;s FERPA regulations require
    educational institutions to protect the privacy of
    students&#146; educational records by limiting an
    institution&#146;s disclosure of a student&#146;s personally
    identifiable information without the student&#146;s prior
    written consent. FERPA also requires institutions to allow
    students to review and request changes to their educational
    records maintained by the institution, to notify students at
    least annually of this inspection right, and to maintain records
    in each student&#146;s file listing requests for access to and
    disclosures of personally identifiable information and the
    interest of such party in that information. If an institution
    fails to comply with FERPA, the Department of Education may
    require corrective actions by the institution or may terminate
    an institution&#146;s receipt of further federal funds. In
    addition, educational institutions are obligated to safeguard
    student information pursuant to the Gramm-Leach-Bliley Act, or
    GLBA, a federal law designed to protect consumers&#146; personal
    financial information held by financial institutions and
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    other entities that provide financial services to consumers.
    GLBA and the applicable GLBA regulations require an institution
    to, among other things, develop and maintain a comprehensive,
    written information security program designed to protect against
    the unauthorized disclosure of personally identifiable financial
    information of students, parents, or other individuals with whom
    such institution has a customer relationship. If an institution
    fails to comply with the applicable GLBA requirements, it may be
    required to take corrective actions, be subject to monitoring
    and oversight by the FTC, and be subject to fines or penalties
    imposed by the FTC. For-profit educational institutions are also
    subject to the general deceptive practices jurisdiction of the
    FTC with respect to their collection, use, and disclosure of
    student information. The institution must also comply with the
    FTC Red Flags Rule, a section of the federal Fair Credit
    Reporting Act, that requires the establishment of guidelines and
    policies regarding identity theft related to student credit
    accounts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Potential effect of regulatory violations.</I>&#160;&#160;If
    we fail to comply with the regulatory standards governing the
    Title&#160;IV programs, the Department of Education could impose
    one or more sanctions, including transferring us to the
    reimbursement or cash monitoring system of payment, requiring us
    to repay Title&#160;IV program funds, requiring us to post a
    letter of credit in favor of the Department of Education as a
    condition for continued Title&#160;IV certification, taking
    emergency action against us, initiating proceedings to impose a
    fine or to limit, suspend, or terminate our participation in the
    Title&#160;IV programs, or referring the matter for civil or
    criminal prosecution. Since we are provisionally certified to
    participate in the Title&#160;IV programs on a
    <FONT style="white-space: nowrap">month-to-month</FONT>
    basis, the Department of Education could allow our certification
    to expire at the end of any month without advance notice and
    without any formal procedure for review of such action. In
    addition, the agencies that guarantee FFEL loans for our
    students could initiate proceedings to limit, suspend, or
    terminate our eligibility to provide FFEL loans in the event of
    certain regulatory violations. If such sanctions or proceedings
    were imposed against us and resulted in a substantial
    curtailment or termination of our participation in the
    Title&#160;IV programs, our enrollments, revenues, and results
    of operations would be materially and adversely affected.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we lost our eligibility to participate in the Title&#160;IV
    programs, or if the amount of available Title&#160;IV program
    funds was reduced, we would seek to arrange or provide
    alternative sources of revenue or financial aid for students. We
    believe that one or more private organizations would be willing
    to provide financial assistance to our students, but there is no
    assurance that this would be the case. The interest rate and
    other terms of such financial aid would likely not be as
    favorable as those for Title&#160;IV program funds, and we might
    be required to guarantee all or part of such alternative
    assistance or might incur other additional costs in connection
    with securing such alternative assistance. It is unlikely that
    we would be able to arrange alternative funding on any terms to
    replace all the Title&#160;IV funding our students receive.
    Accordingly, our loss of eligibility to participate in the
    Title&#160;IV programs, or a reduction in the amount of
    available Title&#160;IV program funding for our students, would
    have a material adverse effect on our results of operations,
    even if we could arrange or provide alternative sources of
    revenue or student financial aid.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the actions that may be brought against us as a
    result of our participation in the Title&#160;IV programs, we
    are also subject to complaints and lawsuits relating to
    regulatory compliance brought not only by our regulatory
    agencies, but also by other government agencies and third
    parties, such as present or former students or employees and
    other members of the public.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Uncertainties, increased oversight, and changes in student
    loan environment.</I>&#160;&#160;Since 2007, student loan
    programs, including the Title&#160;IV programs, have come under
    increased scrutiny by the Department of Education, Congress,
    state attorneys general, and other parties. Issues that have
    received extensive attention include allegations of conflicts of
    interest between some institutions and lenders that provide
    Title&#160;IV loans, questionable incentives given by lenders to
    some schools and school employees, allegations of deceptive
    practices in the marketing of student loans, and schools leading
    students to use certain lenders. Several institutions and
    lenders have been cited for these problems and have paid several
    million dollars in the aggregate to settle those claims. The
    practices of numerous other schools and lenders are being
    examined by government agencies at the federal and state level.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of the increased scrutiny of student loan programs,
    Congress has passed new laws, the Department of Education has
    enacted stricter regulations, and several states have adopted
    codes of conduct or enacted state laws that further regulate the
    conduct of lenders, schools, and school personnel. These new
    laws
</DIV>

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    and regulations, among other things, limit schools&#146;
    relationships with lenders, restrict the types of services that
    schools may receive from lenders, prohibit lenders from
    providing other types of funding to schools in exchange for
    Title&#160;IV loan volume, require schools to provide additional
    information to students concerning institutionally preferred
    lenders, and significantly reduce the amount of federal payments
    to lenders who participate in the Title&#160;IV loan programs.
    In addition, recent adverse market conditions for consumer loans
    in general have adversely affected the student lending
    marketplace.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The cumulative impact of these developments and conditions has
    caused some lenders to cease providing Title&#160;IV loans to
    students, including some lenders that previously provided
    Title&#160;IV loans to our students. Other lenders have reduced
    the benefits and increased the fees associated with the
    Title&#160;IV loans they do provide. We and other schools have
    had to modify student loan practices in ways that result in
    higher administrative costs. If the costs of their Title&#160;IV
    loans increase, some students may decide not to take out loans
    and not enroll in a postsecondary institution. In May 2008, new
    federal legislation was enacted to attempt to ensure that all
    eligible students would be able to obtain Title&#160;IV loans in
    the future and that a sufficient number of lenders would
    continue to provide Title&#160;IV loans. Among other things,
    that legislation:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    authorized the Department of Education to purchase Title&#160;IV
    loans from lenders, thereby providing capital to the lenders to
    enable them to continue making Title&#160;IV loans to
    students;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    permitted the Department of Education to designate institutions
    eligible to participate in a &#147;lender of last resort&#148;
    program, under which federally recognized student loan guaranty
    agencies would be required to make Title&#160;IV loans to all
    otherwise eligible students at those institutions.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    While this legislation appears to have provided some stability
    to the marketplace for Title&#160;IV loans, it is not yet clear
    if it ultimately will be effective in ensuring students&#146;
    access to Title&#160;IV loans. The environment surrounding
    access to and cost of student loans remains in a state of flux.
    The Department of Education proposed new regulations regarding
    student loans in July 2009, which could go into effect on
    July&#160;1, 2010, and Congress is considering legislation to
    eliminate the FFEL loan program and move all federal student
    lending into the FDL program. The uncertainty surrounding these
    issues, and any resolution of these issues that increases loan
    costs or reduces students&#146; access to Title&#160;IV loans,
    may adversely affect our student enrollments. Although we are
    approved to participate in the FDL program, because a
    significant percentage of our revenue is derived from the
    Title&#160;IV programs, any action by Congress that
    significantly reduces Title&#160;IV program funding or our
    ability or the ability of our students to participate in the
    Title&#160;IV programs could increase our costs of compliance,
    reduce the ability of some students to finance their education
    at our institution, require us to seek to arrange for other
    sources of financial aid for our students and materially
    decrease our student enrollment, each of which could have a
    material adverse effect on us. In addition, a transition to the
    FDL program could cause disruptions in the administration of
    Title&#160;IV program loans to our students if we or the
    Department of Education encounter difficulties with the systems
    or processes necessary for increased FDL program loans.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Regulatory
    Standards that May Restrict Institutional Expansion or Other
    Changes</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Many actions that we may wish to take in connection with
    expanding our operations or other changes are subject to review
    or approval by the applicable regulatory agencies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Adding teaching locations, implementing new educational
    programs, and increasing enrollment.</I>&#160;&#160;The
    requirements and standards of state education agencies,
    accrediting commissions, and the Department of Education limit
    our ability in certain instances to establish additional
    teaching locations, implement new educational programs, or
    increase enrollment in certain programs. Many states require
    review and approval before institutions can add new locations or
    programs, and Arizona also limits the number of undergraduate
    nursing students we may enroll (which represents a small portion
    of our overall nursing program). The Arizona State Board for
    Private Postsecondary Education, the Higher Learning Commission,
    and other state education agencies and specialized accrediting
    commissions that authorize or accredit us and our programs
    generally require institutions to notify them in advance of
    adding new locations or implementing new programs, and upon
    notification may undertake a review of the quality of the
    facility or the program and the financial, academic, and other
    qualifications of the institution. For instance, following
    applications we filed in
</DIV>

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    December 2006, we received approval from the Higher Learning
    Commission and the Arizona State Board for Private Postsecondary
    Education in March 2008 to add our first doctoral level program.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With respect to the Department of Education, if an institution
    participating in the Title&#160;IV programs plans to add a new
    location or educational program, the institution must generally
    apply to the Department of Education to have the additional
    location or educational program designated as within the scope
    of the institution&#146;s Title&#160;IV eligibility. However, a
    degree-granting institution such as us is not required to obtain
    the Department of Education&#146;s approval of additional
    programs that lead to an associate, bachelor&#146;s,
    professional, or graduate degree at the same degree level as
    programs previously approved by the Department of Education.
    Similarly, an institution is not required to obtain advance
    approval for new programs that prepare students for gainful
    employment in the same or a related recognized occupation as an
    educational program that has previously been designated by the
    Department of Education as an eligible program at that
    institution if it meets certain minimum-length requirements.
    However, as a condition for an institution to participate in the
    Title&#160;IV programs on a provisional basis, the Department of
    Education can require prior approval of such programs or
    otherwise restrict the number of programs an institution may add
    or the extent to which an institution can modify existing
    educational programs. If an institution that is required to
    obtain the Department of Education&#146;s advance approval for
    the addition of a new program or new location fails to do so,
    the institution may be liable for repayment of the Title&#160;IV
    program funds received by the institution or students in
    connection with that program or enrolled at that location.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Acquiring other schools.</I>&#160;&#160;While we have not
    acquired any other schools in the past, we may seek to do so in
    the future. The Department of Education and virtually all state
    education agencies and accrediting commissions require a company
    to seek their approval if it wishes to acquire another school.
    In our case, we would need to obtain the approval of the Arizona
    State Board for Private Postsecondary Education or other state
    education agency that licenses the school being acquired, the
    Higher Learning Commission, any other accrediting commission
    that accredits the school being acquired, and the Department of
    Education. The level of review varies by individual state and
    accrediting commission, with some requiring approval of such an
    acquisition before it occurs while others only consider approval
    after the acquisition has occurred. The Higher Learning
    Commission would require us to obtain its advance approval of
    such an acquisition. The approval of the applicable state
    education agencies and accrediting commissions is a necessary
    prerequisite to the Department of Education certifying the
    acquired school to participate in the Title&#160;IV programs
    under our ownership. The restrictions imposed by any of the
    applicable regulatory agencies could delay or prevent our
    acquisition of other schools in some circumstances.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Provisional certification.</I>&#160;&#160;Each institution
    must apply to the Department of Education for continued
    certification to participate in the Title&#160;IV programs at
    least every six years, or when it undergoes a change in control,
    and an institution may come under the Department of
    Education&#146;s review when it expands its activities in
    certain ways, such as opening an additional location, adding an
    educational program, or modifying the academic credentials that
    it offers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Department of Education may place an institution on
    provisional certification status if it finds that the
    institution does not fully satisfy all of the eligibility and
    certification standards. In addition, if a company acquires a
    school from another entity, the acquired school will
    automatically be placed on provisional certification when the
    Department of Education approves the transaction. During the
    period of provisional certification, the institution must comply
    with any additional conditions or restrictions included in its
    program participation agreement with the Department of
    Education. If the Department of Education finds that a
    provisionally certified institution is unable to meet its
    responsibilities under its program participation agreement, it
    may seek to revoke the institution&#146;s certification to
    participate in the Title&#160;IV programs without advance notice
    or advance opportunity for the institution to challenge that
    action. In addition, the Department of Education may more
    closely review an institution that is provisionally certified if
    it applies for recertification or approval to open a new
    location, add an educational program, acquire another school, or
    make any other significant change. Students attending
    provisionally certified institutions remain eligible to receive
    Title&#160;IV program funds.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are currently provisionally certified to participate in the
    Title&#160;IV programs on a
    <FONT style="white-space: nowrap">month-to-month</FONT>
    basis. The Department of Education issued our current program
    participation agreement in May 2005, after an extended review
    following the change in control that occurred in February 2004.
    The Department of Education&#146;s 2005 recertification imposed
    certain conditions on us, including a requirement that we post a
    letter of credit, accept restrictions on the growth of our
    program offerings and enrollment, and receive Title&#160;IV
    funds under the heightened cash monitoring system of payment
    rather than by advance payment. In October 2006, the Department
    of Education eliminated the letter of credit requirement and
    allowed the growth restrictions to expire, and in August 2007,
    it eliminated the heightened cash monitoring restrictions and
    returned us to the advance payment method. We submitted our
    application for recertification in March 2008 in anticipation of
    the expiration of our provisional certification on June&#160;30,
    2008. The Department of Education did not make a decision on our
    recertification application by June&#160;30, 2008 and therefore
    our provisional certification to participate in the
    Title&#160;IV programs has been automatically extended on a
    <FONT style="white-space: nowrap">month-to-month</FONT>
    basis until the Department of Education makes its decision.
    Since June 2008, we have filed updates with the Department of
    Education and communicated with Department of Education
    personnel in order to update our pending recertification
    application with relevant information, such as our status as a
    publicly-traded corporation after the initial public offering
    and the identity of the members of our board of directors. There
    can be no assurance that the Department of Education will
    recertify us while the investigation by the Office of Inspector
    General of the Department of Education is being conducted, while
    the qui tam lawsuit is pending, or at all, or that it will not
    impose restrictions as a condition of approving our pending
    recertification application or with respect to any future
    recertification.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Change in ownership resulting in a change in
    control.</I>&#160;&#160;The Department of Education and the
    Higher Learning Commission, as well as many accrediting
    commissions and states require institutions of higher education
    to report or obtain approval of certain changes in control and
    changes in other aspects of institutional organization or
    control. The types of and thresholds for such reporting and
    approval vary among the various regulatory bodies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under Department of Education regulations, an institution that
    undergoes a change in control as defined by the Department of
    Education loses its eligibility to participate in the
    Title&#160;IV programs and must apply to the Department of
    Education in order to reestablish such eligibility. In
    connection with our initial public offering in November 2008, we
    submitted a description of the offering to the Department of
    Education, including a description of the voting agreement that
    forms the basis for the Richardson Voting Group. Based on this
    description, the Department of Education concluded that our
    initial public offering did not result in a change in control
    under the Department of Education&#146;s regulations that were
    applicable to us before we became a publicly-traded corporation.
    With respect to publicly-traded corporations, like us,
    Department of Education regulations provide that a change in
    control occurs if either: (i)&#160;there is an event that would
    obligate the corporation to file a Current Report on
    <FONT style="white-space: nowrap">Form&#160;8-K</FONT>
    with the SEC disclosing a change in control, or (ii)&#160;the
    corporation has a stockholder that owns, or has voting control
    over, at least 25% of the total outstanding voting stock of the
    corporation and is the largest stockholder of the corporation
    (defined in the regulations as a &#147;controlling
    shareholder&#148;), and that controlling shareholder ceases to
    own, or have voting control over, at least 25% of such stock or
    ceases to be the largest stockholder. Based on the number of
    shares of common stock expected to be sold by us and the selling
    stockholders in this offering, we believe that the Richardson
    Voting Group will continue to hold voting power with respect to
    25% or more of our total outstanding voting stock after the
    completion of the offering and that this offering will not
    constitute a change in control under the Department of
    Education&#146;s regulations. See &#147;Beneficial Ownership of
    Common Stock.&#148; We have notified the Department of Education
    of this offering and we plan to initiate further communications
    with the Department of Education to seek its confirmation that
    the offering will not constitute a change in control under its
    standards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Higher Learning Commission provides that an institution must
    obtain its approval in advance of a change in ownership,
    corporate control or structure in order for the institution to
    retain its accredited status. In June 2009, the Higher Learning
    Commission adopted new policies and standards for the review of
    transactions that may constitute such a change in control. One
    standard provides that a transaction may be considered a change
    in control if an individual, entity or group increases or
    decreases its control of shares to greater than or
</DIV>

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    less than 25% of the total outstanding shares of the stock of a
    parent corporation that owns or controls the accredited
    institution. In addition, in the event of a change in control,
    the Higher Learning Commission requires the institution to
    obtain its approval in advance of the change, and in certain
    circumstances that process may require several weeks or several
    months or more to complete. In addition, following a change in
    control, the Higher Learning Commission will conduct an onsite
    evaluation within six months in order to continue the
    institution&#146;s accreditation. The Higher Learning Commission
    did consider our initial public offering in November 2008 to be
    a change in control under its policies and, while it approved
    our consummation of the offering, it informed us that it would
    conduct a site visit to confirm the appropriateness of the
    approval and to evaluate whether we continue to meet the Higher
    Learning Commission&#146;s eligibility criteria. The Higher
    Learning Commission, after conducting its site visit in March
    2009, determined, among other things, that the initial public
    offering was conducted in a manner that did not disrupt our
    ongoing operations and that no further action would be required
    as a result of the change in control, and formally approved the
    change in control in June 2009. Based on the number of shares of
    common stock expected to be sold by us and the selling
    stockholders in this offering, we believe that the Richardson
    Voting Group will continue to hold voting power with respect to
    25% or more of our total outstanding voting stock after the
    completion of the offering and that this offering will not
    constitute a change in control under the Higher Learning
    Commission&#146;s policies. See &#147;Beneficial Ownership of
    Common Stock.&#148; We have submitted a description of this
    offering to the Higher Learning Commission and requested its
    confirmation that the offering will not constitute a change in
    control under its policies and standards, and the Higher
    Learning Commission has informed us that it is reviewing our
    inquiry.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Even if this offering will not constitute a change of control
    under the Department of Education&#146;s regulations or the
    Higher Learning Commission&#146;s policies, under the terms of
    the voting agreement with the Richardson Voting Group, if any
    person party to the voting agreement transfers shares covered by
    the proxy in registered or open-market sales, the proxy is no
    longer effective as to such shares. Accordingly, the number of
    shares over which the Richardson Voting Group will continue to
    hold voting power will decrease over time as shares held by
    other parties to the voting agreement are sold, and we may not
    be aware of these sales since many of the shares subject to the
    voting agreement are held in &#147;street name.&#148; If at any
    time in the future, as a result of such future registered or
    open-market sales, the number of shares over which the
    Richardson Voting Group holds voting power falls below 25%, a
    change in control will occur. At that point, with respect to the
    Department of Education, if we file a timely and materially
    complete application, the Department of Education may
    temporarily certify us on a provisional basis following the
    change in control, so that our students would retain access to
    Title&#160;IV program funds until the Department of Education
    completes its full review. In addition, the Department of
    Education will extend our temporary provisional certification if
    we timely file other required materials, including any approval
    of the change of control by the Higher Learning Commission and
    the Arizona State Board for Private Postsecondary Education, as
    required, and certain required financial information (consisting
    of our recent SEC filings) showing our financial condition. As a
    general matter, an institution is required to file the
    materially complete application within ten business days after
    the change in control, as measured from the date of the event
    that constitutes the change in control. The deadline for an
    institution to timely file the other materials, including the
    financial documentation, that are required following a change in
    control is the last day of the month following the month in
    which the change of control occurs. For an institution that is
    owned by a publicly traded corporation, like us, a related
    Department of Education regulation provides that the deadline to
    notify the Department of Education of a significant change in
    the distribution of the ownership of the institution is ten
    days, as measured from the date on which management of the
    corporation learns of such significant change or, alternatively,
    the date that the institution notifies its accrediting agency of
    such change. If the Department of Education were to determine
    that we failed to meet any of these application and other
    deadlines, our certification would expire and our students would
    not be eligible to receive Title&#160;IV program funds until the
    Department of Education completes its full review, which
    commonly takes several months and may take longer. If the
    Department of Education approves the application after a change
    in control, it would normally certify us on a provisional basis
    for a period of up to approximately three years. The precise
    conditions and duration of our provisional certification in this
    circumstance and what restrictions, if any, may be imposed, are
    difficult to predict because we have been certified on a
    <FONT style="white-space: nowrap">month-to-month</FONT>
    basis for an extended period and are subject to the ongoing
    investigation
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    by the Office of Inspector General of the Department of
    Education and the <I>qui tam</I> lawsuit, which may affect the
    Department of Education&#146;s decision regarding the terms to
    attach when it next renews our certification.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With respect to the Higher Learning Commission, if we anticipate
    that the number of shares over which the Richardson Voting Group
    holds voting power will fall below 25% at any time in the
    future, we would be required to obtain the approval of the
    Higher Learning Commission before such event occurs. However,
    because we may be unaware when such event occurs, we would plan
    to seek the cooperation of the Higher Learning Commission to
    allow us to arrange an appropriate review procedure at that time
    since there may not be an opportunity to obtain the Higher
    Learning Commission&#146;s advance review and approval, as is
    typically required by its policies. Another policy of the Higher
    Learning Commission provides that an institution is obligated to
    provide notice of certain transactions, such as the transfer of
    stock by an investor, promptly after the institution becomes
    reasonably knowledgeable of such transaction. This policy
    suggests that, in certain circumstances, the Higher Learning
    Commission can adapt its procedures to allow an institution,
    like us, to provide notice and seek the necessary approval after
    the institution gains knowledge of an investor transaction such
    as the sale of shares by other parties to the voting agreement,
    but there can be no assurance that would be the case with
    respect to this offering or any such sales of stock that may
    occur following the completion of this offering. In such a
    circumstance, we cannot predict whether the Higher Learning
    Commission would impose any limitations or conditions on us, or
    identify any compliance issues related to us in the context of
    the change in control process, that could result in our loss of
    accreditation by the Higher Learning Commission. Any such loss
    would result in our loss of eligibility to participate in the
    Title&#160;IV programs and cause a significant decline in our
    student enrollments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Many states include the sale of a controlling interest of common
    stock in the definition of a change in control requiring
    approval, but their thresholds for determining a change in
    control vary widely. The standards of the Arizona State Board
    for Private Postsecondary Education provide that an institution
    that is owned by a publicly-traded company whose control is
    vested in the voting members of the board of directors, such as
    Grand Canyon Education, undergoes a change in control if 50% or
    more of the voting members of the board of directors change
    within a
    <FONT style="white-space: nowrap">12-month</FONT>
    period or the chief executive officer of the corporation
    changes. A change in control under the definition of one of the
    other state agencies that regulate us might require us to obtain
    approval of the change in control in order to maintain our
    authorization to operate in that state, and in some cases such
    states could require us to obtain advance approval of the change
    in control.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We notified the Arizona State Board for Private Postsecondary
    Education of our initial public offering and, based on our
    communications with that agency before and after the
    consummation of the initial public offering , we do not believe
    that our initial public offering constituted a change in control
    under Arizona law that was applicable to us before we were a
    publicly traded corporation. We believe that this offering will
    not constitute a change in control under the standards of the
    Arizona State Board for Private Postsecondary Education that are
    applicable to publicly-traded companies because it will not
    result in a change to 50% or more of the voting members of the
    board of directors in a
    <FONT style="white-space: nowrap">12-month</FONT>
    period or since the date that we became a publicly-traded
    corporation, and because it will not result in a change to the
    chief executive officer of the corporation. If we were to
    undergo a change in control under the standards of the Arizona
    State Board of Private Postsecondary Education at any time in
    the future, we would be required to file an application with the
    Arizona State Board for Private Postsecondary Education in order
    to obtain approval for such change in control. We cannot predict
    whether the Arizona State Board for Private Postsecondary
    Education would impose any limitations or conditions on us, or
    identify any compliance issues related to us in the context of
    the change in control process, that could result in our loss of
    authorization in Arizona. Any such loss would result in our loss
    of eligibility to participate in the Title&#160;IV programs and
    cause a significant decline in our student enrollments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We also notified other accrediting commissions and state
    agencies, as we believed necessary, of our initial public
    offering and the reasons why we believed that offering did not
    constitute a change in control under their respective standards,
    or to determine what was required if any such commission or
    agency did consider the offering to constitute a change in
    control. None of the other accrediting commissions and state
    agencies that we notified of our initial public offering advised
    us that it concluded that the offering constituted a change in
    control under its policies or that it required us to take any
    further action. We plan to provide each of these
</DIV>

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    <BR>
    58
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    other accrediting commissions and state agencies with a notice
    and description of this offering before the consummation of the
    offering. We do not believe that any of them will require us to
    obtain their approval in connection with this offering, but we
    cannot be certain of that. If this offering were considered a
    change of control under the standards of any of these
    commissions or agencies, and we failed to obtain the approval of
    that commission or agency, we could lose accreditation, state
    licensure, or be subject to other limitations or penalties.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Additional state regulation.</I>&#160;&#160;Most state
    education agencies impose regulatory requirements on educational
    institutions operating within their boundaries. Some states have
    sought to assert jurisdiction over
    <FONT style="white-space: nowrap">out-of-state</FONT>
    educational institutions offering online degree programs that
    have no physical location in the state but that have some
    activity in the state, such as enrolling or offering educational
    services to students who reside in the state, employing faculty
    who reside in the state, or advertising to or recruiting
    prospective students in the state. State regulatory requirements
    for online education vary among the states, are not well
    developed in many states, are imprecise or unclear in some
    states, and can change frequently. In addition to Arizona, we
    have determined that our activities in certain states constitute
    a presence requiring licensure or authorization under the
    requirements of the state education agency in those states, and
    in other states we have obtained approvals as we have determined
    necessary in connection with our marketing and recruiting
    activities. We review the licensure requirements of other states
    when appropriate to determine whether our activities in those
    states require licensure or authorization by the respective
    state education agencies. Because state regulatory requirements,
    including agency interpretations, can change frequently, and
    because we enroll students from all 50&#160;states and the
    District of Columbia, we expect we will have to seek licensure
    or authorization in additional states in the future. If we fail
    to comply with state licensing or authorization requirements for
    any state, we may be subject to the loss of state licensure or
    authorization by that state, or be subject to other sanctions,
    including restrictions on our activities in that state, fines,
    and penalties. While we do not believe that any of the states in
    which we are currently licensed or authorized, other than
    Arizona, are individually material to our operations, the loss
    of licensure or authorization in a state other than Arizona
    could prohibit us from recruiting prospective students or
    offering services to current students in that state, which could
    significantly reduce our enrollments.
</DIV>

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    <BR>
    59
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<A name='109'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Policies
    and Procedures for Related Person Transactions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have a written related party transactions policy, pursuant to
    which our executive officers, directors and principal
    stockholders, including their immediate family members, are not
    permitted to enter into a related person transaction with us
    without the prior consent of our audit committee. Any request
    for us to enter into a transaction with an executive officer,
    director, principal stockholder or any of such persons&#146;
    immediate family members or affiliates, in which the amount
    involved exceeds $120,000 must be presented to our audit
    committee for review, consideration and approval. All of our
    directors, executive officers and employees are required to
    report to our audit committee any such related person
    transaction. In approving or rejecting the proposed agreement,
    our audit committee will take into account, among other factors
    it deems appropriate, whether the transaction is on terms no
    less favorable than terms generally available to an unaffiliated
    third-party under the same or similar circumstances and the
    extent of the related party&#146;s interest in the transaction.
    Under the policy, if we should discover related person
    transactions that have not been pre-approved, the audit
    committee will be notified and will determine the appropriate
    action, including ratification, rescission or amendment of the
    transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the policy, certain types of transactions have been
    pre-approved by the audit committee, including employment
    arrangements with executive officers, director compensation,
    transactions where all stockholders receive proportional
    benefits, transactions involving competitive bids, regulated
    transactions, and banking-related service transactions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Set forth below is a summary of certain transactions since
    January&#160;1, 2006, in which the Company was or is to be a
    participant and involving our directors, our executive officers,
    beneficial owners of more than 5% of our common stock, and some
    of the entities with which the foregoing persons are affiliated
    or associated, and in which the amount involved exceeds or will
    exceed $120,000.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Investor
    Rights Agreement and Financing Transactions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with our conversion from a limited liability
    company to a corporation and the related investment in us by
    Endeavour Capital and its affiliates (the &#147;Endeavour
    Entities&#148;), and certain other investors on August&#160;24,
    2005, we entered into an investor rights agreement. The investor
    rights agreement, as currently in effect, contains agreements
    among the parties with respect to registration rights. See
    &#147;Description of Capital Stock&#160;&#151; Registration
    Rights.&#148; On December&#160;18, 2007, we sold an aggregate of
    3,829&#160;shares of Series&#160;C preferred stock at a purchase
    price of $3,500.00 per share, or approximately
    $13.4&#160;million in total gross proceeds, of which
    1,675&#160;shares were sold to the Endeavour Entities, and
    834&#160;shares were sold to an investment entity controlled by
    Brent D. Richardson, our Executive Chairman, and Christopher C.
    Richardson, our General Counsel and a director (which shares
    were paid for, in part, by the exchange of 865 outstanding
    shares of Series&#160;B preferred stock purchased in 2006). All
    outstanding shares of the Series&#160;C preferred stock were
    automatically converted into common stock in connection with our
    initial public offering.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Voting
    Agreement</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Department of Education, the Higher Learning Commission, and
    other accrediting commissions and states require institutions of
    higher education to report or obtain approval of certain changes
    in control and changes in other aspects of institutional
    organization or control. In connection with our initial public
    offering, certain of our stockholders entered into a proxy and
    voting agreement, pursuant to which such persons granted to
    Brent D. Richardson, our Executive Chairman, and Christopher C.
    Richardson, our General Counsel and a director, on behalf of the
    Richardson Voting Group, a five-year irrevocable proxy to
    exercise voting authority with respect to certain shares of our
    common stock held by such persons, for so long as such shares
    are held by such persons. Upon the completion of our initial
    public offering, as a result of the proxy and voting agreement,
    the Richardson Voting Group had the power to exercise voting
    authority with respect to 19,516,242&#160;shares of our common
    stock, or 42.9% of our common stock at such time.
</DIV>

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    <BR>
    60
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the terms of the voting agreement, if any person party to
    the voting agreement transfers shares covered by the proxy in
    open-market or other transactions, the proxy is no longer
    effective as to such shares. Accordingly, the number of shares
    over which the Richardson Voting Group will continue to hold
    voting power will decrease over time as shares held by other
    parties to the voting agreement are sold, which sales we may be
    not be aware of since many of the shares held by such other
    parties are held in &#147;street name.&#148; Based on
    information available to us, we believe that, as of
    July&#160;31, 2009, the Richardson Voting Group had the power to
    exercise voting authority with respect to approximately
    17.0&#160;million shares of our common stock, or approximately
    38% of our common stock. After giving effect to this offering,
    and based on the number of shares expected to be sold by us and
    the selling stockholders participating in this offering, we
    believe that the Richardson Voting Group will continue to have
    the power to exercise voting authority with respect to more than
    25% of our common stock. See &#147;Regulation&#148; and
    &#147;Beneficial Ownership of Common Stock.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Special
    Distribution</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We declared a special distribution that was paid promptly after
    the completion of our initial public offering in November 2008
    to our stockholders who owned shares of record immediately prior
    to the consummation of our initial public offering. The
    aggregate amount of the special distribution was equal to 75% of
    the gross proceeds from the sale of common stock in our initial
    public offering, including 75% of the gross proceeds received by
    us from the underwriters&#146; exercise of their over-allotment
    option. The aggregate amount of the special distribution was
    $108.7&#160;million, or approximately $3.27 per common share on
    an as if converted basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth the amount of cash paid as a
    result of the special distribution in respect of outstanding
    shares of our capital stock as to which each of our executive
    officers and directors, as well as persons who were holders of
    5% or more of our common stock at the time, was deemed to have
    sole or shared voting or investment power as of the date of the
    special distribution.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="33%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="17%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="16%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Shares Beneficially<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Special<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Owned and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Date of Acquisition<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Original Acquisition<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Distribution<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Outstanding as of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>of Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Cost of Shares to Which<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Amount for Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>November&#160;18,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Beneficially<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Special Distribution<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Beneficially<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name of Beneficial Owner</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Owned</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Related<SUP style="font-size: 85%; vertical-align: top">(2)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Owned</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom">
    <B>(Dollars in thousands)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><I>5% Stockholders</I></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Endeavour Capital Fund&#160;IV and
    affiliates<SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,035,048
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    August 24, 2005
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    16,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29,547
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    977,090
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    December 18, 2007
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,863
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,195
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,012,138
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21,863
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32,742
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    220 GCU, L.P. and
    affiliates<SUP style="font-size: 85%; vertical-align: top">(4)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,756,328
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    February 2, 2004
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,042
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,554
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,835,130
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    August 24, 2005
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,001
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    545,218
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    December 18, 2007
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,271
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,783
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,136,676
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,563
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23,338
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Staci L.
    Buse<SUP style="font-size: 85%; vertical-align: top">(5)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,347,452
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    February 2, 2004
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,443
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,947
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    155,719
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    December 18, 2007
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    934
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    509
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,503,171
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,377
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,456
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Significant Ventures, LLC
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,767,321
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    February 2, 2004
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,050
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    203,823
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    December 18, 2007
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,223
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    667
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,971,144
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,259
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,717
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><I>Directors</I></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Chad N.
    Heath<SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,035,048
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    August 24, 2005
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29,547
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    977,090
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    December 18, 2007
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,863
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,195
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,012,138
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21,863
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32,742
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    D. Mark
    Dorman<SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,035,048
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    August 24, 2005
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29,547
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    977,090
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    December 18, 2007
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,863
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,195
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,012,138
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21,863
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32,742
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    61
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="33%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="17%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="16%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Shares Beneficially<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Special<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Owned and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Date of Acquisition<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Original Acquisition<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Distribution<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Outstanding as of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>of Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Cost of Shares to Which<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Amount for Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>November&#160;18,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Beneficially<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Special Distribution<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Beneficially<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name of Beneficial Owner</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Owned</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Related<SUP style="font-size: 85%; vertical-align: top">(2)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Owned</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom">
    <B>(Dollars in thousands)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><I>Executive Officers</I></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Brent D.
    Richardson<SUP style="font-size: 85%; vertical-align: top">(5)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,347,452
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    February 2, 2004
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,443
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,947
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    155,719
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    December 18, 2007
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    934
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    509
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,503,171
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,377
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,456
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    John E.
    Crowley<SUP style="font-size: 85%; vertical-align: top">(6)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    382,435
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    February 2, 2004
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    164
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,251
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19,465
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    December 18, 2007
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    117
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    64
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    401,900
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    281
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,315
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Christopher C.
    Richardson<SUP style="font-size: 85%; vertical-align: top">(5)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,348,317
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    February 2, 2004
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,443
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,950
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    155,719
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    December 18, 2007
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    934
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    509
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,504,036
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,377
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,459
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><I>All directors and executive officers as a group</I></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,078,204
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    February 2, 2004
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,050
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23,148
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9,035,048
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    August 24, 2005
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29,547
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,307,993
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    December 18, 2007
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,848
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,277
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,421,245
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    26,898
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    56,972
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    For the purpose of calculating shares beneficially owned and
    outstanding as of November&#160;18, 2008, which was the date
    immediately prior to our initial public offering and the record
    date for purposes of determining the stockholders entitled to
    receive the special distribution, the number of shares of common
    stock deemed outstanding included all shares of common stock
    issuable upon the conversion of all outstanding shares of our
    Series&#160;A and Series C preferred stock. Beneficial ownership
    is determined in accordance with the rules of the SEC that
    generally attribute beneficial ownership of securities to
    persons that possess sole or shared voting power and/or
    investment power with respect to those securities. The persons
    identified in this table have sole voting and investment power
    with respect to all shares shown as beneficially owned by them,
    except as set forth in the footnotes to the table included in
    &#147;Beneficial Ownership of Common Stock.&#148;</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    On August&#160;24, 2005, we converted from a limited liability
    company to a taxable corporation. The reported acquisition cost
    of shares of common stock represents the value of the capital
    contributions originally made to acquire the limited liability
    company interests that were converted into common stock upon
    such conversion plus capital contributions for which no
    additional interests were issued, less capital distributions.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents shares held of record by the Endeavour Entities.
    Messrs.&#160;Chad N. Heath and D. Mark Dorman, each of whom is a
    managing director of Endeavour Capital IV, LLC, the general
    partner of each of the Endeavour Entities, are members of our
    Board of Directors.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents shares previously held of record by 220 GCU, L.P.,
    220 Education, L.P., 220-SigEd, L.P., and SV One, L.P., which,
    prior to our initial public offering, were collectively the
    beneficial owners of more than 5% of our common stock.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents shares previously held of record by Rich Crow
    Enterprises, LLC, and Masters Online, LLC, of which Brent D.
    Richardson, Christopher C. Richardson, and Staci L. Buse were
    members and, in each case, which were attributable to, and
    beneficially owned by, Brent D. Richardson, Christopher C.
    Richardson, or Staci L. Buse, as applicable.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (6) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents shares previously held of record by Rich Crow
    Enterprises, LLC, of which John E. Crowley, our former chief
    operating officer, was a member, which were attributable to, and
    beneficially owned by, John E. Crowley. Mr.&#160;Crowley
    resigned his position as chief operating officer on
    February&#160;17, 2009.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For additional information regarding share ownership, see
    &#147;Beneficial Ownership of Common Stock.&#148;
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    62
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Arrangement
    with Mind Streams</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a party to an agreement with Mind Streams, LLC, which is
    owned and operated, in part, by Gail Richardson, father to Brent
    D. Richardson, our Executive Chairman, and Christopher C.
    Richardson, our General Counsel and director. Pursuant to this
    agreement, Mind Streams identifies qualified applicants for
    admission to Grand Canyon University in return for which it is a
    paid a stated percentage of the net revenue (calculated as
    tuition actually received, less scholarships, refunds, and
    allowances) derived by us from those identified applicants that
    matriculate at Grand Canyon University. The term of the
    agreement runs through December&#160;31, 2010, and can be
    terminated by either party upon 45&#160;days&#146; prior written
    notice. For the years ended December&#160;31, 2006, 2007, and
    2008, and for the six months ended June&#160;30, 2009, we
    expensed $3.7&#160;million, $4.3&#160;million,
    $5.9&#160;million, and $1.8&#160;million, respectively, to Mind
    Streams pursuant to this arrangement for students enrolled and
    expenses reimbursed.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Arrangement
    with Vergo Marketing</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    From time to time we obtain marketing services from Vergo
    Marketing, Inc., of which the
    <FONT style="white-space: nowrap">sister-in-law</FONT>
    of Brent D. Richardson, our Executive Chairman, is a significant
    stockholder and chief executive officer. For the years ended
    December&#160;31, 2007 and 2008, and for the six months ended
    June&#160;30, 2009, we paid Vergo Marketing, Inc.
    $0.5&#160;million, $0.4&#160;million, and $0.2&#160;million,
    respectively, for such services.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Endeavour
    Professional Services Agreement</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with the investment by the Endeavour Entities,
    among others, on August&#160;24, 2005, we entered into a
    professional services agreement with Endeavour Capital IV, LLC.
    Under the agreement, we engaged Endeavour Capital IV, LLC as a
    consultant to our Board of Directors on business and financial
    matters, including, without limitation, corporate strategy,
    budgeting, acquisition and divestiture strategies, and debt and
    equity financings. Under the agreement, we paid Endeavour
    Capital IV, LLC a one time fee of $340,667 upon execution of the
    agreement and agreed to pay Endeavour Capital IV, LLC a
    consulting fee of $250,000 per year thereafter, subject to
    annual increases as determined by the Board of Directors (not
    including those directors appointed by Endeavour) based on
    performance. In addition, we agreed to reimburse Endeavour
    Capital IV, LLC for reasonable legal, due diligence, travel and
    other
    <FONT style="white-space: nowrap">out-of-pocket</FONT>
    expenses, and to indemnify Endeavour Capital IV, LLC and its
    affiliates for any action or inaction related to the agreement,
    except as a result of their gross negligence or intentional
    misconduct. For the years ended December&#160;31, 2006, 2007,
    and 2008, we paid fees to Endeavour Capital IV, LLC in the
    amount of $0.3&#160;million, $0.3&#160;million, and
    $0.4&#160;million, respectively, which amounts, in each year,
    constituted less than 5% of Endeavour Capital IV, LLC&#146;s
    consolidated gross revenues for such year. The professional
    services agreement terminated by its terms upon the closing of
    our initial public offering.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Center
    for Educational Excellence</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Center for Educational Excellence, LLC was created to
    explore opportunities to promote and enhance the academic
    experience we offer. John Crowley, our former Chief Operating
    Officer, is a member of The Center for Educational Excellence,
    LLC. For the year ended December&#160;31, 2007, we paid
    approximately $0.6&#160;million of expenses incurred by The
    Center for Educational Excellence, LLC, of which
    $0.3&#160;million was reimbursed to us, and $0.3&#160;million
    was owed to us and included in due from related parties as of
    December&#160;31, 2007. No amounts were paid by us to The Center
    for Educational Excellence, LLC in 2008 or in the six months
    ended June&#160;30, 2009. The Center for Educational Excellence,
    LLC was dissolved on April&#160;29, 2009.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Consulting
    Agreements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On January&#160;8, 2004, we entered into consulting agreements
    with Significant Ventures, Inc., predecessor to Significant
    Ventures, LLC, which is one of our significant stockholders, and
    with 220 Partners, LLC, which is affiliated with Charles M.
    Preston III, one of our former directors. For the year ended
    December&#160;31, 2006, we paid $0.4&#160;million and
    $0.3&#160;million to Significant Ventures and 220 Partners,
    respectively, for services rendered and expenses reimbursed
    pursuant to these agreements. These consulting agreements
    terminated by their terms on December&#160;31, 2006.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    63
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='110'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">BENEFICIAL
    OWNERSHIP OF COMMON STOCK</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth information regarding the
    beneficial ownership of our common stock as of June&#160;30,
    2009 for:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    each person, or group of affiliated persons, known to us to own
    beneficially 5% or more of our outstanding common stock;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    each of our directors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    each of our named executive officers;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all of our directors and named executive officers as a group.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The information in the following table and related footnotes has
    been presented in accordance with the rules of the SEC. Under
    SEC rules, beneficial ownership of a class of capital stock
    includes any shares of such class as to which a person, directly
    or indirectly, has or shares voting power or investment power
    and also any shares as to which a person has the right to
    acquire such voting or investment power within 60&#160;days
    through the exercise of any stock option, warrant or other
    right. If two or more persons share voting power or investment
    power with respect to specific securities, each such person is
    deemed to be the beneficial owner of such securities. Except as
    we otherwise indicate below and under applicable community
    property laws, we believe that the beneficial owners of the
    common stock listed below, based on information they have
    furnished to us, have sole voting and investment power with
    respect to the shares shown. Unless otherwise noted below, the
    address for each holder listed below is
    3300&#160;W.&#160;Camelback Road, Phoenix, Arizona 85017.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The calculations of beneficial ownership in this table are based
    on 44,576,417&#160;shares outstanding at June&#160;30, 2009 and
    assumes the termination of the voting agreement described above
    under &#147;Certain Relationships and Related
    Transactions&#160;&#151; Voting Agreement&#148; in connection
    with this offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="65%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="15%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="11%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Common Stock</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Amount and Nature of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Beneficial Ownership</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Percent of
    Class<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Principal Stockholders:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Endeavour Capital Fund&#160;IV, L.P. and
    affiliates<SUP style="font-size: 85%; vertical-align: top">(2)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,012,138
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22.5
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Luke M. Buse and Staci Lin Buse Revocable
    Trust<SUP style="font-size: 85%; vertical-align: top">(3)(8)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,503,171
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.9
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Directors and Named Executive Officers:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Brent D.
    Richardson<SUP style="font-size: 85%; vertical-align: top">(4)(8)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,503,171
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.9
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Brian E. Mueller
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    109,329
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Christopher C.
    Richardson<SUP style="font-size: 85%; vertical-align: top">(5)(8)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,504,036
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.9
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Daniel E. Bachus
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Dr.&#160;W. Stan Meyer
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Michael S.
    Lacrosse<SUP style="font-size: 85%; vertical-align: top">(6)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30,603
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Dr.&#160;Kathy
    Player<SUP style="font-size: 85%; vertical-align: top">(6)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30,463
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Chad N.
    Heath<SUP style="font-size: 85%; vertical-align: top">(7)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,012,138
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22.5
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    D. Mark
    Dorman<SUP style="font-size: 85%; vertical-align: top">(7)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,012,138
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22.5
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    David J. Johnson
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11,298
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jack A. Henry
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,748
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>All directors and executive officers as a group
    (11&#160;persons)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,220,286
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38.6
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    *&#160;</TD>
    <TD></TD>
    <TD valign="bottom">
    Represents beneficial ownership of less than 1%</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    The percentage of beneficial ownership as to any person as of a
    particular date is calculated by dividing the number of shares
    beneficially owned by such person, which includes the number of
    shares as to which such person has the right to acquire voting
    or investment power within 60&#160;days after such date, by the
    sum of the number of shares outstanding as of such date plus the
    number of shares as to which such person has </TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    64
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    the right to acquire voting or investment power within
    60&#160;days after such date. Consequently, the denominator for
    calculating beneficial ownership percentages may be different
    for each beneficial owner.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Endeavour Capital IV, LLC is the general partner of the
    Endeavour Entities, and has voting and dispositive power with
    respect to the shares held by the Endeavour Entities.
    Messrs.&#160;Chad N. Heath and D. Mark Dorman, each of whom is a
    managing director of Endeavour Capital IV, LLC and serves on our
    Board of Directors, disclaim beneficial ownership of these
    shares except to the extent of their respective pecuniary
    interests. The address for these entities is 920 SW Sixth
    Avenue, Suite&#160;1400, Portland, Oregon 97204.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Luke M. Buse and Staci Lin Buse, as co-trustees, share voting
    and dispositive power with respect to the shares owned by of the
    Luke M. Buse and Staci Lin Buse Revocable Trust. Staci Lin Buse
    is the sister of Brent D. Richardson, our Executive Chairman,
    and Christopher C. Richardson, our General Counsel and director.
    The address for this trust is 6236&#160;E.&#160;Montecito
    Avenue, Scottsdale, Arizona 85251.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents shares held of record by Exeter Capital, LLC, a
    limited liability company of which Brent D. Richardson, our
    Executive Chairman and a member of our Board of Directors, is
    the manager. Mr.&#160;Richardson has sole voting and dispositive
    power with respect to the shares held by Exeter Capital, LLC.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents shares held by Calle Camilia Investments, LLC, a
    limited liability company of which Christopher C. Richardson,
    our General Counsel and a member of our Board of Directors, is a
    manager. Mr.&#160;Richardson shares voting and dispositive power
    with respect to the shares held by Calle Camilia Investments,
    LLC with his wife and a family trust.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (6) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes 29,463&#160;shares of common stock issuable upon
    exercise of vested stock options.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (7) </TD>
    <TD></TD>
    <TD valign="bottom">
    Consists of 10,012,138&#160;shares of common stock held of
    record by the Endeavour Entities (see note (2)&#160;above).
    Messrs.&#160;Chad N. Heath and D. Mark Dorman, each of whom is a
    managing member of Endeavour Capital IV, LLC, the general
    partner of the Endeavour Entities, and serves on our Board of
    Directors, disclaim beneficial ownership of these shares except
    to the extent of their respective pecuniary interests.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (8) </TD>
    <TD></TD>
    <TD valign="bottom">
    In connection with our initial public offering, certain of our
    stockholders entered into a proxy and voting agreement, pursuant
    to which such persons granted to the Richardson Voting Group, a
    five-year irrevocable proxy to exercise voting authority with
    respect to certain shares of our common stock held by such
    persons, for so long as such shares are held by such persons.
    Upon the completion of our initial public offering, as a result
    of the proxy and voting agreement, the Richardson Voting Group
    had the power to exercise voting authority with respect to
    19,516,242&#160;shares of our common stock, or 42.9% of our
    common stock at such time.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Under the terms of the voting agreement, if any person party to
    the voting agreement transfers shares covered by the proxy in
    open-market or other transactions, the proxy is no longer
    effective as to such shares. Accordingly, the number of shares
    as to which the Richardson Voting Group has the shared power to
    vote or direct the vote will decrease over time as shares held
    by other parties to the voting agreement are sold, which sales
    we may not be aware of since many of the shares held by such
    other parties are held in &#147;street name.&#148; Based on
    information available to us, we believe that, as of
    July&#160;31, 2009, the Richardson Voting Group had the power to
    exercise voting authority with respect to approximately
    17.0&#160;million shares of our common stock, or approximately
    38% of our common stock. After giving effect to this offering,
    and based on the number of shares expected to be sold by us and
    the selling stockholders participating in this offering, we
    believe that the Richardson Voting Group will continue to have
    the power to exercise voting authority with respect to more than
    25% of our common stock. See &#147;Certain Relationships and
    Related Transactions&#160;&#151; Voting Agreement.&#148;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    65
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='111'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SELLING
    STOCKHOLDERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth information with respect to the
    number of shares of common stock beneficially owned by the
    selling stockholders named below and as adjusted to give effect
    to the sale of the shares offered hereby. The following table is
    prepared based on information supplied to us by the selling
    stockholders. The information in the following table has been
    presented in accordance with the rules of the SEC. Under SEC
    rules, beneficial ownership of a class of capital stock includes
    any shares of such class as to which a person, directly or
    indirectly, has or shares voting power or investment power and
    also any shares as to which a person has the right to acquire
    such voting or investment power within 60&#160;days through the
    exercise of any stock option, warrant or other right. If two or
    more persons share voting power or investment power with respect
    to specific securities, each such person is deemed to be the
    beneficial owner of such securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="43%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=08 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=08 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=08 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=08 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=09 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=09 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=09 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=09 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Over-<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Shares Beneficially<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>allotment<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Shares Beneficially Owned<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Owned After to the<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Prior to the Offering</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Being<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Offering</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Being<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares Beneficially After the
    Over-allotment<SUP style="font-size: 85%; vertical-align: top">(3)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Percent<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Offered</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Percent<SUP style="font-size: 85%; vertical-align: top">(2)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Offered<SUP style="font-size: 85%; vertical-align: top">(3)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Shares</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Percent<SUP style="font-size: 85%; vertical-align: top">(2)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    <B>Stockholders</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Endeavor Associates Fund&#160;IV, L.P. and
    affiliates<SUP style="font-size: 85%; vertical-align: top">(4)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,012,138
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22.5
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Brent D.
    Richardson<SUP style="font-size: 85%; vertical-align: top">(5)(8)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,503,171
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.9
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Christopher C.
    Richardson<SUP style="font-size: 85%; vertical-align: top">(6)(8)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,504,036
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.9
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Luke M. Buse and Staci Lin Buse Revocable
    Trust<SUP style="font-size: 85%; vertical-align: top">(7)(8)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,503,171
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.9
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Other Selling Stockholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    <B>Total</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    *&#160;</TD>
    <TD></TD>
    <TD valign="bottom">
    Less than 1.0%</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based on 44,576,417&#160;shares outstanding at June&#160;30,
    2009.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based on 45,576,417&#160;shares outstanding, which reflects
    shares outstanding at June&#160;30, 2009 plus
    1,000,000&#160;shares issued by the Company in connection with
    this offering.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Amounts presented assume that the over-allotment option is
    exercised in full.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Messrs.&#160;Chad N. Heath and D. Mark Dorman, each of whom
    serves on our Board of Directors, are managing members of
    Endeavour Capital IV, LLC, the general partner of the Endeavour
    Entities. Endeavour Capital IV, LLC has voting and dispositive
    power with respect to the shares of the Endeavour Entities.
    Messrs.&#160;Chad N. Heath and D. Mark Dorman disclaim
    beneficial ownership of these shares except to the extent of
    their respective pecuniary interests therein. See &#147;Certain
    Relationships and Related Transactions&#148; for information
    regarding a professional services agreement we were previously a
    party to with Endeavour Capital IV, LLC.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents shares held of record by Exeter Capital, LLC, a
    limited liability company of which Brent D. Richardson, our
    Executive Chairman and a member of our Board of Directors, is
    the manager. Mr.&#160;Richardson has sole voting and dispositive
    power with respect to the shares held by Exeter Capital, LLC.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (6) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents shares held by Calle Camilia Investments, LLC, a
    limited liability company of which Christopher C. Richardson,
    our General Counsel and a member of our Board of Directors, is a
    manager. Mr.&#160;Richardson shares voting and dispositive power
    with respect to the shares held by Calle Camilia Investments,
    LLC with his wife and a family trust.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (7) </TD>
    <TD></TD>
    <TD valign="bottom">
    Staci L. Buse, the sister of Brent D. Richardson and Christopher
    C. Richardson, and Luke M. Buse, the
    <FONT style="white-space: nowrap">brother-in-law</FONT>
    of Brent D. Richardson and Christopher C. Richardson, are
    co-trustees of this selling stockholder, and each shares voting
    and dispositive power with respect to the shares of this selling
    stockholder.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    66
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (8) </TD>
    <TD></TD>
    <TD valign="bottom">
    In connection with our initial public offering, certain of our
    stockholders entered into a proxy and voting agreement, pursuant
    to which such persons granted to the Richardson Voting Group a
    five-year irrevocable proxy to exercise voting authority with
    respect to certain shares of our common stock held by such
    persons, for so long as such shares are held by such persons.
    Upon the completion of our initial public offering, as a result
    of the proxy and voting agreement, the Richardson Voting Group
    had the power to exercise voting authority with respect to
    19,516,242&#160;shares of our common stock, or 42.9% of our
    common stock at such time.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Under the terms of the voting agreement, if any person party to
    the voting agreement transfers shares covered by the proxy in
    open-market or other transactions, the proxy is no longer
    effective as to such shares. Accordingly, the number of shares
    as to which the Richardson Voting Group has the shared power to
    vote or direct the vote will decrease over time as shares held
    by other parties to the voting agreement are sold, which sales
    we may not be aware of since many of the shares held by such
    other parties are held in &#147;street name.&#148; Based on
    information available to us, we believe that, as of
    July&#160;31, 2009, the Richardson Voting Group had the power to
    exercise voting authority with respect to approximately
    17.0&#160;million shares of our common stock, or approximately
    38% of our common stock. After giving effect to this offering,
    and based on the number of shares expected to be sold by us and
    the selling stockholders participating in this offering, we
    believe that the Richardson Voting Group will continue to have
    the power to exercise voting authority with respect to more than
    25% of our common stock. See &#147;Certain Relationships and
    Related Transactions&#160;&#151; Voting Agreement.&#148;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    67
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='112'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DESCRIPTION
    OF CAPITAL STOCK</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following description of our capital stock summarizes
    provisions of our amended and restated certificate of
    incorporation and amended and restated bylaws. As of the date of
    this prospectus, our authorized capital stock consists of
    100,000,000&#160;shares of common stock, $0.01&#160;par value
    per share, and 10,000,000&#160;shares of undesignated preferred
    stock, $0.01&#160;par value per share. Immediately after
    completion of the offering, 45,576,417&#160;shares of common
    stock and no shares of preferred stock will be outstanding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following description of the material provisions of our
    capital stock and amended and restated certificate of
    incorporation and amended and restated bylaws is only a summary,
    does not purport to be complete and is qualified by applicable
    law and the full provisions of our amended and restated
    certificate of incorporation and amended and restated bylaws.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Common
    Stock</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Voting Rights.</I>&#160;&#160;Holders of common stock are
    entitled to one vote per share on any matter to be voted upon by
    stockholders. All shares of common stock rank equally as to
    voting and all other matters. The shares of common stock have no
    preemptive or conversion rights, no redemption or sinking fund
    provisions, are not liable for further call or assessment and
    are not entitled to cumulative voting rights.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Dividend Rights.</I>&#160;&#160;Subject to the prior rights
    of holders of preferred stock, for as long as such stock is
    outstanding, the holders of common stock are entitled to receive
    ratably any dividends when and as declared from time to time by
    our Board of Directors out of funds legally available for
    dividends. We have never declared or paid cash dividends. We
    currently intend to retain all future earnings for the operation
    and expansion of our business and do not anticipate paying cash
    dividends on the common stock in the foreseeable future.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Liquidation Rights.</I>&#160;&#160;Upon a liquidation or
    dissolution of our company, whether voluntary or involuntary,
    creditors and holders of our preferred stock with preferential
    liquidation rights will be paid before any distribution to
    holders of our common stock. After such distribution, holders of
    common stock are entitled to receive a pro rata distribution per
    share of any excess amount.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Undesignated
    Preferred Stock</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under our amended and restated certificate of incorporation, our
    Board of Directors has authority to issue undesignated preferred
    stock without stockholder approval. Our Board of Directors may
    also determine or alter for each class of preferred stock the
    voting powers, designations, preferences, and special rights,
    qualifications, limitations, or restrictions as permitted by
    law. Our Board of Directors may authorize the issuance of
    preferred stock with voting or conversion rights that could
    adversely affect the voting power or other rights of the holders
    of the common stock. Issuing preferred stock provides
    flexibility in connection with possible acquisitions and other
    corporate purposes, but could also, among other things, have the
    effect of delaying, deferring or preventing a change in control
    of our company and may adversely affect the market price of our
    common stock and the voting and other rights of the holders of
    common stock.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Registration
    Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a party to an amended investor rights agreement with the
    Endeavour Entities and certain other parties pursuant to which
    we agreed, under certain circumstances, to register shares of
    common stock held by each of the parties to the agreement under
    the Securities Act. The registration rights provisions of the
    investor rights agreement grant to the Endeavour Entities the
    right, beginning 90&#160;days following the completion of our
    initial public offering, to cause us, at our expense, to use our
    reasonable commercial efforts to register such securities held
    by the Endeavour Entities for public resale, subject to certain
    limitations. The exercise of this right will be limited to two
    requests. In the event that we register any of our common stock
    following completion of this offering, the Endeavour Entities
    and certain other holders are entitled to &#147;piggyback&#148;
    registration rights in which they may require us to include
    their securities in future registration statements that we may
    file, either for our own account or for the account of other
    security holders exercising registration
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    68
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    rights. In addition, such holders have the right to request that
    their shares of common stock be registered on a Registration
    Statement on
    <FONT style="white-space: nowrap">Form&#160;S-3</FONT>
    so long as the anticipated aggregate sales price of such
    registered securities as of the date of filing of the
    Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-3</FONT>
    is at least $1&#160;million. These registration rights are
    subject to various conditions and limitations, including the
    right of the underwriters of an offering to limit the number of
    registrable securities that may be included in the offering. We
    are generally required to bear all of the expenses of these
    registrations, except underwriting discounts and selling
    commissions and transfer taxes, if any. Registration of any
    securities pursuant to these registration rights will result in
    shares becoming freely tradable without restriction under the
    Securities Act immediately upon effectiveness of such
    registration.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Provisions
    of Delaware Law and our Charter and Bylaws with Anti-Takeover
    Implications</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Charter
    and Bylaw Provisions</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our amended and restated certificate of incorporation and
    amended and restated bylaws include a number of provisions that
    may have the effect of encouraging persons considering
    unsolicited tender offers or other unilateral takeover proposals
    to negotiate with our Board of Directors rather than pursue
    non-negotiated takeover attempts. These provisions include the
    items described below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Board Composition and Filling Vacancies.</I>&#160;&#160;Our
    bylaws provide that directors may be removed only for cause by
    the affirmative vote of the holders of a majority of the voting
    power of all the outstanding shares of capital stock entitled to
    vote generally in the election of directors voting together as a
    single class. Furthermore, any vacancy on our Board of
    Directors, however occurring, including a vacancy resulting from
    an increase in the size of our board, may only be filled by the
    affirmative vote of a majority of our directors then in office
    even if less than a quorum.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>No Written Consent of Stockholders.</I>&#160;&#160;Our
    charter provides that all stockholder actions are required to be
    taken by a vote of the stockholders at an annual or special
    meeting, and that stockholders may not take any action by
    written consent in lieu of a meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Meetings of Stockholders.</I>&#160;&#160;Our bylaws provide
    that only a majority of the members of our Board of Directors
    then in office may call special meetings of stockholders and
    only those matters set forth in the notice of the special
    meeting may be considered or acted upon at a special meeting of
    stockholders. Our bylaws limit the business that may be
    conducted at an annual meeting of stockholders to those matters
    properly brought before the meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Advance Notice Requirements.</I>&#160;&#160;Our bylaws
    establish advance notice procedures with regard to stockholder
    proposals relating to the nomination of candidates for election
    as directors or new business to be brought before meetings of
    our stockholders. These procedures provide that notice of
    stockholder proposals must be timely given in writing to our
    corporate secretary prior to the meeting at which the action is
    to be taken. Generally, to be timely, notice must be received at
    our principal executive offices not earlier than the close of
    business on the 120th&#160;day, nor later than the close of
    business on the 90th&#160;day, prior to the first anniversary
    date of the annual meeting for the preceding year. The notice
    must contain certain information specified in the bylaws.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Amendment to Bylaws and Charter.</I>&#160;&#160;As required
    by the DGCL, any amendment of our charter must first be approved
    by a majority of our Board of Directors and, if required by law
    or our charter, thereafter be approved by a majority of the
    outstanding shares entitled to vote on the amendment, and a
    majority of the outstanding shares of each class entitled to
    vote thereon as a class, except that the amendment of the
    provisions relating to stockholder action, directors, limitation
    of liability and the amendment of our bylaws and certificate of
    incorporation must be approved by no less than
    66<FONT style="vertical-align: text-top; font-size: 70%;">2</FONT>/<FONT style="font-size: 70%;">3</FONT>&#160;percent
    of the voting power of all of the shares of capital stock issued
    and outstanding and entitled to vote generally in any election
    of directors, voting together as a single class. Our bylaws may
    be amended by the affirmative vote of a majority vote of the
    directors then in office, subject to any limitations set forth
    in the bylaws; and may also be amended by the affirmative vote
    of at least
    66<FONT style="vertical-align: text-top; font-size: 70%;">2</FONT>/<FONT style="font-size: 70%;">3</FONT>&#160;percent
    of the voting power of all of the shares of capital stock issued
    and outstanding and entitled to vote generally in any election
    of directors, voting together as a single class.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    69
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Blank Check Preferred Stock.</I>&#160;&#160;Our charter
    provides for 10,000,000 authorized shares of preferred stock.
    The existence of authorized but unissued shares of preferred
    stock may enable our Board of Directors to render more difficult
    or to discourage an attempt to obtain control of us by means of
    a merger, tender offer, proxy contest, or otherwise. For
    example, if in the due exercise of its fiduciary obligations,
    our Board of Directors were to determine that a takeover
    proposal is not in the best interests of us or our stockholders,
    our Board of Directors could cause shares of preferred stock to
    be issued without stockholder approval in one or more private
    offerings or other transactions that might dilute the voting or
    other rights of the proposed acquirer or insurgent stockholder
    or stockholder group. In this regard, our certificate of
    incorporation grants our Board of Directors broad power to
    establish the rights and preferences of authorized and unissued
    shares of preferred stock. The issuance of shares of preferred
    stock could decrease the amount of earnings and assets available
    for distribution to holders of shares of common stock. The
    issuance may also adversely affect the rights and powers,
    including voting rights, of these holders and may have the
    effect of delaying, deterring, or preventing a change in control
    of us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Section&#160;203
    of the Delaware General Corporate Law</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are subject to the provisions of Section&#160;203 of the
    DGCL. In general, Section&#160;203 prohibits a publicly held
    Delaware corporation from engaging in a &#147;business
    combination&#148; with an &#147;interested stockholder&#148; for
    a three-year period following the time that this stockholder
    becomes an interested stockholder, unless the business
    combination is approved in a prescribed manner. A &#147;business
    combination&#148; includes, among other things, a merger, asset
    or stock sale, or other transaction resulting in a financial
    benefit to the interested stockholder. An &#147;interested
    stockholder&#148; is a person who, together with affiliates and
    associates, owns, or did own within three years prior to the
    determination of interested stockholder status, 15% or more of
    the corporation&#146;s voting stock. Under Section&#160;203, a
    business combination between a corporation and an interested
    stockholder is prohibited unless it satisfies one of the
    following conditions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    before the stockholder became interested, the board of directors
    approved either the business combination or the transaction
    which resulted in the stockholder becoming an interested
    stockholder;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    upon consummation of the transaction which resulted in the
    stockholder becoming an interested stockholder, the interested
    stockholder owned at least 85% of the voting stock of the
    corporation outstanding at the time the transaction commenced,
    excluding for purposes of determining the voting stock
    outstanding, shares owned by persons who are directors and also
    officers, and employee stock plans, in some instances;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    at or after the time the stockholder became interested, the
    business combination was approved by the board of directors of
    the corporation and authorized at an annual or special meeting
    of the stockholders by the affirmative vote of at least
    two-thirds of the outstanding voting stock which is not owned by
    the interested stockholder.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Limitations
    of Director Liability and Indemnification Directors, Officers
    and Employees</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As permitted by the DGCL, provisions in our charter and bylaws
    limit or eliminate the personal liability of our directors.
    Consequently, directors will not be personally liable to us or
    our stockholders for monetary damages or breach of fiduciary
    duty as a director, except for liability for:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any breach of the director&#146;s duty of loyalty to us or our
    stockholders;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any act or omission not in good faith or that involves
    intentional misconduct or a knowing violation of law;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any unlawful payments related to dividends or unlawful stock
    repurchases, redemptions or other distributions;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any transaction from which the director derived an improper
    personal benefit.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    70
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These limitations of liability do not alter director liability
    under the federal securities laws and do not affect the
    availability of equitable remedies, such as an injunction or
    rescission.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, our bylaws provide that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we will indemnify our directors, officers and, in the discretion
    of our Board of Directors, certain employees, to the fullest
    extent permitted by the DGCL, subject to limited exceptions,
    including an exception for indemnification in connection with a
    proceeding (or counterclaim) initiated by such persons;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we will advance expenses, including attorneys&#146; fees, to our
    directors and, in the discretion of our Board of Directors,
    certain officers and employees, in connection with legal
    proceedings, subject to limited exceptions.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have entered into indemnification agreements with each of our
    executive officers and directors. These agreements provide that,
    subject to limited exceptions and among other things, we will
    indemnify each of our executive officers and directors to the
    fullest extent permitted by law and advance expenses to each
    indemnitee in connection with any proceeding in which a right to
    indemnification is available.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We maintain general liability insurance that covers certain
    liabilities of our directors and officers arising out of claims
    based on acts or omissions in their capacities as directors or
    officers, including liabilities under the Securities Act.
    Insofar as indemnification for liabilities arising under the
    Securities Act may be permitted to directors, officers, or
    persons who control Grand Canyon Education, we have been
    informed that in the opinion of the SEC such indemnification is
    against public policy as expressed in the Securities Act and is
    therefore unenforceable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These provisions may discourage stockholders from bringing a
    lawsuit against our directors for breach of their fiduciary
    duty. These provisions may also have the effect of reducing the
    likelihood of derivative litigation against directors and
    officers, even though such an action, if successful, might
    otherwise benefit us and our stockholders. Furthermore, a
    stockholder&#146;s investment may be adversely affected to the
    extent we pay the costs of settlement and damage awards against
    directors and officers pursuant to these indemnification
    provisions. We believe that these provisions, the
    indemnification agreements and the insurance are necessary to
    attract and retain talented and experienced directors and
    officers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At present, there is no pending litigation or proceeding
    involving any of our directors or officers where indemnification
    will be required or permitted. We are not aware of any
    threatened litigation or proceeding that might result in a claim
    for such indemnification.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Nasdaq</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common stock is listed on the Nasdaq Global Market under the
    symbol &#147;LOPE.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    Agent and Registrar</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The transfer agent and registrar for our common stock is
    Computershare Trust&#160;Company, N.A.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    71
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='113'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MATERIAL
    U.S. FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS<BR>
    FOR <FONT style="white-space: nowrap">NON-U.S.</FONT>
    HOLDERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a general discussion of the material
    U.S.&#160;federal income and estate tax consequences to
    <FONT style="white-space: nowrap">non-U.S.&#160;Holders</FONT>
    with respect to the acquisition, ownership and disposition of
    our common stock. In general, a
    <FONT style="white-space: nowrap">&#147;Non-U.S.&#160;Holder&#148;</FONT>
    is any holder of our common stock other than the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a citizen or resident of the United States, including an alien
    individual who is a lawful permanent resident of the United
    States or meets the &#147;substantial presence&#148; test under
    section&#160;7701(b)(3) of the Internal Revenue Code of 1986, as
    amended, or the Code;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a corporation (or an entity treated as a corporation) created or
    organized in the United States or under the laws of the United
    States, any state thereof, or the District of Columbia;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an estate, the income of which is subject to U.S.&#160;federal
    income tax regardless of its source;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a trust, if (i)&#160;a U.S.&#160;court can exercise primary
    supervision over the administration of the trust and one or more
    U.S.&#160;persons can control all substantial decisions of the
    trust, or (ii)&#160;it has a valid election to be treated as a
    U.S.&#160;person in effect.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This discussion is based on current provisions of the Code,
    Treasury Regulations promulgated under the Code, judicial
    opinions, published positions of the Internal Revenue Service,
    or IRS, and all other applicable authorities, all of which are
    subject to change, possibly with retroactive effect. This
    discussion does not address all aspects of U.S.&#160;federal
    income and estate taxation or any aspects of state, local, or
    <FONT style="white-space: nowrap">non-U.S.&#160;taxation,</FONT>
    nor does it consider any specific facts or circumstances that
    may apply to particular
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holders</FONT>
    that may be subject to special treatment under the
    U.S.&#160;federal income tax laws, such as insurance companies,
    tax-exempt organizations, financial institutions, brokers,
    dealers in securities, and U.S.&#160;expatriates. If a
    partnership is a beneficial owner of our common stock, the
    treatment of a partner in the partnership will generally depend
    upon the status of the partner and the activities of the
    partnership. This discussion assumes that the
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    will hold our common stock as a capital asset, generally
    property held for investment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS
    REGARDING THE U.S.&#160;FEDERAL, STATE, LOCAL, AND
    <FONT style="white-space: nowrap">NON-U.S.&#160;INCOME</FONT>
    AND OTHER TAX CONSIDERATIONS OF ACQUIRING, HOLDING, AND
    DISPOSING OF SHARES&#160;OF COMMON STOCK.</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Dividends</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As described above under &#147;Dividend Policy,&#148; we do not
    anticipate declaring or paying any cash dividends on our common
    stock in the foreseeable future. However, if we do make
    distributions on our common stock, those payments will
    constitute dividends for U.S.&#160;tax purposes to the extent
    paid from our current and accumulated earnings and profits, as
    determined under U.S.&#160;federal income tax principles. To the
    extent those distributions exceed our current and accumulated
    earnings and profits, they will constitute a return of capital
    and will first reduce the recipient&#146;s basis in our common
    stock, but not below zero, and then will be treated as gain from
    the sale of stock as described below under
    &#147;&#151;&#160;Gain on Sale or Other Disposition of Common
    Stock.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, dividends paid to a
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    will be subject to U.S.&#160;withholding tax at a rate equal to
    30% of the gross amount of the dividend, or a lower rate
    prescribed by an applicable income tax treaty, unless the
    dividends are effectively connected with a trade or business
    carried on by the
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    within the United States. Under applicable Treasury Regulations,
    a
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    will be required to satisfy certain certification requirements,
    generally on IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN,</FONT>
    directly or through an intermediary, in order to claim a reduced
    rate of withholding under an applicable income tax treaty. If
    tax is withheld in an amount in excess of the amount prescribed
    by an applicable income tax treaty, a refund of the excess
    amount may generally be obtained by filing an appropriate claim
    for refund with the IRS.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    72
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dividends that are effectively connected with such a
    U.S.&#160;trade or business (and where a tax treaty applies, are
    attributable to a U.S.&#160;permanent establishment maintained
    by the recipient) generally will not be subject to
    U.S.&#160;withholding tax if the
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    files the required forms, including IRS
    <FONT style="white-space: nowrap">Form&#160;W-8ECI,</FONT>
    or any successor form, with the payor of the dividend, but
    instead generally will be subject to U.S.&#160;federal income
    tax on a net income basis in the same manner as if the
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    were a resident of the United&#160;States. A corporate
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    that receives effectively connected dividends may be subject to
    an additional branch profits tax at a rate of 30%, or a lower
    rate prescribed by an applicable income tax treaty, with respect
    to effectively connected dividends (subject to adjustment).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Gain on
    Sale or Other Disposition of Common Stock</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, a
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    will not be subject to U.S.&#160;federal income tax on any gain
    realized upon the sale or other taxable disposition of the
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder&#146;s</FONT>
    shares of common stock unless:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the gain is effectively connected with a trade or business
    carried on by the
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    within the United States;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    is an individual who holds shares of common stock as capital
    assets and is present in the United States for 183&#160;days or
    more in the taxable year of disposition and various other
    conditions are met;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our common stock constitutes a U.S.&#160;real property interest
    by reason of our status as a &#147;United&#160;States real
    property holding corporation,&#148; or USRPHC, for
    U.S.&#160;federal income tax purposes at any time within the
    shorter of the five-year period preceding the disposition or the
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder&#146;s</FONT>
    holding period for our common stock.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the recipient is a
    <FONT style="white-space: nowrap">non-United</FONT>
    States holder described in the first bullet above, the recipient
    will be required to pay tax on the net gain derived from the
    sale under regular graduated U.S.&#160;federal income tax rates,
    and corporate
    <FONT style="white-space: nowrap">non-United</FONT>
    States holders described in the first bullet above may be
    subject to the branch profits tax at a 30% rate or such lower
    rate as may be specified by an applicable income tax treaty. If
    the recipient is an individual
    <FONT style="white-space: nowrap">non-United</FONT>
    States holder described in the second bullet above, the
    recipient will be required to pay a flat 30% tax on the gain
    derived from the sale, which tax may be offset by United States
    source capital losses.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that we are not currently and will not become a
    USRPHC. However, because the determination of whether we are a
    USRPHC depends on the fair market value of our U.S.&#160;real
    property relative to the fair market value of our other business
    assets, there can be no assurance that we will not become a
    USRPHC in the future. Even if we become a USRPHC, however, as
    long as our common stock is regularly traded on an established
    securities market, such common stock will be treated as
    U.S.&#160;real property interests only if the
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    actually or constructively held more than 5% of our common stock
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Information
    Reporting and Backup Withholding</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally, we must report annually to the IRS the amount of
    dividends paid, the name and address of the recipient, and the
    amount, if any, of tax withheld. A similar report is sent to the
    recipient. These information reporting requirements apply even
    if withholding was not required because the dividends were
    effectively connected dividends or withholding was reduced by an
    applicable income tax treaty. Under tax treaties or other
    agreements, the IRS may make its reports available to tax
    authorities in the recipient&#146;s country of residence.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Payments made to a
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    that is not an exempt recipient generally will be subject to
    backup withholding, currently at a rate of 28%, unless a
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    certifies as to its foreign status, which certification may be
    made on IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Proceeds from the disposition of common stock by a
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    effected by or through a United&#160;States office of a broker
    will be subject to information reporting and backup withholding,
    currently at a rate of 28% of the gross proceeds, unless the
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    certifies to the payor under penalties of perjury
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    73
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    as to, among other things, its address and status as a
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    or otherwise establishes an exemption. Generally, United States
    information reporting and backup withholding will not apply to a
    payment of disposition proceeds if the transaction is effected
    outside the United States by or through a
    <FONT style="white-space: nowrap">non-U.S.&#160;office</FONT>
    of a broker. However, if the broker is, for U.S.&#160;federal
    income tax purposes, a U.S.&#160;person, a controlled foreign
    corporation, a foreign person who derives 50% or more of its
    gross income for specified periods from the conduct of a
    U.S.&#160;trade or business, specified U.S.&#160;branches of
    foreign banks or insurance companies or a foreign partnership
    with certain connections to the United States, information
    reporting but not backup withholding will apply unless:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the broker has documentary evidence in its files that the holder
    is a
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holder</FONT>
    and other conditions are met;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the holder otherwise establishes an exemption.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Backup withholding is not an additional tax. Rather, the amount
    of tax withheld is applied to the U.S.&#160;federal income tax
    liability of persons subject to backup withholding. If backup
    withholding results in an overpayment of U.S.&#160;federal
    income taxes, a refund may be obtained, provided the required
    documents are filed with the IRS.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Estate
    Tax</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common stock owned or treated as owned by an individual who
    is not a citizen or resident of the United States (as
    specifically defined for U.S.&#160;federal estate tax purposes)
    at the time of death will be includible in the individual&#146;s
    gross estate for U.S.&#160;federal estate tax purposes, unless
    an applicable estate tax treaty provides otherwise.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    74
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='114'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNDERWRITING</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the terms and subject to the conditions contained in an
    underwriting agreement
    dated&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2009, we and the selling stockholders have agreed to sell to the
    underwriters named below, for whom Credit Suisse Securities
    (USA) LLC and Merrill Lynch, Pierce, Fenner&#160;&#038; Smith
    Incorporated are acting as representatives, the following
    respective numbers of shares of common stock:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="83%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="13%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Underwriter</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Number of Shares</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Credit Suisse Securities (USA) LLC
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Merrill Lynch, Pierce, Fenner&#160;&#038; Smith<BR>
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Incorporated
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    BMO Capital Markets Corp.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    William Blair&#160;&#038; Company, L.L.C.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Piper Jaffray&#160;&#038; Co.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Barrington Research Associates, Inc.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriting agreement provides that the underwriters are
    obligated to purchase all the shares of common stock in the
    offering if any are purchased, other than those shares covered
    by the over-allotment option described below. The underwriting
    agreement also provides that if an underwriter defaults, the
    purchase commitments of non-defaulting underwriters may be
    increased or the offering may be terminated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain of the selling stockholders have granted to the
    underwriters a
    <FONT style="white-space: nowrap">30-day</FONT>
    option to purchase on a pro rata basis up to an aggregate
    of&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    additional outstanding shares from such selling stockholders at
    the public offering price less the underwriting discounts and
    commissions. The option may be exercised only to cover any
    over-allotments of common stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters propose to offer the shares of common stock
    initially at the public offering price on the cover page of this
    prospectus and to selling group members at that price less a
    selling concession of $&#160;&#160;&#160;&#160;&#160; per share.
    Thereafter, the representative may change the public offering
    price and concession.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table summarizes the compensation and estimated
    expenses we and the selling stockholders will pay:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="51%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Per Share</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Without<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>With<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Without<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>With<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Over-allotment</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Over-allotment</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Over-allotment</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Over-allotment</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Underwriting discounts and commissions paid by us
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Expenses payable by us
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Underwriting discounts and commissions paid by the selling
    stockholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Expenses payable by the selling stockholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We, our directors and executive officers, and the selling
    stockholders have agreed that we and they will not offer, sell,
    contract to sell, pledge, or otherwise dispose of, directly or
    indirectly, or file with the SEC a registration statement under
    the Securities Act relating to, any shares of our common stock
    or securities convertible into or exchangeable or exercisable
    for any shares of our common stock, enter into a transaction
    that would have the same effect, or enter into any swap, hedge,
    or other arrangement that transfers, in whole or in part, any of
    the economic consequences of ownership of our common stock,
    whether any of these transactions is to be settled by delivery
    of our common stock or other securities, in cash or otherwise,
    or publicly disclose the intention to make any offer, sale,
    pledge, disposition, or filing, or to enter into any
    transaction, swap, hedge, or other arrangement, without, in each
    case, the prior written consent of Credit Suisse Securities
    (USA) LLC and Merrill Lynch, Pierce, Fenner&#160;&#038; Smith
    Incorporated, for a period of 90&#160;days after the date of
    this prospectus. However, in the event that either
    (1)&#160;during the last 17&#160;days of the
    <FONT style="white-space: nowrap">&#147;lock-up&#148;</FONT>
    period, we release earnings results or material news or a
    material event relating to us occurs or (2)&#160;prior to the
    expiration of the
    <FONT style="white-space: nowrap">&#147;lock-up&#148;</FONT>
    period, we announce that we will release earnings results during
    the <FONT style="white-space: nowrap">16-day</FONT>
    period
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    75
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    beginning on the last day of the
    <FONT style="white-space: nowrap">&#147;lock-up&#148;</FONT>
    period, then in either case the expiration of the
    <FONT style="white-space: nowrap">&#147;lock-up&#148;</FONT>
    will be extended until the expiration of the
    <FONT style="white-space: nowrap">18-day</FONT>
    period beginning on the date of the release of the earnings
    results or the occurrence of the material news or event, as
    applicable, unless Credit Suisse Securities (USA) LLC and
    Merrill Lynch, Pierce, Fenner&#160;&#038; Smith Incorporated
    waive such extension in writing. The restrictions described in
    this paragraph do not apply to, among other things, the sale of
    shares to the underwriters, transactions by any person other
    than us relating to shares of common stock or other securities
    acquired in open-market transactions after the completion of the
    offering of shares or the offer, sale, issuance, or disposal by
    us of any of our securities, or any securities convertible into
    or exchangeable or exercisable for any of our securities,
    pursuant to our equity compensation plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We and the selling stockholders have agreed to indemnify the
    underwriters against liabilities under the Securities Act, or
    contribute to payments that the underwriters may be required to
    make in that respect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain of the underwriters and their respective affiliates have
    from time to time performed, and may in the future perform,
    various financial advisory, commercial banking, and investment
    banking services for us and our affiliates in the ordinary
    course of business, for which they received, or will receive,
    customary fees and expenses. An affiliate of Merrill Lynch,
    Pierce, Fenner&#160;&#038; Smith Incorporated has also acted as
    lender under our term loan due 2014.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with the offering the underwriters may engage in
    stabilizing transactions, over-allotment transactions, syndicate
    covering transactions and penalty bids in accordance with
    Regulation&#160;M under the Exchange Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Stabilizing transactions permit bids to purchase the underlying
    security so long as the stabilizing bids do not exceed a
    specified maximum.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Over-allotment involves sales by the underwriters of shares in
    excess of the number of shares the underwriters are obligated to
    purchase, which creates a syndicate short position. The short
    position may be either a covered short position or a naked short
    position. In a covered short position, the number of shares
    over-allotted by the underwriters is not greater than the number
    of shares that they may purchase in the over-allotment option.
    In a naked short position, the number of shares involved is
    greater than the number of shares in the over-allotment option.
    The underwriters may close out any covered short position by
    either exercising their over-allotment option
    <FONT style="white-space: nowrap">and/or</FONT>
    purchasing shares in the open market.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Syndicate covering transactions involve purchases of the common
    stock in the open market after the distribution has been
    completed in order to cover syndicate short positions. In
    determining the source of shares to close out the short
    position, the underwriters will consider, among other things,
    the price of shares available for purchase in the open market as
    compared to the price at which they may purchase shares through
    the over-allotment option. If the underwriters sell more shares
    than could be covered by the over-allotment option, a naked
    short position, the position can only be closed out by buying
    shares in the open market. A naked short position is more likely
    to be created if the underwriters are concerned that there could
    be downward pressure on the price of the shares in the open
    market after pricing that could adversely affect investors who
    purchase in the offering.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Penalty bids permit the representative to reclaim a selling
    concession from a syndicate member when the common stock
    originally sold by the syndicate member is purchased in a
    stabilizing or syndicate covering transaction to cover syndicate
    short positions.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These stabilizing transactions, syndicate covering transactions
    and penalty bids may have the effect of raising or maintaining
    the market price of our common stock or preventing or retarding
    a decline in the market price of the common stock. As a result
    the price of our common stock may be higher than the price
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    76
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    that might otherwise exist in the open market. These
    transactions may be effected on the Nasdaq Global Market or
    otherwise and, if commenced, may be discontinued at any time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A prospectus in electronic format may be made available on the
    websites maintained by one or more of the underwriters, or
    selling group members, if any, participating in this offering
    and one or more of the underwriters participating in this
    offering may distribute prospectuses electronically. The
    representatives may agree to allocate a number of shares to
    underwriters and selling group members for sale to their online
    brokerage account holders. Internet distributions will be
    allocated by the underwriters and selling group members that
    will make Internet distributions on the same basis as other
    allocations.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    77
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='115'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTICE TO
    EUROPEAN ECONOMIC AREA RESIDENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In relation to each Member State of the European Economic Area
    which has implemented the Prospectus Directive, which we refer
    to as a Relevant Member State, with effect from and including
    the date on which the Prospectus Directive is implemented in
    that Relevant Member State, which we refer to as the Relevant
    Implementation Date, an offer of shares of common stock to the
    public may not be made in that Relevant Member State prior to
    the publication of a prospectus in relation to the shares of
    common stock which has been approved by the competent authority
    in that Relevant Member State or, where appropriate, approved in
    another Relevant Member State and notified to the competent
    authority in that Relevant Member State, all in accordance with
    the Prospectus Directive, except that an offer to the public of
    any shares of common stock may be made at any time under the
    following exemptions under the Prospectus Directive if they have
    been implemented in the Relevant Member State,
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 8%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;to legal entities which are authorized or regulated to
    operate in the financial markets or, if not so authorized or
    regulated, whose corporate purpose is solely to invest in
    securities;
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 8%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;to any legal entity which has two or more of
    (1)&#160;an average of at least 250&#160;employees during the
    last financial year; (2)&#160;a total balance sheet of more than
    &#128;43,000,000, and (3)&#160;an annual net turnover of more
    than &#128;50,000,000, as shown in its last annual or
    consolidated accounts;&#160;or
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 8%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;to fewer than 100 natural or legal persons (other than
    qualified investors as defined in the Prospectus Directive)
    subject to obtaining the prior consent of the manager for any
    such offer;
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    provided that no such offer of shares shall result in a
    requirement for the publication of a prospectus pursuant to
    Article&#160;3 of the Prospectus Directive.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the purposes of this section, the expression an &#147;offer
    of shares of common stock to the public&#148; in relation to any
    shares of common stock in any Relevant Member State means the
    communication in any form and by any means of sufficient
    information on the terms of the offer and the shares of common
    stock to be offered so as to enable an investor to decide to
    purchase or subscribe the shares of common stock, as the same
    may be varied in that Member State by any measure implementing
    the Prospectus Directive in that Member State and the expression
    Prospectus Directive means Directive 2003/71/EC and includes any
    relevant implementing measure in each Relevant Member State.
</DIV>
<A name='116'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTICE TO
    UNITED KINGDOM RESIDENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An invitation or inducement to engage in investment activity
    (within the meaning of Section&#160;21 of the Financial Services
    and Markets Act 2000, or the FSMA) has only been communicated or
    caused to be communicated and will only be communicated or
    caused to be communicated in connection with the issue or sale
    of the shares in circumstances in which Section&#160;21(1) of
    the FSMA does not apply to us. All applicable provisions of the
    FSMA have been complied with and will be complied with, with
    respect to anything done in relation to the shares in, from or
    otherwise involving the United Kingdom. This document is only
    being distributed to and is only directed at (i)&#160;persons
    who are outside the United Kingdom or (ii)&#160;investment
    professionals falling within Article&#160;19(5) of the Financial
    Services and Markets Act 2000 (Financial Promotion) Order 2005,
    or the Order, or (iii)&#160;high net worth entities, and other
    persons to whom it may lawfully be communicated, falling within
    Article&#160;49(2)(a) to (d)&#160;of the Order (all such persons
    together, we refer to as relevant persons). The shares are only
    available to, and any invitation, offer or agreement to
    subscribe, purchase or otherwise acquire such shares will be
    engaged only with, relevant persons. Any person who is not a
    relevant person should not act or rely on this document or any
    of its contents.
</DIV>
<A name='122'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTICE TO
    SWISS INVESTORS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This document, as well as any other material relating to the
    shares which are the subject of the offering contemplated by
    this prospectus, do not constitute an issue prospectus pursuant
    to Article&#160;652a of the Swiss Code of Obligations. The
    shares will not be listed on the SWX Swiss Exchange and,
    therefore the documents relating to the shares, including, but
    not limited to, this document, do not claim to comply with the
    disclosure standards of the listing rules of SWX Swiss Exchange
    and corresponding prospectus schemes annexed to the listing
    rules of the SWX Swiss Exchange. The shares are being offered in
    Switzerland by way of a private
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    78
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    placement, <I>i.e. </I>to a small number of selected investors
    only, without any public offer and only to investors who do not
    purchase the shares with the intention to distribute them to the
    public. The investors will be individually approached by us from
    time to time. This document, as well as any other material
    relating to the shares, is personal and confidential and do not
    constitute an offer to any other person. This document may only
    be used by those investors to whom it has been handed out in
    connection with the offering described herein and may neither
    directly nor indirectly be distributed or made available to
    other persons without our express consent. It may not be used in
    connection with any other offer and shall in particular not be
    copied
    <FONT style="white-space: nowrap">and/or</FONT>
    distributed to the public in (or from) Switzerland.
</DIV>
<A name='123'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTICE TO
    INVESTORS IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This document relates to an exempt offer in accordance with the
    Offered Securities Rules of the Dubai Financial Services
    Authority. This document is intended for distribution only to
    persons of a type specified in those rules. It must not be
    delivered to, or relied on by, any other person. The Dubai
    Financial Services Authority has no responsibility for reviewing
    or verifying any documents in connection with exempt offers. The
    Dubai Financial Services Authority has not approved this
    document nor taken steps to verify the information set out in
    it, and has no responsibility for it. The shares which are the
    subject of the offering contemplated by this prospectus may be
    illiquid
    <FONT style="white-space: nowrap">and/or</FONT>
    subject to restrictions on their resale. Prospective purchasers
    of the shares offered should conduct their own due diligence on
    the shares. If you do not understand the contents of this
    document you should consult an authorized financial adviser.
</DIV>
<A name='117'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTICE TO
    CANADIAN RESIDENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Resale
    Restrictions</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The distribution of the common stock in Canada is being made
    only on a private placement basis exempt from the requirement
    that we and the selling stockholders prepare and file a
    prospectus with the securities regulatory authorities in each
    province where trades of common stock are made. Any resale of
    the common stock in Canada must be made under applicable
    securities laws which will vary depending on the relevant
    jurisdiction, and which may require resales to be made under
    available statutory exemptions or under a discretionary
    exemption granted by the applicable Canadian securities
    regulatory authority. Purchasers are advised to seek legal
    advice prior to any resale of the common stock.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Representations
    of Purchasers</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By purchasing the common stock in Canada and accepting a
    purchase confirmation a purchaser is representing to us, the
    selling stockholders, and the dealer from whom the purchase
    confirmation is received that:
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the purchaser is entitled under applicable provincial securities
    laws to purchase the common stock without the benefit of a
    prospectus qualified under those securities laws,
</TD>
</TR>


<TR style="line-height: 4pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    where required by law, that the purchaser is purchasing as
    principal and not as agent,
</TD>
</TR>


<TR style="line-height: 4pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the purchaser has reviewed the text above under &#147;Resale
    Restrictions,&#148;&#160;and
</TD>
</TR>


<TR style="line-height: 4pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the purchaser acknowledges and consents to the provision of
    specified information concerning its purchase of the common
    stock to the regulatory authority that by law is entitled to
    collect the information.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Further details concerning the legal authority for this
    information is available on request.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Rights of
    Action&#160;&#151; Ontario Purchasers Only</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under Ontario securities legislation, certain purchasers who
    purchase a security offered by this prospectus during the period
    of distribution will have a statutory right of action for
    damages, or while still the owner of the common stock, for
    rescission against us and the selling stockholders in the event
    that this prospectus contains a misrepresentation without regard
    to whether the purchaser relied on the misrepresentation. The
    right of action for damages is exercisable not later than the
    earlier of 180&#160;days from the date the purchaser first had
    knowledge of the facts giving rise to the cause of action and
    three years from the date on which payment is made for the
    common stock. The right of action for rescission is exercisable
    not later than 180&#160;days from the
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    79
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    date on which payment is made for the common stock. If a
    purchaser elects to exercise the right of action for rescission,
    the purchaser will have no right of action for damages against
    us or the selling stockholders. In no case will the amount
    recoverable in any action exceed the price at which the common
    stock were offered to the purchaser and if the purchaser is
    shown to have purchased the securities with knowledge of the
    misrepresentation, we and the selling stockholders will have no
    liability. In the case of an action for damages, we and the
    selling stockholders will not be liable for all or any portion
    of the damages that are proven to not represent the depreciation
    in value of the common stock as a result of the
    misrepresentation relied upon. These rights are in addition to,
    and without derogation from, any other rights or remedies
    available at law to an Ontario purchaser. The foregoing is a
    summary of the rights available to an Ontario purchaser. Ontario
    purchasers should refer to the complete text of the relevant
    statutory provisions.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Enforcement
    of Legal Rights</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All of our directors and officers as well as the experts named
    herein and the selling stockholders may be located outside of
    Canada and, as a result, it may not be possible for Canadian
    purchasers to effect service of process within Canada upon us or
    those persons. All or a substantial portion of our assets and
    the assets of those persons may be located outside of Canada
    and, as a result, it may not be possible to satisfy a judgment
    against us or those persons in Canada or to enforce a judgment
    obtained in Canadian courts against us or those persons outside
    of Canada.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    and Eligibility for Investment</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Canadian purchasers of the common stock should consult their own
    legal and tax advisors with respect to the tax consequences of
    an investment in the common stock in their particular
    circumstances and about the eligibility of the common stock for
    investment by the purchaser under relevant Canadian legislation.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    80
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='118'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The validity of the shares of common stock offered by this
    prospectus and other legal matters will be passed upon for us by
    DLA Piper LLP (US), Phoenix, Arizona. The underwriters have been
    represented by Latham&#160;&#038; Watkins LLP, Los Angeles,
    California.
</DIV>
<A name='119'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXPERTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The financial statements of Grand Canyon Education, Inc.
    appearing in Grand Canyon Education, Inc.&#146;s Annual Report
    <FONT style="white-space: nowrap">(Form&#160;10-K)</FONT>
    for the year ended December&#160;31, 2008 have been audited by
    Ernst&#160;&#038; Young LLP, independent registered public
    accounting firm, as set forth in their report thereon, included
    therein, and incorporated herein by reference. Such financial
    statements are incorporated herein by reference in reliance upon
    such report given on the authority of such firm as experts in
    accounting and auditing.
</DIV>
<A name='120'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">WHERE YOU
    CAN FIND MORE INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have filed with the SEC a registration statement on
    <FONT style="white-space: nowrap">Form&#160;S-1,</FONT>
    which includes amendments and exhibits, under the Securities Act
    and the rules and regulations under the Securities Act for the
    registration of common stock being offered by this prospectus.
    This prospectus, which constitutes a part of the registration
    statement, does not contain all the information that is in the
    registration statement and its exhibits and schedules. Certain
    portions of the registration statement have been omitted as
    allowed by the rules and regulations of the SEC. Statements in
    this prospectus that summarize documents are not necessarily
    complete, and in each case you should refer to the copy of the
    document filed as an exhibit to the registration statement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are subject to the reporting and information requirements of
    the Exchange Act and, as a result, we are required to file
    periodic and current reports, proxy statements and other
    information with the SEC. You may read and copy the registration
    statement, including exhibits and schedules filed with it, and
    reports or other information we file with the SEC at the public
    reference facilities of the SEC at 100&#160;F&#160;Street, N.E.,
    Room&#160;1580, Washington,&#160;D.C. 20549. You may call the
    SEC at
    <FONT style="white-space: nowrap">1-800-SEC-0330</FONT>
    for further information on the operation of the public reference
    rooms. In addition, the registration statement and other public
    filings can be obtained from the SEC&#146;s Internet site at
    <U><FONT style="white-space: nowrap">http://www.sec.gov</FONT></U>.
</DIV>
<A name='121'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INCORPORATION
    BY REFERENCE</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The SEC allows us to &#147;incorporate by reference&#148;
    information in this prospectus that we have filed with it. This
    means that we can disclose important information to you by
    referring you to another document already on file with the SEC.
    The information incorporated by reference is an important part
    of this prospectus, except for any information that is
    superseded by information that is included directly in this
    prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus incorporates by reference the documents listed
    below that we have previously filed with the SEC (excluding any
    document, or portion thereof, to the extent disclosure is
    furnished and not filed).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2008, filed with the SEC on
    February&#160;20, 2009, which incorporates by reference certain
    sections from our proxy statement filed with the SEC on
    April&#160;10, 2009, which we also incorporate by reference into
    this prospectus;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our Quarterly Reports on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    for the quarters ended March&#160;31, 2009 and June&#160;30,
    2009;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our Current Reports on
    <FONT style="white-space: nowrap">Form&#160;8-K</FONT>
    filed with the SEC on February&#160;19, 2009, March&#160;25,
    2009, April&#160;3, 2009, April&#160;27, 2009, May&#160;4, 2009,
    and August&#160;3, 2009.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    81
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will provide to each person, including any beneficial owner,
    to whom a prospectus is delivered, a copy of the reports and
    documents that have been incorporated by reference in this
    prospectus, at no cost. Any such request may be made by writing
    or telephoning us at the following address or phone number:
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">Grand Canyon
    Education, Inc.<BR>
    3300&#160;West Camelback Road<BR>
    Phoenix, Arizona 85017<BR>
    Attention: Corporate Secretary<BR>
    <FONT style="white-space: nowrap">(602)&#160;639-7500</FONT>
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These documents can also be requested through, and are available
    in, the Investor Relations section of our website, which is
    located at www.gcu.edu, or as described under &#147;Where You
    Can Find Additional Information&#148; above. The information on,
    or accessible through, our website does not constitute part of,
    and is not incorporated into, this prospectus.
</DIV>

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    <BR>
    82
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=0 -->

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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="p15698orp1569800.gif" alt="(GRAND CANYON UNIVERSITY LOGO)">
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=0 -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=0 -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PART&#160;II<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INFORMATION
    NOT REQUIRED IN PROSPECTUS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;13.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    Expenses of Issuance and Distribution.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following are the estimated expenses to be incurred in
    connection with the issuance and distribution of the securities
    registered under this registration statement, other than
    underwriting discounts and commissions. All amounts shown are
    estimates except the SEC registration fee and the Financial
    Industry Regulatory Authority, Inc. filing fee. The following
    expenses will be borne solely by the registrant.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="92%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    SEC registration fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,442
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    FINRA filing fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,628
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Nasdaq listing fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Legal fees and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accounting fees and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Transfer agent fees and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Miscellaneous expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 4%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    Estimate</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;14.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Indemnification
    of Directors and Officers.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;145(a) of the DGCL provides, in general, that a
    corporation may indemnify any person who was or is a party or is
    threatened to be made a party to any threatened, pending, or
    completed action, suit, or proceeding, whether civil, criminal,
    administrative, or investigative (other than an action by or in
    the right of the corporation), because he or she is or was a
    director, officer, employee, or agent of the corporation, or is
    or was serving at the request of the corporation as a director,
    officer, employee, or agent of another corporation, partnership,
    joint venture, trust, or other enterprise, against expenses
    (including attorneys&#146; fees), judgments, fines, and amounts
    paid in settlement actually and reasonably incurred by the
    person in connection with such action, suit, or proceeding, if
    he or she acted in good faith and in a manner he or she
    reasonably believed to be in or not opposed to the best
    interests of the corporation and, with respect to any criminal
    action or proceeding, had no reasonable cause to believe his or
    her conduct was unlawful.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;145(b) of the DGCL provides, in general, that a
    corporation may indemnify any person who was or is a party or is
    threatened to be made a party to any threatened, pending, or
    completed action or suit by or in the right of the corporation
    to procure a judgment in its favor because the person is or was
    a director, officer, employee, or agent of the corporation, or
    is or was serving at the request of the corporation as a
    director, officer, employee, or agent of another corporation,
    partnership, joint venture, trust, or other enterprise, against
    expenses (including attorneys&#146; fees) actually and
    reasonably incurred by the person in connection with the defense
    or settlement of such action or suit if he or she acted in good
    faith and in a manner he or she reasonably believed to be in or
    not opposed to the best interests of the corporation, except
    that no indemnification shall be made with respect to any claim,
    issue, or matter as to which he or she shall have been adjudged
    to be liable to the corporation unless and only to the extent
    that the Court of Chancery or other adjudicating court
    determines that, despite the adjudication of liability but in
    view of all of the circumstances of the case, he or she is
    fairly and reasonably entitled to indemnity for such expenses
    which the Court of Chancery or other adjudicating court shall
    deem proper.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;145(g) of the DGCL provides, in general, that a
    corporation may purchase and maintain insurance on behalf of any
    person who is or was a director, officer, employee, or agent of
    the corporation, or is or was serving at the request of the
    corporation as a director, officer, employee, or agent of
    another corporation, partnership, joint venture, trust or other
    enterprise against any liability asserted against such person
    and incurred by such person in any such capacity, or arising out
    of his or her status as such, whether or not the corporation
    would have the power to indemnify the person against such
    liability under Section&#160;145 of the DGCL.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-1
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;8.1 of our bylaws provides that we will indemnify,
    to the fullest extent permitted by the DGCL, any person who was
    or is made or is threatened to be made a party or is otherwise
    involved in any action, suit, or proceeding, whether civil,
    criminal, administrative, or investigative, by reason of the
    fact that he, or a person for whom he is the legal
    representative, is or was one of our directors or officers or,
    while serving as one of our directors or officers, is or was
    serving at our request as a director, officer, employee, or
    agent of another corporation or of another entity, against all
    liability and loss suffered and expenses (including
    attorneys&#146; fees) reasonably incurred by such person,
    subject to limited exceptions relating to indemnity in
    connection with a proceeding (or part thereof) initiated by such
    person. Section&#160;8.1 of our bylaws further provides for the
    advancement of expenses to each of our officers and directors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Article&#160;VIII of our charter provides that, to the fullest
    extent permitted by the DGCL, as the same exists or may be
    amended from time to time, our directors shall not be personally
    liable to us or our stockholders for monetary damages for breach
    of fiduciary duty as a director. Under Section&#160;102(b)(7) of
    the DGCL, the personal liability of a director to the
    corporation or its stockholders for monetary damages for breach
    of fiduciary duty can be limited or eliminated except
    (i)&#160;for any breach of the director&#146;s duty of loyalty
    to the corporation or its stockholders; (ii)&#160;for acts or
    omissions not in good faith or which involve intentional
    misconduct or a knowing violation of law; (iii)&#160;under
    Section&#160;174 of the DGCL (relating to unlawful payment of
    dividend or unlawful stock purchase or redemption); or
    (iv)&#160;for any transaction from which the director derived an
    improper personal benefit.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We also intend to maintain a general liability insurance policy
    which covers certain liabilities of directors and officers of
    our company arising out of claims based on acts or omissions in
    their capacities as directors or officers, whether or not we
    would have the power to indemnify such person against such
    liability under the DGCL or the provisions of charter or bylaws.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have entered into indemnification agreements with each of our
    directors and our executive officers. These agreements provide
    that we will indemnify each of our directors and such officers
    to the fullest extent permitted by law and by our charter and
    bylaws.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In any underwriting agreement we enter into in connection with
    the sale of common stock being registered hereby, the
    underwriters will agree to indemnify, under certain conditions,
    us, our directors, our officers and persons who control us,
    within the meaning of the Securities Act, against certain
    liabilities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF"><!-- TABLE 05 -->

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;15.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Recent
    Sales of Unregistered Securities.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Since January&#160;1, 2006, we have issued the following
    securities that were not registered under the Securities Act:
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Preferred
    Stock</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On December&#160;18, 2007, we sold an aggregate of
    3,829&#160;shares of our newly designed Series&#160;C preferred
    stock at a purchase price of $3,500 per share, or approximately
    $13.4&#160;million total, of which 1,675&#160;shares were sold
    to the Endeavour Entities, 834&#160;shares were sold to Rich
    Crow Enterprises, LLC (an investment entity controlled by Brent
    D. Richardson, our Executive Chairman, and Christopher C.
    Richardson, our General Counsel and a director), and
    935&#160;shares were sold to 220 GCU, L.P. and its affiliates.
    The purchase price payable by Rich Crow Enterprises for its
    shares of Series&#160;C preferred stock was paid in part by the
    exchange of the 865 outstanding shares of Series&#160;B
    preferred stock it purchased in 2006. The sales were made in
    reliance on Rule&#160;506 of Regulation&#160;D promulgated under
    the Securities Act.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Common
    Stock</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In November 2008, we issued, in reliance on Section&#160;4(2) of
    the Securities Act, 909,348&#160;shares of our common stock upon
    the exercise of a warrant that was issued in June 2004. The
    exercise price of the warrant was approximately $0.58 per share,
    or $526,316 of the aggregate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In November 2008, we granted, in reliance on Section&#160;4(2)
    of the Securities Act, 109,329&#160;shares of our common stock
    to our Chief Executive Officer.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;16.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Exhibits
    and Financial Statement Schedules.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Exhibits
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="8%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="44%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="44%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Number</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Description</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Method of Filing</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    1.1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Underwriting Agreement
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    To be filed by amendment.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    3.1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Certificate of Incorporation
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;3.1 to Amendment
    No.&#160;6 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on November&#160;12, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    3.2
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Bylaws
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;3.2 to Amendment
    No.&#160;6 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on November&#160;12, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    4.1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Specimen of Stock Certificate
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;4.1 to Amendment
    No.&#160;2 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on September&#160;29, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    4.2
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Investor Rights Agreement, dated September
    17, 2008, by and among Grand Canyon Education, Inc. and the
    other parties named therein
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;4.2 to Amendment
    No.&#160;2 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on September&#160;29, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    5.1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Opinion of DLA Piper LLP (US) regarding the validating of the
    common stock
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Filed herewith.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Executive Employment Agreement, dated
    September 10, 2008, by and between Grand Canyon Education, Inc.
    and Brent&#160;D.&#160;Richardson&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.1 to Amendment
    No.&#160;2 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on September&#160;29, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.2
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Executive Employment Agreement, dated
    September 10, 2008, by and between Grand Canyon Education, Inc.
    and Christopher C. Richardson&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.2 to Amendment
    No.&#160;2 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on September&#160;29, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.3
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Executive Employment Agreement, dated September 1, 2008, by and
    between Grand Canyon Education, Inc. and Kathy Player&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.1 to the
    Company&#146;s Current Report on
    <FONT style="white-space: nowrap">Form&#160;8-K</FONT>
    filed with the SEC on March&#160;25, 2009.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.4
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    2008 Equity Incentive Plan&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.4 to Amendment
    No.&#160;2 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on September&#160;29, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.5
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    2008 Employee Stock Purchase Plan&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.5 to Amendment
    No.&#160;2 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on September&#160;29, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.6
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Lease Agreement, effective June 28, 2004, by and between Spirit
    Finance Acquisitions, LLC and Significant Education, LLC
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.7 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.7
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    First Amendment to Lease Agreement, effective September 24,
    2004, by and between Spirit Finance Acquisitions, LLC and
    Significant Education, LLC
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.8 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.8
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Second Amendment to Lease Agreement, effective August 23, 2005,
    by and between Spirit Master Funding, LLC and Significant
    Education, LLC
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.9 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="8%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="44%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="44%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Number</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Description</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Method of Filing</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.9
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Third Amendment to Lease Agreement, effective June 2006, by and
    between Spirit Master Funding, LLC and Significant Education,
    Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.10 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.10
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Fourth Amendment to Lease Agreement, effective August 9, 2006,
    by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.11 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.11
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Fifth Amendment to Lease Agreement, effective December 31, 2006,
    by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.12 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.12
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Sixth Amendment to Lease Agreement, effective September 30,
    2007, by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.13 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.13
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Seventh Amendment to Lease Agreement, effective March 28, 2008,
    by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.14 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.14
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    License Agreement, dated June 30, 2004, by and between Blanchard
    Education, LLC and Significant Education, LLC
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.15 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.15
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Letter Agreement, dated February 6, 2006, by and between The Ken
    Blanchard Companies and Grand Canyon University
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.16 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.16
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amendment to License Agreement, dated May 8, 2008, by and
    between Blanchard Education, LLC and Grand Canyon Education, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.17 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.17
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Collaboration Agreement, dated July 11, 2005, by and between
    Mind Streams, LLC and Significant Education, LLC (as
    supplemented by Project One and Project Two)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.18 to Amendment
    No.&#160;1 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on August&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.18
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Executive Employment Agreement, dated June 25, 2008, by and
    between Grand Canyon Education, Inc. and Daniel E. Bachus&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.19 to Amendment
    No.&#160;1 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on August&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.19
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Executive Employment Agreement, dated June 25, 2008, by and
    between Grand Canyon Education, Inc. and Brian E. Mueller&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.20 to Amendment
    No.&#160;1 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on August&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.20
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Executive Employment Agreement, dated June 25, 2008, by and
    between Grand Canyon Education, Inc. and W. Stan Meyer&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.21 to Amendment
    No.&#160;1 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on August&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.21
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Director and Officer Indemnity Agreement
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.21 to Amendment
    No.&#160;2 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on September&#160;29, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.22
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Purchase and Sale Agreement, dated April 27, 2009, by and among
    Grand Canyon Education, Inc., Spirit Master Funding, LLC, and
    Spirit Management Company
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.1 to the
    Company&#146;s Quarterly Report on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    filed with the SEC on August&#160;3, 2009.
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    II-4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="8%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="44%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="44%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Number</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Description</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Method of Filing</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.23
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Loan Agreement, dated April 27, 2009, by and between Grand
    Canyon Education, Inc. and Bank of America, N.A.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.2 to the
    Company&#146;s Quarterly Report on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    filed with the SEC on August&#160;3, 2009.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    23.1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Independent Registered Public Accounting Firm
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Filed herewith.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    23.2
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of DLA Piper LLP (US)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Included in Exhibit 5.1.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    24.1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Power of Attorney
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Included on signature page.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Significant Education, LLC is the predecessor to Significant
    Education, Inc., which is the former name of Grand Canyon
    Education, Inc.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
    &#134; </TD>
    <TD></TD>
    <TD valign="bottom">
    Indicates a management contract or any compensatory plan,
    contract or arrangement.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Financial Statement Schedules
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All schedules are omitted because they are not required, are not
    applicable or, the information is included in the financial
    statements or the notes thereto.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;17.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Undertakings.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Insofar as indemnification for liabilities arising under the
    Securities Act may be permitted to our directors, officers, and
    controlling persons pursuant to the foregoing provisions, or
    otherwise, we have been advised that in the opinion of the SEC
    such indemnification is against public policy as expressed in
    the Securities Act and is, therefore, unenforceable. In the
    event that a claim for indemnification against such liabilities
    (other than the payment by us of expenses incurred or paid by a
    director, officer, or controlling person of us in the successful
    defense of any action, suit, or proceeding) is asserted by such
    director, officer, or controlling person in connection with the
    securities being registered, we will, unless in the opinion of
    counsel the matter has been settled by controlling precedent,
    submit to a court of appropriate jurisdiction the question
    whether such indemnification by us is against public policy as
    expressed in the Securities Act and will be governed by the
    final adjudication of such issue.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The undersigned registrant hereby undertakes to provide to the
    underwriters at the closing specified in the underwriting
    agreement, certificates in such denominations and registered in
    such names as required by the underwriters to permit prompt
    delivery to each purchaser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We hereby undertake that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 8%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;for purposes of determining any liability under the
    Securities Act, the information omitted from the form of
    prospectus filed as part of this registration statement in
    reliance upon Rule&#160;430A and contained in a form of
    prospectus filed by the registrant pursuant to
    Rule&#160;424(b)(1) or (4)&#160;or 497(h) under the Securities
    Act shall be deemed to be part of this registration statement as
    of the time it was declared effective.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 8%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;for purposes of determining any liability under the
    Securities Act, each post-effective amendment that contains a
    form of prospectus shall be deemed to be a new registration
    statement relating to the securities offered therein, and the
    offering of such securities at that time shall be deemed to be
    the initial bona fide offering thereof.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    II-5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SIGNATURES</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the requirements of the Securities Act of 1933, the
    registrant has duly caused this registration statement to be
    signed on its behalf by the undersigned, thereunto duly
    authorized, in the City of Phoenix, State of Arizona on
    August&#160;26, 2009.
</DIV>

<DIV style="margin-top: 22pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>GRAND CANYON EDUCATION, INC.</B>
</DIV>

<DIV style="margin-top: 22pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="49%"></TD>
    <TD width="4%"></TD>
    <TD width="47%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    By:&#160;
</TD>
    <TD align="left">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Brian
    E. Mueller</DIV>
</TD>
</TR>

</TABLE>

<DIV style="font-size: 2pt; margin-left: 53%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=0 -->

<DIV align="left" style="margin-left: 53%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Name: Brian E. Mueller
</DIV>

<DIV align="left" style="margin-left: 53%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Title:&#160;&#160;Chief Executive Officer and Director
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
    appears below constitutes and appoints Brian E. Mueller, Daniel
    E. Bachus, Brent D. Richardson, and Christopher C. Richardson,
    and each of them, his true and lawful attorneys-in-fact and
    agents, with full power of substitution and resubstitution, for
    him and in his name, place and stead, in any and all capacities,
    to sign such registration statement and any and all amendments,
    including past-effective amendments, to this registration
    statement, including a prospectus or amended prospectus therein
    and any registration statement for the same offering that is to
    be effective upon filing pursuant to Rule&#160;462(b) under the
    Securities Act, and to file the same with all documents in
    connection therewith to be filed the Securities and Exchange
    Commission, granting unto said attorneys-in-fact and agents, and
    each of them, full power and authority to do and perform each
    and every act and thing requisite and necessary to be done in
    and about the premises, as fully and to all intents and purposes
    as he might or could do in person hereby ratifying and
    confirming all that said attorneys-in-fact and agents, or his
    substitute or substitutes, may lawfully do or cause to be done
    by virtue hereof.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the requirements of the Securities Act of 1933, this
    registration statement and the Power of Attorney has been signed
    below by the following persons on behalf of the registrant and
    in the capacities and on the dates indicated.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="3%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="37%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="14%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Signature</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Date</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 8pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Brent
    D. Richardson</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=2083 iwidth=174 length=0 -->Brent
    D. Richardson
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Executive Chairman
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    August&#160;26, 2009
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Brian
    E. Mueller</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=2083 iwidth=174 length=0 -->Brian
    E. Mueller
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Chief Executive Officer and Director (Principal Executive
    Officer)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    August&#160;26, 2009
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Daniel
    E. Bachus</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=2083 iwidth=174 length=0 -->Daniel
    E. Bachus
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Chief Financial Officer<BR>
    (Principal Financial Officer and Principal<BR>
    Accounting Officer)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    August&#160;26, 2009
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Christopher
    C. Richardson</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=2083 iwidth=174 length=0 -->Christopher
    C. Richardson
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    General Counsel and Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    August&#160;26, 2009
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;David
    J. Johnson</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=2083 iwidth=174 length=0 -->David
    J. Johnson
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    August&#160;26, 2009
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Jack
    A. Henry</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=2083 iwidth=174 length=0 -->Jack
    A. Henry
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    August&#160;26, 2009
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;D.
    Mark Dorman</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=2083 iwidth=174 length=0 -->D.
    Mark Dorman
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    August&#160;26, 2009
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Chad
    N. Heath</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=2083 iwidth=174 length=0 -->Chad
    N. Heath
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    August&#160;26, 2009
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-6
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXHIBIT&#160;INDEX</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="8%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="44%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="44%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Number</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Description</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Method of Filing</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    1.1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Underwriting Agreement
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    To be filed by amendment.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    3.1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Certificate of Incorporation
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;3.1 to Amendment
    No.&#160;6 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on November&#160;12, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    3.2
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Bylaws
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;3.2 to Amendment
    No.&#160;6 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on November&#160;12, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    4.1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Specimen of Stock Certificate
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;4.1 to Amendment
    No.&#160;2 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on September&#160;29, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    4.2
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Investor Rights Agreement, dated September
    17, 2008, by and among Grand Canyon Education, Inc. and the
    other parties named therein
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;4.2 to Amendment
    No.&#160;2 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on September&#160;29, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    5.1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Opinion of DLA Piper LLP (US) regarding the validity of the
    common stock
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Filed herewith
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Executive Employment Agreement, dated
    September 10, 2008, by and between Grand Canyon Education, Inc.
    and Brent D. Richardson&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.1 to Amendment
    No.&#160;2 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on September&#160;29, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.2
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Executive Employment Agreement, dated
    September 10, 2008, by and between Grand Canyon Education, Inc.
    and Christopher C. Richardson&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.2 to Amendment
    No.&#160;2 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on September&#160;29, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.3
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Executive Employment Agreement, dated September 1, 2008, by and
    between Grand Canyon Education, Inc. and Kathy Player&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.1 to the
    Company&#146;s Current Report on
    <FONT style="white-space: nowrap">Form&#160;8-K</FONT>
    filed with the SEC on March&#160;25, 2009.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.4
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    2008 Equity Incentive Plan&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.4 to Amendment
    No.&#160;2 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on September&#160;29, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.5
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    2008 Employee Stock Purchase Plan&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.5 to Amendment
    No.&#160;2 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on September&#160;29, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.6
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Lease Agreement, effective June 28, 2004, by and between Spirit
    Finance Acquisitions, LLC and Significant Education, LLC
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.7 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.7
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    First Amendment to Lease Agreement, effective September 24,
    2004, by and between Spirit Finance Acquisitions, LLC and
    Significant Education, LLC
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.8 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.8
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Second Amendment to Lease Agreement, effective August 23, 2005,
    by and between Spirit Master Funding, LLC and Significant
    Education, LLC
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.9 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
</TABLE>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="8%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="44%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="44%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Number</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Description</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Method of Filing</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.9
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Third Amendment to Lease Agreement, effective June 2006, by and
    between Spirit Master Funding, LLC and Significant Education,
    Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.10 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.10
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Fourth Amendment to Lease Agreement, effective August 9, 2006,
    by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.11 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.11
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Fifth Amendment to Lease Agreement, effective December 31, 2006,
    by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.12 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.12
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Sixth Amendment to Lease Agreement, effective September 30,
    2007, by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.13 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.13
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Seventh Amendment to Lease Agreement, effective March 28, 2008,
    by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.14 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.14
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    License Agreement, dated June 30, 2004, by and between Blanchard
    Education, LLC and Significant Education, LLC
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.15 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.15
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Letter Agreement, dated February 6, 2006, by and between The Ken
    Blanchard Companies and Grand Canyon University
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.16 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.16
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amendment to License Agreement, dated May 8, 2008, by and
    between Blanchard Education, LLC and Grand Canyon Education, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.17 to the
    Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on May&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.17
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Collaboration Agreement, dated July 11, 2005, by and between
    Mind Streams, LLC and Significant Education, LLC (as
    supplemented by Project One and Project Two)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.18 to Amendment
    No.&#160;1 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on August&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.18
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Executive Employment Agreement, dated June 25, 2008, by and
    between Grand Canyon Education, Inc. and Daniel E. Bachus&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.19 to Amendment
    No.&#160;1 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on August&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.19
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Executive Employment Agreement, dated June 25, 2008, by and
    between Grand Canyon Education, Inc. and Brian E. Mueller&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.20 to Amendment
    No.&#160;1 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on August&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.20
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Executive Employment Agreement, dated June 25, 2008, by and
    between Grand Canyon Education, Inc. and W. Stan Meyer&#134;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.21 to Amendment
    No.&#160;1 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on August&#160;13, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.21
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Director and Officer Indemnity Agreement
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.21 to Amendment
    No.&#160;2 to the Company&#146;s Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-1</FONT>
    filed with the SEC on September&#160;29, 2008.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.22
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Purchase and Sale Agreement, dated April 27, 2009, by and among
    Grand Canyon Education, Inc., Spirit Master Funding, LLC, and
    Spirit Management Company
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.1 to the
    Company&#146;s Quarterly Report on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    filed with the SEC on August&#160;3, 2009.
</TD>
</TR>
</TABLE>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="8%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="44%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="44%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Number</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Description</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Method of Filing</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    10.23
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Loan Agreement, dated April 27, 2009, by and between Grand
    Canyon Education, Inc. and Bank of America, N.A.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Incorporated by reference to Exhibit&#160;10.2 to the
    Company&#146;s Quarterly Report on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    filed with the SEC on August&#160;3, 2009.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    23.1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Independent Registered Public Accounting Firm
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Filed herewith.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    23.2
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of DLA Piper LLP (US)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Included in Exhibit 5.1.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    24.1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Power of Attorney
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Included on signature page.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Significant Education, LLC is the predecessor to Significant
    Education, Inc., which is the former name of Grand Canyon
    Education, Inc.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
    &#134; </TD>
    <TD></TD>
    <TD valign="bottom">
    Indicates a management contract or any compensatory plan,
    contract or arrangement.</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

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sv1
Table of Contents
As filed with the Securities and Exchange Commission on
    August 27, 2009
Registration
    No. 333-
UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
Washington, DC 20549
Form S-1
REGISTRATION
    STATEMENT
THE SECURITIES ACT OF
    1933
Grand Canyon Education,
    Inc.
(Exact Name of Registrant as
    Specified in Its Charter)
Delaware
8221
20-3356009
(State or Other Jurisdiction
    of
Incorporation or Organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification Number)
3300 W. Camelback Road
Phoenix, Arizona 85017
(602) 639-7500
(Address, Including Zip Code,
    and Telephone Number, Including Area Code, of Registrant's
    Principal Executive Offices)
Christopher C. Richardson
General Counsel
Grand Canyon Education, Inc.
3300 W. Camelback Road
Phoenix, Arizona 85017
(602) 639-7500
(Name, Address, Including Zip
    Code, and Telephone Number, Including Area Code, of Agent For
    Service)
Copies to:
David P. Lewis, Esq.
Mark A. Stegemoeller, Esq.
DLA Piper LLP (US)
Latham & Watkins LLP
2525 East Camelback Road, Suite 1000
355 South Grand Avenue
Phoenix, Arizona 85016
Los Angeles, California 90071
(480) 606-5100
(213) 485-1234
Approximate date of commencement of proposed sale to the
    public:
As soon as practicable after this
    registration statement becomes effective.
If any of the securities being registered on this form are to be
    offered on a delayed or continuous basis pursuant to
    Rule 415 under the Securities Act of 1933, check the
    following
    box.
o
If this form is filed to register additional securities for an
    offering pursuant to Rule 462(b) under the Securities Act,
    please check the following box and list the Securities Act
    registration statement number of the earlier effective
    registration statement for the same
    offering.
o
If this form is a post-effective amendment filed pursuant to
    Rule 462(c) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.
o
If this form is a post-effective amendment filed pursuant to
    Rule 462(d) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.
o
Indicate by check mark whether the registrant is a large
    accelerated filer, an accelerated filer, a non-accelerated
    filer, or a smaller reporting company. See the definitions of
    "large accelerated filer," "accelerated
    filer" and "smaller reporting company" in Rule
12b-2
of the
    Exchange Act. (Check one):
Large
    accelerated
    filer
o
Accelerated
    filer
o
Non-accelerated
filer
þ
Smaller
    reporting
    company
o
(Do not check if a smaller reporting company)
CALCULATION
    OF REGISTRATION FEE
Proposed Maximum
Proposed Maximum
Amount of
Title of Each Class of
Offering
Aggregate
Registration
Security to be Registered
Amount to be Registered
Price per
    Share
(1)
Offering
    Price
(1)
Fee
(2)
Common Stock, par value $0.01 per share
8,000,000
$18.91
$151,280,000
$8,442
(1)
Estimated solely for the purpose of calculating the registration
    fee pursuant to Rule 457(c) under the Securities Act on the
    basis of the average of the high and low prices of Grand Canyon
    Education, Inc.'s common stock as reported on The Nasdaq
    Global Market on August 25, 2009.
(2)
Calculated pursuant to Rule 457(o) based on an estimate of
    the proposed maximum aggregate offering price, including the
    offering price of shares that the underwriters have the option
    to purchase to cover over-allotments, if any.
The Registrant hereby amends this Registration Statement on
    such date or dates as may be necessary to delay its effective
    date until the Registrant shall file a further amendment which
    specifically states that this Registration Statement shall
    thereafter become effective in accordance with Section 8(a)
    of the Securities Act or until the Registration Statement shall
    become effective on such date as the Commission, acting pursuant
    to said Section 8(a), shall determine.
Table of Contents
The
information in this prospectus is not complete and may be
changed. We and the selling stockholders may not sell these
securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted.
Subject
    to Completion
Preliminary
    Prospectus Dated August 27, 2009
Shares
Grand Canyon Education, Inc.
Common Stock
We are offering 1,000,000 shares of our common stock and
    the selling stockholders identified in this prospectus are
    offering           shares
    of our common stock. We will not receive any of the proceeds
    from the sale of the shares being sold by the selling
    stockholders.
Our common stock is listed on The Nasdaq Global Market under the
    symbol "LOPE." The last reported sale price of our
    common stock on August 25, 2009 was $18.58 per share.
Investing in our common stock involves risks. See "Risk
    Factors" beginning on page 10.
Per Share
Total
Public offering price
$
$
Underwriting discounts and commissions
$
$
Proceeds, before expenses, to us
$
$
Proceeds, before expenses, to the selling stockholders
$
$
Certain of the selling stockholders have granted the
    underwriters a
30-day
option to purchase a maximum of additional shares on the same
    terms and conditions as set forth above, to cover
    over-allotments of shares, if any.
Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus is truthful or
    complete. Any representation to the contrary is a criminal
    offense.
Delivery of the shares of common stock will be made on or
    about          ,
    2009.
Joint Book-Running Managers
Credit
    Suisse
BofA Merrill Lynch
BMO
    Capital Markets
William Blair & Company
Piper Jaffray
Barrington Research
The date of this prospectus
    is          ,
    2009.
TABLE OF
    CONTENTS
Page
Prospectus Summary
1
Risk Factors
10
Forward-Looking Statements
37
Use of Proceeds
39
Price Range of Common Stock
39
Dividend Policy
39
Capitalization
40
Regulation
41
Certain Relationships and Related Transactions
60
Beneficial Ownership of Common Stock
64
Selling Stockholders
66
Description of Capital Stock
68
Material U.S. Federal Income and Estate Tax
    Considerations for
Non-U.S.
Holders
72
Underwriting
75
Notice to European Economic Area Residents
78
Notice to United Kingdom Residents
78
Notice to Canadian Residents
79
Legal Matters
81
Experts
81
Where You Can Find More Information
81
Incorporation by Reference
81
EX-5.1
EX-23.1
ABOUT
    THIS PROSPECTUS
You should rely only on the information contained in, or
    incorporated by reference in, this prospectus or in any
    free-writing prospectus that we specifically authorize to be
    delivered or made available to you. We have not, the selling
    stockholders have not, and the underwriters have not authorized
    anyone to provide you with additional or different information.
    We and the selling stockholders are offering to sell, and
    seeking offers to buy, shares of common stock only in
    jurisdictions where offers and sales are permitted. You should
    assume that the information contained in, or incorporated by
    reference in, this prospectus or in any free-writing prospectus
    that we specifically authorize to be delivered or made available
    to you is accurate only as of the date of this prospectus,
    regardless of its time of delivery or of any sale of shares of
    our common stock. Our business, financial condition, results of
    operations and prospects may have changed since that date.
For investors outside the United States:
We have not, the
    selling stockholders have not and the underwriters have not done
    anything that would permit this offering or possession or
    distribution of this prospectus in any jurisdiction where action
    for that purpose is required, other than in the United States.
    Persons outside the United States who come into possession of
    this prospectus must inform themselves about, and observe any
    restrictions relating to, the offering of the shares of common
    stock and the distribution of this prospectus outside of the
    United States.
Table of Contents
PROSPECTUS
    SUMMARY
This summary highlights information contained elsewhere in or
    incorporated by reference into this prospectus. This summary
    sets forth the material terms of the offering, but does not
    contain all of the information that you should consider before
    investing in our common stock. You should read the entire
    prospectus and the documents that are incorporated by reference
    into this prospectus carefully before making an investment
    decision, especially the risks of investing in our common stock
    described under "Risk Factors." Unless the context
    otherwise requires, the terms "we," "us,"
    "our," "Grand Canyon," and "Grand
    Canyon Education" refer to Grand Canyon Education, Inc. and
    our predecessor as the context requires, and references to
    "Grand Canyon University" refer to the postsecondary
    education institution operated by Grand Canyon Education,
    Inc.
Overview
We are a regionally accredited provider of online postsecondary
    education services focused on offering graduate and
    undergraduate degree programs in our core disciplines of
    education, business, and healthcare. In addition to our online
    programs, we offer ground programs at our traditional campus in
    Phoenix, Arizona and onsite at the facilities of employers. We
    are committed to providing an academically rigorous educational
    experience with a focus on career-oriented programs that meet
    the objectives of our students. We utilize an integrated,
    innovative approach to marketing, recruiting, and retaining
    students, which has enabled us to increase enrollment from
    approximately 3,000 students at the end of 2003 to approximately
    27,600 students at June 30, 2009, representing a compound
    annual growth rate of approximately 50% over that period and an
    increase of 67% over the approximately 16,500 students we had at
    June 30, 2008. At December 31, 2008, 89.1% of our
    students were enrolled in our online programs, and 52.9% of our
    students were pursuing master's or doctoral degrees.
Our three core disciplines of education, business, and
    healthcare represent large markets with attractive employment
    opportunities. According to a March 2009 report from the
    U.S. Department of Education, National Center for Education
    Statistics, or NCES, these disciplines ranked as three of the
    four most popular fields of postsecondary education, based on
    degrees conferred in the
2006-07
school year. The U.S. Department of Labor, Bureau of Labor
    Statistics, or BLS, estimated in its
2008-09
Career Guide that these fields comprised over 40 million
    jobs in 2006, many of which require postsecondary education
    credentials.
We primarily focus on recruiting and educating working adults,
    whom we define as students age 25 or older who are pursuing
    a degree while employed. As of June 30, 2009, approximately
    90% of our online students were age 25 or older. We believe
    that working adults are attracted to the convenience and
    flexibility of our online programs because they can study and
    interact with faculty and classmates during times that suit
    their schedules. We also believe that working adults represent
    an attractive student population because they are better able to
    finance their education, more readily recognize the benefits of
    a postsecondary degree, and have higher persistence and
    completion rates than students generally.
We have experienced significant growth in enrollment, net
    revenue, and operating income over the last several years. Our
    enrollment at December 31, 2008 was approximately 24,600,
    representing an increase of approximately 67% over our
    enrollment at December 31, 2007. Our net revenue and
    operating income for the year ended December 31, 2008 were
    $161.3 million and $12.8 million, respectively,
    representing increases of 62.4% and 194.5%, respectively, over
    the year ended December 31, 2007. Our enrollment at
    June 30, 2009 was approximately 27,600, representing an
    increase of approximately 67% over our enrollment at
    June 30, 2008. Our net revenue and operating income for the
    six months ended June 30, 2009 were $118.4 million and
    $22.0 million, respectively, representing increases of
    68.4% and 248.0%, respectively, over the six months ended
    June 30, 2008. We seek to achieve continued growth in a
    manner that reinforces our reputation for providing academically
    rigorous, career-oriented educational programs that advance the
    careers of our students.
1
Table of Contents
We have been regionally accredited by the Higher Learning
    Commission of the North Central Association of Colleges and
    Schools, or the Higher Learning Commission, and its predecessor
    since 1968, and we were reaccredited by the Higher Learning
    Commission in 2007 for the maximum term of ten years. In
    addition, we have specialized accreditations for certain
    programs from the Association of Collegiate Business Schools and
    Programs, the Commission on Collegiate Nursing Education, and
    the Commission on Accreditation of Athletic Training Education.
    We believe that our regional accreditation, together with these
    specialized accreditations, reflect the quality of our programs,
    enhance their marketability, and improve the employability of
    our graduates.
We were founded as Grand Canyon College, a traditional, private,
    non-profit college, in 1949 and moved to our existing campus in
    Phoenix, Arizona in 1951. In February 2004, several of our
    current stockholders acquired Grand Canyon University and
    converted it to a for-profit institution. Since then, we have
    enhanced our senior management team, expanded our online
    platform and programs, and initiated an infrastructure and
    technology improvement plan and a marketing and branding effort
    to further differentiate us in the markets in which we operate
    and support our continued growth. We have also maintained our
non-denominational
Christian identity, with many of our ground programs including
    Christian study requirements and our online programs including
    ethics requirements and electives in religion.
Industry
The United States market for postsecondary education represents
    a large and growing opportunity. According to the March 2009
    NCES report, total revenue for all degree-granting postsecondary
    institutions was over $411 billion for the
2005-06
school year. In addition, according to a March 2009 NCES
    report, approximately 18.2 million students were projected
    to be enrolled in postsecondary institutions in 2008 and the
    number was projected to grow to 20.1 million by 2017. We
    believe that future growth in this market will be driven, in
    part, by the increasing number of job openings in occupations
    that require bachelor's or master's degrees, which a
    November 2007 report based on BLS data has projected will grow
    approximately 17% and 19%, respectively, between 2006 and 2016,
    or nearly double the growth rate the BLS projected for
    occupations that do not require postsecondary degrees. Moreover,
    according to U.S. Census Bureau data, individuals with a
    postsecondary degree are able to obtain a significant
    compensation premium relative to individuals without a degree.
The market for online postsecondary education has grown more
    rapidly than the overall postsecondary market. A 2008 study by
    Eduventures, LLC, an education consulting and research firm,
    projected that from 2002 to 2008 enrollment in online
    postsecondary programs increased from approximately
    0.4 million to approximately 1.9 million, representing
    a compound annual growth rate of approximately 28.6%. In
    comparison, in March 2009 the NCES projected a compound annual
    growth rate of 1.5% in enrollment in postsecondary programs
    overall during the same period. We believe this growth has been
    driven by a number of factors, including the greater convenience
    and flexibility of online programs as compared to ground-based
    programs and the increased acceptance of online programs among
    academics and employers. According to a 2006 survey by the Sloan
    Consortium, a trade group focused on online education, 79.1% of
    chief academic officers surveyed at institutions with 15,000 or
    more students, most of which offer online programs, and 61.9% of
    all chief academic officers surveyed, believe that online
    learning outcomes are equal or superior to traditional
face-to-face
instruction.
Competitive
    Strengths
We believe we have the following competitive strengths:
Established presence in targeted, high demand
    disciplines.
We have an established presence
    within our three core disciplines of education, business, and
    healthcare. We believe our focused approach enables us to
2
Table of Contents
develop our academic reputation and brand identity within our
    core disciplines, recruit and retain quality faculty and staff
    members, and meet the educational and career objectives of our
    students.
Focus on graduate degrees for working
    adults.
We have designed our program offerings
    and our online delivery platform to meet the needs of working
    adults, particularly those seeking graduate degrees to obtain
    pay increases or job promotions that are directly tied to higher
    educational attainment.
Campus-based tradition that complements online
    capabilities.
We believe that our
60-year
heritage as a traditional campus-based university complements
    our online capabilities, attracts students who seek to affiliate
    with a traditional university, enhances the reputation of our
    degree programs among prospective students and employers, and
    differentiates us in the for-profit postsecondary market.
Commitment to offering academically rigorous, career-oriented
    programs.
We are committed to offering
    academically rigorous educational programs that are designed to
    help our students achieve their career objectives. Our programs
    are taught by qualified faculty, substantially all of whom hold
    at least a master's degree and often have practical
    experience in their respective fields.
Innovative marketing, recruiting, and retention
    strategy.
We have developed an integrated,
    innovative approach to student marketing, recruitment, and
    retention to reach our targeted students. We also proactively
    provide support to students at key points during their
    consideration of, and enrollment at, Grand Canyon University to
    enhance the probability of student enrollment and retention.
Experienced executive management team with strong operating
    track-record.
Our executive management team
    possesses extensive experience in the management and operation
    of publicly-traded for-profit, postsecondary education
    companies, as well as other educational services businesses,
    including in the areas of marketing to, recruiting, and
    retaining students pursuing online and other distance education
    degree offerings, and in online content development.
Growth
    Strategies
We intend to pursue the following growth strategies:
Increase enrollment in existing programs.
We
    intend to increase enrollment in existing programs within our
    three core disciplines, which we believe offer ample opportunity
    for growth. We also intend to increase the number of our
    enrollment counselors and marketing and student services
    personnel to drive enrollment growth and enhance student
    retention.
Expand online program and degree offerings consistent with
    student and employment demand trends.
We develop
    and offer new programs that we believe have attractive demand
    characteristics and that are consistent with employment trends
    in the country. In this regard, we seek to develop additional
    programs in healthcare, education, business and liberal arts
    that are relevant to employers in these fields.
Continue to enhance the profile and reputation of our
    traditional ground campus.
We intend to continue
    to enhance the profile and reputation of our traditional ground
    campus by leveraging the capabilities of our full-time ground
    faculty, attracting additional faculty with strong academic
    credentials, expanding upon and modernizing our campus
    infrastructure and technological capabilities, and strengthening
    our athletic programs. We believe these activities will continue
    to sustain and enhance the reputation of our programs and help
    drive, and support, increased ground and online enrollments.
Further enhance our brand recognition.
We
    continue to enhance our brand recognition by pursuing online and
    offline marketing campaigns, developing our ground campus and
    traditional university programs to increase awareness of the
    university, establishing strategic branding relationships with
    recognized industry leaders, and developing complementary
    resources in our core disciplines that increase the overall
    awareness of our offerings.
3
Table of Contents
Leverage infrastructure and drive earnings
    growth.
We have made and will continue to make
    significant investments in our people, processes, and technology
    infrastructure. We believe that these investments have prepared
    us to deliver our academic programs to a much larger student
    population with only modest incremental investment, and have
    also enabled us to increase the effectiveness of our academic,
    administrative and student services in ways that will assist in
    our efforts to increase student success and retention levels. We
    intend to continue leveraging our historical investments over
    our increasing enrollment, which we believe will allow us to
    increase our operating margins over time.
Expand relationships with private sector and government
    employers.
We seek additional relationships with
    health care systems, school districts, emergency services
    providers, and other employers through which we market our
    offerings to their employees. These relationships provide leads
    for our programs, build our recognition among employers in our
    core disciplines, and enable us to identify new programs and
    degrees that are in demand by students and employers.
Risks
    Affecting Us
Our business is subject to numerous risks, as discussed more
    fully in the section entitled "Risk Factors"
    immediately following this Prospectus Summary. In particular,
    our business would be adversely affected if:
•
we are unable to attract and retain students as a result of the
    highly competitive markets in which we operate;
•
we are unable to comply with the constantly evolving and
    extensive regulatory requirements to which our business is
    subject, including requirements governing the Title IV
    federal student financial aid programs, state laws and
    regulations, and accrediting commission requirements;
•
we experience any student, regulatory, reputational, or other
    events that adversely affect our degree offerings;
•
we experience a change in control under applicable regulatory or
    accrediting standards, and we are unable to obtain appropriate
    approvals for such an event in a timely manner, or at all;
•
we experience damage to our reputation or other adverse effects
    in connection with any compliance audit; regulatory action;
    investigation, including the investigation of Grand Canyon
    University currently being conducted by the Office of Inspector
    General of the U.S. Department of Education; or litigation,
    including the pending
qui tam
action regarding the manner
    in which we have compensated our enrollment personnel;
•
we experience damage to our reputation or other adverse effects
    as a result of negative publicity in the media, in industry or
    governmental reports, or otherwise, affecting us or other
    companies in the for-profit postsecondary education sector;
•
we are unable to attract and retain key personnel needed to
    sustain and grow our business;
•
our students are unable to obtain student loans on affordable
    terms, or at all;
•
adverse economic or other developments affect demand in our core
    disciplines; or
•
we are unable to develop new programs or expand our existing
    programs in a timely and cost-effective manner.
Corporate
    Information
We were formed in Delaware in November 2003 for the purpose of
    acquiring the assets of Grand Canyon University. Our principal
    executive offices are located at 3300 West Camelback Road,
    Phoenix, Arizona 85017, and our telephone number is
(602) 639-7500.
Our website is located at
www.gcu.edu
. The information
    on, or accessible through, our website does not constitute part
    of, and is not incorporated into, this prospectus.
4
Table of Contents
Accreditation
We are accredited by the Higher Learning Commission of the North
    Central Association of Colleges and Schools,
    30 N. LaSalle Street, Suite 2400, Chicago,
    Illinois
60602-2504;
telephone
(312) 263-0456;
website
www.ncahlc.org
. The information on, or accessible
    through, the website of the Higher Learning Commission does not
    constitute part of, and is not incorporated into, this
    prospectus.
Industry
    Data
We use market data and industry forecasts and projections
    throughout this prospectus, which we have obtained from market
    research, publicly-available information and private industry
    publications. These sources generally state that the information
    they provide has been obtained from sources believed to be
    reliable, but that the accuracy and completeness of the
    information are not guaranteed. The forecasts and projections
    are based on industry surveys and the preparers' experience
    in the industry as of the time they were prepared, which in some
    cases preceded the current economic downturn, and there is no
    assurance that any of the projected numbers will be reached.
    Similarly, we believe that the surveys and market research
    others have completed are reliable, but we have not
    independently verified their findings.
5
Table of Contents
OFFERING
    SUMMARY
Common stock offered by us
1,000,000 shares
Common stock offering by the selling stockholders
shares
Total common stock offered
shares
Total common stock outstanding after this offering
45,576,417 shares
Use of proceeds
We estimate that the proceeds to us from this offering will be
    approximately $      million,
    based on an assumed offering price of
    $      per share, which is the closing
    price of our common stock as reported on The Nasdaq Global
    Market on August   , 2009 and after deducting the
    underwriting discounts and commissions and estimated offering
    expenses payable by us. We intend to use the proceeds to us from
    this offering to pay the fees and expenses of this offering that
    are payable by us, and for working capital and other general
    corporate purposes. See "Use of Proceeds." We will not
    receive any proceeds from the shares sold by the selling
    stockholders.
Risk factors
You should carefully read and consider the information set forth
    under the section titled "Risk Factors" and all other
    information set forth in or incorporated by reference into this
    prospectus before deciding to invest in shares of our common
    stock.
Nasdaq Global Market symbol
LOPE
The number of shares of our common stock to be outstanding
    following this offering is based on 44,576,417 shares of
    our common stock outstanding as of June 30, 2009. This
    number does not include:
•
3,310,532 shares of common stock issuable upon the exercise
    of stock options outstanding as of June 30, 2009 under our
    equity incentive plan, with a weighted average exercise price of
    $12.11 per share;
•
22,377 shares of common stock that were issued upon the
    exercise of stock options subsequent to June 30,
    2009; and
•
1,956,107 shares of common stock reserved for future
    issuance under our equity incentive plan as of June 30,
    2009.
Unless otherwise indicated, the information in this prospectus
    reflects and assumes no exercise by the underwriters of their
    option to purchase up to an
    additional           shares
    of our common stock from certain of the selling stockholders to
    cover over-allotments, if any.
6
Table of Contents
SUMMARY
    FINANCIAL AND OTHER DATA
The following table sets forth our summary financial and other
    data as of the dates and for the periods indicated. The
    statement of operations and other data, excluding period end
    enrollment, for each of the years in the three-year period ended
    December 31, 2008, have been derived from our audited
    financial statements, which are included with our Annual Report
    on
Form 10-K
for the year ended December 31, 2008, which is incorporated
    by reference into this prospectus. The statement of operations
    and other data, excluding period end enrollment, for each of the
    six month periods ended June 30, 2008 and 2009, and the
    balance sheet data as of June 30, 2009, have been derived
    from our unaudited financial statements, which are included with
    our Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2009, which is incorporated
    by reference into this prospectus. In the opinion of management,
    our unaudited financial statements include all adjustments,
    consisting of normal, recurring adjustments, necessary for a
    fair presentation of such data. Our historical results are not
    necessarily indicative of our results for any future period.
You should read the following summary financial and other data
    in conjunction with "Selected Financial and Other
    Data," "Management's Discussion and Analysis of
    Financial Condition and Results of Operations," and our
    financial statements and related notes, all of which are
    incorporated by reference into this prospectus.
Year Ended December 31,
Six Months Ended June 30,
2006
2007
2008
2008
2009
(Unaudited)
(In thousands, except enrollment
and per share data)
Statement of Operations Data:
Net revenue
$
72,111
$
99,326
$
161,309
$
70,275
$
118,364
Costs and expenses:
Instructional costs and services
31,287
39,050
54,450
24,028
38,379
Selling and promotional
20,093
35,148
65,551
27,473
40,301
General and administrative
15,011
17,001
26,825
10,960
17,521
Royalty to former owner
2,678
3,782
1,686
1,488
148
Total costs and expenses
69,069
94,981
148,512
63,949
96,349
Operating income
3,042
4,345
12,797
6,326
22,015
Interest expense
(2,827
)
(2,975
)
(2,897
)
(1,507
)
(1,087
)
Interest income
912
1,172
640
432
229
Income before income taxes
1,127
2,542
10,540
5,251
21,157
Income tax expense
529
1,016
3,855
2,027
8,439
Net income
598
1,526
6,685
3,224
12,718
Preferred dividends
(527
)
(349
)
(938
)
(521
)
—
Net income available to common stockholders
$
71
$
1,177
$
5,747
$
2,703
$
12,718
Earnings per common share
Basic
$
0.00
$
0.06
$
0.26
$
0.14
$
0.28
Diluted
$
0.00
$
0.03
$
0.17
$
0.08
$
0.28
Shares used in computing earnings per common share
Basic
18,853
18,923
22,185
19,089
45,159
Diluted
36,858
35,143
33,430
32,623
45,437
Other Data:
Capital expenditures
$
2,387
$
7,406
$
8,374
$
3,504
$
11,111
Purchase of campus land and buildings
$
—
$
—
$
—
$
—
$
35,505
Depreciation and amortization
$
2,396
$
3,300
$
5,095
$
2,269
$
3,386
Adjusted
    EBITDA
(1)
$
9,074
$
11,723
$
25,675
$
10,294
$
26,978
Period end enrollment:
Online
8,406
12,497
21,955
14,847
26,234
Ground
2,256
2,257
2,681
1,663
1,388
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As of June 30, 2009
Actual
As
    Adjusted
(2)
(Unaudited)
(In thousands)
Balance Sheet Data:
Cash, cash equivalents and investments — unrestricted
$
25,225
$
Cash and cash equivalents — restricted
6,230
Total assets
126,506
Capital lease obligations (including short-term)
2,013
Other indebtedness (including short-term indebtedness)
27,681
Total stockholders' equity
53,965
(1)
Adjusted EBITDA is defined as net income (loss) plus interest
    expense net of interest income, plus income tax expense
    (benefit), and plus depreciation and amortization (EBITDA), as
    adjusted for (i) royalty payments incurred pursuant to an
    agreement with our former owner that has been terminated as of
    April 15, 2008, as discussed in "Management's
    Discussion and Analysis of Financial Condition and Results of
    Operations — Factors affecting
    comparability — Settlement with former owner"
    included with our Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2009, which is incorporated
    by reference into this prospectus; (ii) management fees and
    expenses that are no longer paid; (iii) contributions made
    to Arizona school tuition organizations in lieu of the payment
    of state income taxes; and (iv) share-based compensation.
We present Adjusted EBITDA because we consider it to be an
    important supplemental measure of our operating performance. We
    also make certain compensation decisions based, in part, on our
    operating performance, as measured by Adjusted EBITDA, and our
    loan agreement requires us to comply with covenants that include
    performance metrics substantially similar to Adjusted EBITDA.
    All of the adjustments made in our calculation of Adjusted
    EBITDA are adjustments to items that management does not
    consider to be reflective of our core operating performance.
    Management considers our core operating performance to be that
    which can be affected by our managers in any particular period
    through their management of the resources that affect our
    underlying revenue and profit generating operations during that
    period. Management fees and expenses, royalty expenses paid to
    our former owner, financing arrangements, and share-based
    compensation are not considered reflective of our core operating
    performance.
Our management uses Adjusted EBITDA:
•
in developing our internal budgets and strategic plan;
•
as a measurement of operating performance;
•
as a factor in evaluating the performance of our management for
    compensation purposes;
•
to, in part, assess compliance with our loan agreement; and
•
in presentations to the members of our Board of Directors to
    enable our board to have the same measurement basis of operating
    performance as are used by management to compare our current
    operating results with corresponding prior periods and with the
    results of other companies in our industry.
However, Adjusted EBITDA is not a recognized measurement under
    GAAP, and when analyzing our operating performance, investors
    should use Adjusted EBITDA in addition to, and not as an
    alternative for, net income, operating income, or any other
    performance measure presented in accordance with GAAP, or as an
    alternative to cash flow from operating activities or as a
    measure of our liquidity. Because not all companies use
    identical calculations, our presentation of Adjusted EBITDA may
    not be comparable to similarly titled measures of other
    companies. Adjusted EBITDA has limitations as an analytical
    tool, as discussed under "Management's Discussion and
    Analysis of Financial Condition and
8
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Results of Operations — Non-GAAP Discussion"
    included with our Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2009, which is incorporated
    by reference into this prospectus.
The following table presents data relating to Adjusted EBITDA,
    which is a non-GAAP measure, for the periods indicated:
Year Ended December 31,
Six Months Ended June 30,
2006
2007
2008
2008
2009
(Unaudited)
(In thousands)
Net income
$
598
$
1,526
$
6,685
$
3,224
$
12,718
Plus: interest expense net of interest income
1,915
1,803
2,257
1,075
858
Plus: income tax expense
529
1,016
3,855
2,027
8,439
Plus: depreciation and amortization
2,396
3,300
5,095
2,269
3,238
EBITDA
5,438
7,645
17,892
8,595
25,253
Plus: royalty to former
    owner
(a)
2,678
3,782
1,686
1,488
148
Plus: management fees and
    expenses
(b)
958
296
356
211
—
Plus: contributions made in lieu of state income
    taxes
(c)
—
—
750
—
—
Plus: share-based
    compensation
(d)
—
—
4,991
—
1,577
Adjusted EBITDA
$
9,074
$
11,723
$
25,675
$
10,294
$
26,978
(a)
Reflects the royalty fee arrangement with the former owner of
    Grand Canyon University in which we agreed to pay a stated
    percentage of cash revenue generated by our online programs. As
    a result of the settlement of a dispute with the former owner,
    we are no longer obligated to pay this royalty, although the
    settlement includes a prepayment of future royalties that will
    be amortized in 2008 and future periods. See
    "Management's Discussion and Analysis of Financial
    Condition and Results of Operations — Factors
    affecting comparability — Settlement with former
    owner" included with our Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2009, which is incorporated
    by reference into this prospectus.
(b)
Reflects management fees and expenses of $0.3 million,
    $0.3 million, and $0.4 million for the years ended
    December 31, 2006, 2007, and 2008, respectively, and
    $0.2 million for the six months ended June 30, 2008,
    to the general partner of Endeavour Capital Fund IV, L.P.,
    one of our significant stockholders, and an aggregate of
    $0.7 million for the year ended December 31, 2006, to
    an entity affiliated with a former director and another
    affiliated with a significant stockholder, in each case
    following their investment in us. The agreements relating to
    these arrangements have all terminated.
(c)
Reflects contributions made in 2008 to various Arizona school
    tuition organizations to assist with funding for education. In
    connection with such contributions, we received a
dollar-for-dollar
state income tax credit, which resulted in a reduction in our
    effective income tax rate to 36.6% for the year ended
    December 31, 2008. Had this payment not been made, our
    effective tax rate would have been 40.8%. Such contributions
    were made in lieu of payments of state income taxes and are
    therefore excluded from evaluation of our core operating
    performance for the year ended December 31, 2008.
(d)
Reflects share-based compensation expense relating to stock and
    option grants made to employees and directors in connection with
    our initial public offering and thereafter.
(2)
As adjusted to give effect to the sale
    of           shares
    of common stock by us in this offering at an assumed offering
    price of $      per share, which is the
    closing price of our common stock as reported on The Nasdaq
    Global Market on August   , 2009, and the receipt
    by us of the estimated net proceeds of that sale after deducting
    underwriting discounts and commissions and estimated offering
    expenses payable by us.
9
Table of Contents
RISK
    FACTORS
Investing in our common stock involves a high degree of risk.
    Before making an investment in our common stock, you should
    carefully consider the following risks and the other information
    contained in or incorporated by reference into this prospectus,
    including our financial statements and related notes,
    "Management's Discussion and Analysis of Financial
    Condition and Results of Operations," and
    "Regulation." See "Where You Can Find More
    Information" and "Incorporation By Reference."
    The risks described below are those that we believe are the
    material risks we face. Any of the risk factors described below,
    and others that we did not anticipate, could significantly and
    adversely affect our business, prospects, financial condition,
    results of operations, and cash flows. As a result, the trading
    price of our common stock could decline and you may lose all or
    part of your investment.
Risks
    Related to the Regulation of Our Industry
Our
    failure to comply with the extensive regulatory requirements
    governing our school could result in financial penalties,
    restrictions on our operations or growth, or loss of external
    financial aid funding for our students.
For our fiscal years ended December 31, 2007 and 2008, we
    derived cash receipts equal to approximately 70.2% and 74.4%,
    respectively, of our net revenue from tuition financed under
    federal student financial aid programs authorized under
    Title IV of the Higher Education Act of 1965, as amended,
    referred to in this prospectus as the Title IV programs,
    which are administered by the U.S. Department of Education,
    or the Department of Education. To participate in the
    Title IV programs, a school must be authorized by the
    appropriate state education agency or agencies, be accredited by
    an accrediting commission recognized by the Department of
    Education, and be certified as an eligible institution by the
    Department of Education. In addition, our operations and
    programs are regulated by other state education agencies and
    additional accrediting commissions. As a result of these
    requirements, we are subject to extensive regulation by the
    Arizona State Board for Private Postsecondary Education and
    education agencies of other states, the Higher Learning
    Commission, which is our primary accrediting commission,
    specialized accrediting commissions, and the Department of
    Education. These regulatory requirements cover the vast majority
    of our operations, including our educational programs,
    instructional and administrative staff, administrative
    procedures, marketing, recruiting, financial operations, and
    financial condition. These regulatory requirements also affect
    our ability to open additional schools and locations, add new
    educational programs, change existing educational programs, and
    change our corporate or ownership structure. The agencies that
    regulate our operations periodically revise their requirements
    and modify their interpretations of existing requirements.
    Regulatory requirements are not always precise and clear, and
    regulatory agencies may sometimes disagree with the way we have
    interpreted or applied these requirements. Any misinterpretation
    by us of regulatory requirements could materially adversely
    affect us.
If we fail to comply with any of these regulatory requirements,
    we could suffer financial penalties, limitations on our
    operations, loss of accreditation, termination of or limitations
    on our ability to grant degrees and certificates, or limitations
    on or termination of our eligibility to participate in the
    Title IV programs, each of which could materially adversely
    affect us. In addition, if we are charged with regulatory
    violations, our reputation could be damaged, which could have a
    negative impact on our stock price and our enrollments. We
    cannot predict with certainty how all of these regulatory
    requirements will be applied, or whether we will be able to
    comply with all of the applicable requirements in the future.
If the
    Department of Education does not recertify us to continue
    participating in the Title IV programs, our students would
    lose their access to Title IV program funds, or we could be
    recertified but required to accept significant limitations as a
    condition of our continued participation in the Title IV
    programs.
Department of Education certification to participate in the
    Title IV programs lasts a maximum of six years, and
    institutions are thus required to seek recertification from the
    Department of Education on a regular basis in order to continue
    their participation in the Title IV programs. An
    institution must also apply for recertification by the
    Department of Education if it undergoes a change in control, as
    defined by Department
10
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of Education regulations, and may be subject to similar review
    if it expands its operations or educational programs in certain
    ways.
Our most recent recertification, which was issued on a
    provisional basis in May 2005 after an extended review by the
    Department of Education following the change in control that
    occurred in February 2004, contained a number of conditions on
    our continued participation in the Title IV programs. At
    that time we were required by the Department of Education to
    post a letter of credit, accept restrictions on the growth of
    our program offerings and enrollment, and receive certain
    Title IV funds under the heightened cash monitoring system
    of payment (pursuant to which an institution is required to
    credit students with Title IV funds prior to obtaining
    those funds from the Department of Education) rather than by
    advance payment (pursuant to which an institution receives
    Title IV funds from the Department of Education in advance
    of disbursement to students). In 2006 and 2007, the Department
    of Education eliminated the letter of credit requirement,
    allowed the growth restrictions to expire, eliminated the
    heightened cash monitoring restrictions and returned us to the
    advance payment method. We submitted our application for
    recertification to participate in the Title IV programs to
    the Department of Education in March 2008 in anticipation of the
    expiration of our provisional certification on June 30,
    2008. The Department of Education did not make a decision on our
    recertification application by June 30, 2008 and therefore
    our provisional certification to participate in the
    Title IV programs has been automatically extended on a
month-to-month
basis until the Department of Education makes its decision. See
    "Regulation — Regulation of Federal Student
    Financial Aid Programs — Eligibility and certification
    procedures." There can be no assurance that the Department
    of Education will recertify us while the investigation by the
    Office of Inspector General of the Department of Education is
    being conducted, while the qui tam lawsuit is pending, or at
    all, or that it will not impose restrictions as a condition to
    approving our pending recertification application or with
    respect to any future recertification. See "— The
    Office of Inspector General of the Department of Education has
    commenced an investigation of Grand Canyon University, which is
    ongoing and which may result in fines, penalties, other
    sanctions, and damage to our reputation in the industry"
    and "— A qui tam lawsuit has been filed against
    us alleging, among other things, that we have improperly
    compensated certain of our enrollment counselors, and we may
    incur liability, be subject to sanctions, or experience damage
    to our reputation as a result of this lawsuit." If the
    Department of Education does not renew or withdraws our
    certification to participate in the Title IV programs at
    any time, our students would no longer be able to receive
    Title IV program funds. Similarly, the Department of
    Education could renew our certification, but restrict or delay
    our students' receipt of Title IV funds, limit the
    number of students to whom we could disburse such funds, or
    place other restrictions on us that could be similar to, or more
    or less restrictive than, the restrictions that Department of
    Education imposed on us in connection with our recertification
    in 2005. Any of these outcomes would have a material adverse
    effect on our enrollments and us.
The
    Office of Inspector General of the Department of Education has
    commenced an investigation of Grand Canyon University, which is
    ongoing and which may result in fines, penalties, other
    sanctions, and damage to our reputation in the
    industry.
The Office of Inspector General of the Department of Education
    is responsible for, among other things, promoting the
    effectiveness and integrity of the Department of
    Education's programs and operations, including compliance
    with applicable statutes and regulations. The Office of
    Inspector General performs investigations of alleged violations
    of law, including cases of alleged fraud and abuse, or other
    identified vulnerabilities, in programs administered or financed
    by the Department of Education. On August 14, 2008, the
    Office of Inspector General served an administrative subpoena on
    Grand Canyon University requiring us to provide certain records
    and information related to performance reviews and salary
    adjustments for all of our enrollment counselors and managers
    from January 1, 2004 to the present. The Office of
    Inspector General's investigation is focused on whether we
    have compensated any of our enrollment counselors or managers in
    a manner that violated the Title IV statutory requirements
    or the related Department of Education regulations concerning
    the payment of incentive compensation based on success in
    securing enrollments or financial aid. See
    "Regulation — Regulation of Federal Student
    Financial Aid Programs — Incentive compensation
    rule."
We have been cooperating with the Office of Inspector General to
    facilitate its investigation and have completed production of
    all requested documents. We cannot presently predict the
    ultimate outcome of the investigation or any liability or other
    sanctions that may result. The outcome of the Office of
    Inspector
11
Table of Contents
General investigation may depend in part on information
    contained in the materials we produced or information or
    testimony provided by former employees or other third parties.
The Department of Education may impose fines and other monetary
    penalties as a result of a violation of the incentive
    compensation law and such fines and other monetary penalties may
    be substantial. In addition, the Department of Education retains
    the authority to impose other sanctions on an institution for
    violations of the incentive compensation law. The possible
    effects of a determination of a regulatory violation are
    described more fully in "Regulation — Regulation
    of Federal Student Financial Aid Programs — Potential
    effect of regulatory violations." Any such fine or other
    sanction could damage our reputation and impose significant
    costs on us, which could have a material adverse effect on our
    business, prospects, financial condition, and results of
    operations.
A qui
    tam lawsuit has been filed against us alleging, among other
    things, that we have improperly compensated certain of our
    enrollment counselors, and we may incur liability, be subject to
    sanctions, or experience damage to our reputation as a result of
    this lawsuit.
On September 11, 2008, we were served with a
qui tam
lawsuit that had been filed against us in August 2007, in
    the United States District Court for the District of Arizona by
    a then-current employee on behalf of the federal government. All
    proceedings in the lawsuit had been under seal until
    September 5, 2008, when the court unsealed the first
    amended complaint, which had been filed on August 11, 2008.
    A
qui tam
case is a civil lawsuit brought by one or more
    individuals (a "relator") on behalf of the federal
    government for an alleged submission to the government of a
    false claim for payment. The relator, often a current or former
    employee, is entitled to a share of the government's
    recovery in the case. A
qui tam
action is always filed
    under seal and remains under seal until the government decides
    whether to intervene in the case. If the government intervenes,
    it takes over primary control of the litigation. If the
    government declines to intervene in the case, the relator may
    nonetheless elect to continue to pursue the litigation at his or
    her own expense on behalf of the government. In our case, the
qui tam
lawsuit was initially filed under seal in August
    2007 and was unsealed and served on us following the
    government's decision not to intervene at that time.
The
qui tam
lawsuit alleges, among other things, that we
    violated the False Claims Act by knowingly making false
    statements, and submitting false records or statements, from at
    least 2001 to the present, to get false or fraudulent claims
    paid or approved, and asserts that we have improperly
    compensated certain of our enrollment counselors in violation of
    the Title IV law governing compensation of such employees,
    and as a result, improperly received Title IV program
    funds. See "Regulation — Regulation of Federal
    Student Financial Aid Programs — Incentive
    compensation rule." The complaint specifically alleges that
    some of our compensation practices with respect to our
    enrollment personnel, including providing non-cash awards, have
    violated the Title IV law governing compensation. While we
    believe that our compensation policies and practices at issue in
    the complaint have not been based on success in enrolling
    students in violation of applicable law, the Department of
    Education's regulations and interpretations of the
    incentive compensation law do not establish clear criteria for
    compliance in all circumstances and some of our practices,
    including in respect of non-cash awards, have not been within
    the scope of any specific "safe harbor" provided in
    the compensation regulations. The complaint seeks treble the
    amount of unspecified damages sustained by the federal
    government in connection with our receipt of Title IV
    funding, a civil penalty for each violation of the False Claims
    Act, attorneys' fees, costs, and interest. We filed a
    motion to dismiss this case in November 2008, which was denied
    by the court in February 2009, and we have continued to
    vigorously contest this lawsuit. If it were determined that any
    of our compensation practices violated the incentive
    compensation law, we could experience an adverse outcome in the
qui tam
litigation and be subject to substantial monetary
    liabilities, fines, and other sanctions, any of which could have
    a material adverse effect on our business, prospects, financial
    condition and results of operations and could adversely affect
    our stock price. We cannot presently predict the ultimate
    outcome of this
qui tam
case or any liability or other
    sanctions that may result. It is possible that during the course
    of the litigation or the related Office of Inspector General
    investigation other information may be discovered that would
    adversely affect the outcome of the litigation.
12
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Pursuant to the court's mandatory scheduling order, we have
    entered into settlement discussions with respect to the
qui
    tam
matter with the relator. In connection with such
    discussions, we are negotiating for a comprehensive settlement
    that would include, among other things, the resolution by the
    Office of Inspector General of its investigation. Accordingly,
    any such settlement would need to be approved not only by the
    relator, but by the U.S. Department of Justice (which has
    authority to approve settlements of False Claims Act matters),
    and the Department of Education. While we cannot assure you that
    this matter will be settled on terms acceptable to us or at all,
    we do not believe that any potential settlement, if in the
    amount (which we believe is generally in the range of other
    settlements of similar
qui tam
litigation against other
    for-profit education companies) and on the terms currently under
    discussion, will materially adversely affect our business,
    operations, or liquidity, although any charge taken in
    connection with such a potential settlement would likely be
    material to our operating results and cash flow for the periods
    affected by the charge. If such settlement does not occur, we
    would continue to vigorously defend this lawsuit.
Congress
    may change the eligibility standards or reduce funding for the
    Title IV programs, which could reduce our student
    population, revenue, and profit margin.
Political and budgetary concerns significantly affect the
    Title IV programs. The Higher Education Act, which is the
    federal law that governs the Title IV programs, must be
    periodically reauthorized by Congress, and was most recently
    reauthorized in August 2008. The new law contains numerous
    revisions to the requirements governing the Title IV
    programs. See "Regulation — Regulation of Federal
    Student Financial Aid Programs." In addition, Congress must
    determine funding levels for the Title IV programs on an
    annual basis, and can change the laws governing the
    Title IV programs at any time. Because a significant
    percentage of our revenue is derived from the Title IV
    programs, any action by Congress that significantly reduces
    Title IV program funding or our ability or the ability of
    our students to participate in the Title IV programs, or
    otherwise requires us to modify our practices with respect to
    Title IV programs, could increase our costs of compliance,
    reduce the ability of some students to finance their education
    at our institution, require us to seek to arrange for other
    sources of financial aid for our students, and materially
    decrease our student enrollment, each of which could have a
    material adverse effect on us.
If we
    do not meet specific financial responsibility standards
    established by the Department of Education, we may be required
    to post a letter of credit or accept other limitations in order
    to continue participating in the Title IV programs, or we
    could lose our eligibility to participate in the Title IV
    programs.
To participate in the Title IV programs, an institution
    must either satisfy specific quantitative standards of financial
    responsibility prescribed by the Department of Education, or
    post a letter of credit in favor of the Department of Education
    and possibly accept operating restrictions as well. These
    financial responsibility tests are applied to each institution
    on an annual basis based on the institution's audited
    financial statements, and may be applied at other times, such as
    if the institution undergoes a change in control. These tests
    may also be applied to an institution's parent company or
    other related entity. The operating restrictions that may be
    placed on an institution that does not meet the quantitative
    standards of financial responsibility include being transferred
    from the advance payment method of receiving Title IV funds
    to either the reimbursement or the heightened cash monitoring
    system, which could result in a significant delay in the
    institution's receipt of those funds. For example, when we
    were recertified by the Department of Education to participate
    in the Title IV programs in May 2005, the Department of
    Education reviewed our fiscal year 2004 audited financial
    statements and advised us that our composite score under the
    Department of Education's financial responsibility formula
    reflected financial weakness. As a result of this and other
    concerns about our administrative capability, the Department of
    Education required us to post a letter of credit, accept
    restrictions on the growth of our program offerings and
    enrollment, and receive Title IV funds under the heightened
    cash monitoring system of payment rather than by advance
    payment. In 2006 and 2007, the Department of Education
    eliminated each of these requirements and restrictions. However,
    if, in the future, we fail to satisfy the Department of
    Education's financial responsibility standards, we could
    experience increased regulatory compliance costs or delays in
    our receipt of Title IV funds because we could be required
    to post a letter of credit or be subjected to operating
    restrictions, or both. Our failure to secure a letter of credit
    in these circumstances could cause us to lose our ability to
    participate in the Title IV programs, which would
    materially adversely affect us.
13
Table of Contents
If we
    do not comply with the Department of Education's
    administrative capability standards, we could suffer financial
    penalties, be required to accept other limitations in order to
    continue participating in the Title IV programs, or lose
    our eligibility to participate in the Title IV
    programs.
To continue participating in the Title IV programs, an
    institution must demonstrate to the Department of Education that
    the institution is capable of adequately administering the
    Title IV programs under specific standards prescribed by
    the Department of Education. These administrative capability
    criteria require, among other things, that the institution has
    an adequate number of qualified personnel to administer the
    Title IV programs, has adequate procedures for disbursing
    and safeguarding Title IV funds and for maintaining
    records, submits all required reports and financial statements
    in a timely manner, and does not have significant problems that
    affect the institution's ability to administer the
    Title IV programs. If we fail to satisfy any of these
    criteria, the Department of Education may assess financial
    penalties against us, restrict the manner in which we receive
    Title IV funds to us, require us to post a letter of
    credit, place us on provisional certification status, or limit
    or terminate our participation in the Title IV programs,
    any of which could materially adversely affect us.
We
    would lose our ability to participate in the Title IV
    programs if we fail to maintain our institutional accreditation,
    and our student enrollments could decline if we fail to maintain
    any of our accreditations or approvals.
An institution must be accredited by an accrediting commission
    recognized by the Department of Education in order to
    participate in the Title IV programs. We have institutional
    accreditation by the Higher Learning Commission, which is an
    accrediting commission recognized by the Department of
    Education. To remain accredited, we must continuously meet
    accreditation standards relating to, among other things,
    performance, governance, institutional integrity, educational
    quality, faculty, administrative capability, resources, and
    financial stability. We were reaccredited by the Higher Learning
    Commission in 2007, and the next scheduled comprehensive
    evaluation will be conducted in
2016-2017.
While, during the 2007 reaccreditation process, the Higher
    Learning Commission concluded that we were in compliance with
    its accreditation standards, it did note certain deficiencies to
    be addressed by us. See "Regulation —
    Accreditation." In February 2009, we filed a monitoring
    report with the Higher Learning Commission addressing our
    progress in resolving these deficiencies and in March 2009, we
    received notification from the Higher Learning Commission that
    our report was accepted and that no further reports are
    required. The Higher Learning Commission is currently reviewing
    our request to operate at nine additional off-campus sites. If
    we fail to satisfy any of the Higher Learning Commission's
    standards, we could lose our accreditation by the Higher
    Learning Commission, which would cause us to lose our
    eligibility to participate in the Title IV programs and
    could cause a significant decline in our total student
    enrollments and have a material adverse effect on us. In
    addition, many of our individual educational programs are also
    accredited by specialized accrediting commissions or approved by
    specialized state agencies. If we fail to satisfy the standards
    of any of those specialized accrediting commissions or state
    agencies, we could lose the specialized accreditation or
    approval for the affected programs, which could result in
    materially reduced student enrollments in those programs and
    have a material adverse effect on us.
If we
    do not maintain our state authorization in Arizona, we may not
    operate or participate in the Title IV
    programs.
A school that grants degrees or certificates must be authorized
    by the relevant education agency of the state in which it is
    located. We are located in the state of Arizona and are
    authorized by the Arizona State Board for Private Postsecondary
    Education. State authorization is also required for our students
    to be eligible to receive funding under the Title IV
    programs. To maintain our state authorization, we must
    continuously meet standards relating to, among other things,
    educational programs, facilities, instructional and
    administrative staff, marketing and recruitment, financial
    operations, addition of new locations and educational programs,
    and various operational and administrative procedures. If we
    fail to satisfy any of these standards, we could lose our
    authorization by the Arizona State Board for Private
    Postsecondary Education to offer our
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educational programs, which would also cause us to lose our
    eligibility to participate in the Title IV programs and
    have a material adverse effect on us.
If any
    of the education regulatory agencies that regulate us do not
    approve or delay their approval of any transaction involving us
    that constitutes a "change in control," our ability to
    operate or participate in the Title IV programs may be
    impaired.
If we experience a change in control under the standards of the
    Department of Education, the Higher Learning Commission, the
    Arizona State Board for Private Postsecondary Education, or any
    other applicable state education agency or accrediting
    commission, we must notify and/or seek the approval of each such
    agency. These agencies do not have uniform criteria for what
    constitutes a change in control. Transactions or events that
    typically constitute a change in control include significant
    acquisitions or dispositions of the voting stock of an
    institution or its parent company, and significant changes in
    the composition of the board of directors of an institution or
    its parent company. Some of these transactions or events may be
    beyond our control. Our failure to obtain, or a delay in
    receiving, approval of any change in control from the Department
    of Education, the Higher Learning Commission, or the Arizona
    State Board for Private Postsecondary Education could impair our
    ability to operate or participate in the Title IV programs,
    which could have a material adverse effect on our business,
    prospects, financial condition, and results of operations. Our
    failure to obtain, or a delay in receiving, approval of any
    change in control from any other state in which we are currently
    licensed or authorized, or from any of our specialized
    accrediting commissions, could require us to suspend our
    activities in that state or suspend offering the applicable
    programs until we receive the required approval, or could
    otherwise impair our operations. The potential adverse effects
    of a change in control could influence future decisions by us
    and our stockholders regarding the sale, purchase, transfer,
    issuance, or redemption of our stock, which could discourage
    bids for your shares of our stock and could have an adverse
    effect on the market price of your shares.
In connection with our initial public offering in November 2008,
    we submitted a description of the offering to the Department of
    Education, including a description of a proxy and voting
    agreement that certain of our stockholders entered into upon
    completion of the public offering, pursuant to which Brent D.
    Richardson, our Executive Chairman, and Christopher C.
    Richardson, our General Counsel and a director (collectively,
    the "Richardson Voting Group"), controlled the voting
    power of approximately 42.9% of our total outstanding voting
    stock after the initial public offering. See "Certain
    Relationships and Related Transactions — Voting
    Agreement." Based on this description, the Department of
    Education concluded that the initial public offering did not
    result in a change in control under the Department of
    Education's regulations. The Higher Learning Commission did
    consider our initial public offering to be a change in control
    under its policies and, while it approved our consummation of
    the offering, it informed us that it would conduct a site visit
    to confirm the appropriateness of the approval and to evaluate
    whether we continue to meet the Higher Learning
    Commission's eligibility criteria. The Higher Learning
    Commission conducted its site visit in March 2009 and
    determined, among other things, that the initial public offering
    was conducted in a manner that did not disrupt our ongoing
    operations and that no further action would be required as a
    result of the change in control. As a result, the Higher
    Learning Commission formally approved the change in control in
    June 2009. In addition, we notified the Arizona State Board for
    Private Postsecondary Education of our initial public offering
    and, based on our communications with that agency, we do not
    believe that our initial public offering constituted a change in
    control under Arizona law. We also notified other accrediting
    commissions and state agencies, as we believed necessary, of our
    initial public offering and the reasons why we believed the
    offering did not constitute a change in control under their
    respective standards, or to determine what was required if any
    such commission or agency did consider the offering to
    constitute a change in control. None of the other accrediting
    commissions and state agencies that we notified of our initial
    public offering has advised us that it concluded that the
    offering constituted a change in control under its policies or
    that it required us to take any further action.
With respect to publicly-traded corporations, like us,
    Department of Education regulations provide that a change in
    control occurs if either: (i) there is an event that would
    obligate the corporation to file a Current Report on
Form 8-K
with the Securities and Exchange Commission, or the SEC,
    disclosing a change in
15
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control, or (ii) the corporation has a stockholder that
    owns, or has voting control over, at least 25% of the total
    outstanding voting stock of the corporation and is the largest
    stockholder of the corporation, and that stockholder ceases to
    own, or have voting control over, at least 25% of such stock or
    ceases to be the largest stockholder. The Higher Learning
    Commission adopted new policies and procedures with respect to
    changes in control in June 2009, and one such policy provides
    that an institution is considered to undergo a change in control
    if a person or group increases or decreases its control of
    shares to greater than or less than 25% of the total outstanding
    shares of the stock of a parent corporation that owns or
    controls the accredited institution and, in such event, requires
    the institution to obtain its approval in advance of the change.
    In addition, the standards of the Arizona State Board for
    Private Postsecondary Education provide that an institution that
    is owned by a publicly-traded corporation whose control is
    vested in the voting members of the board of directors, like us,
    undergoes a change in control if 50% or more of the voting
    members of the board of directors change within a
12-month
period or the chief executive officer of the corporation
    changes. Based on the number of shares of common stock expected
    to be sold by us and the selling stockholders in this offering,
    we believe that the Richardson Voting Group will continue to
    have voting power over 25% or more of our total outstanding
    voting stock after the completion of the offering and that this
    offering will not constitute a change in control under the
    Department of Education's regulations or the Higher
    Learning Commission's policies. In addition, because no
    such changes with respect to our board of directors or chief
    executive officer will occur in connection with this offering,
    we believe that this offering will not constitute a change in
    control under the rules of the Arizona State Board for Private
    Postsecondary Education.
Even if this offering will not constitute a change of control
    under the Department of Education's regulations or the
    Higher Learning Commission's policies, under the terms of
    the voting agreement with the Richardson Voting Group, if any
    person party to the voting agreement transfers shares covered by
    the proxy in registered or open-market sales, the proxy is no
    longer effective as to such shares. Accordingly, the number of
    shares over which the Richardson Voting Group will continue to
    hold voting power pursuant to the voting agreement will decrease
    over time as shares held by other parties to the voting
    agreement are sold, and we may not be aware of these sales since
    many of the shares subject to the voting agreement are held in
    "street name." If at any time in the future, as a
    result of such future registered or open-market sales, the
    number of shares over which the Richardson Voting Group holds
    voting power falls below 25%, a change in control will occur. At
    that point, with respect to the Department of Education, we will
    lose our eligibility to participate in the Title IV
    programs and must apply to the Department of Education in order
    to reestablish such eligibility. If we file the required
    application and follow other procedures, the Department of
    Education may temporarily certify us on a provisional basis
    following the change in control, so that our students retain
    access to Title IV program funds until the Department of
    Education completes its full review. In addition, the Department
    of Education will extend such temporary provisional
    certification if we timely file other required materials. While
    we expect to file all such applications and other materials
    within applicable deadlines, there is no assurance that we will
    be able to do so because we cannot be certain of the percentage
    of stock that is subject to the Richardson Voting Group at any
    given time in order to be certain if and when the Richardson
    Voting Group falls below the applicable 25% threshold. If we
    fail to meet any of these application and other deadlines, our
    certification will expire and our students will not be eligible
    to receive Title IV program funds until the Department of
    Education completes its full review, which commonly takes
    several months and may take longer. If the Department of
    Education approves our application after a change in control, it
    will certify us on a provisional basis for a period of up to
    approximately three years, although we cannot predict how the
    Department of Education will process this provisional
    recertification or what restrictions may be imposed if such
    change in control occurs while we remain on
month-to-month
status and subject to the ongoing investigation by the Office of
    Inspector General of the Department of Education or the
qui
    tam
lawsuit. See "Regulation — Regulatory
    Standards that May Restrict Institutional Expansion or Other
    Changes — Change in ownership resulting in a change in
    control."
With respect to the Higher Learning Commission, if we anticipate
    that the number of shares over which the Richardson Voting Group
    holds voting power will fall below 25% at any time in the
    future, we would be required to obtain the approval of the
    Higher Learning Commission before such event occurs. However,
    because we may be unaware when such event occurs, we would plan
    to seek the cooperation of the Higher Learning Commission to
    allow us to arrange an appropriate review procedure at that time
    since there may not be an opportunity to obtain the Higher
    Learning Commission's advance review and approval, as is
    typically
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required by its policies. In that circumstance, we cannot
    predict whether the Higher Learning Commission would impose any
    limitations or conditions on us, or identify any compliance
    issues related to us in the context of the change in control
    process, that could result in our loss of accreditation by the
    Higher Learning Commission. Any such loss of accreditation would
    result in our loss of eligibility to participate in the
    Title IV programs and cause a significant decline in our
    student enrollments.
If a
    substantial number of our students cannot secure Title IV
    loans as a result of decreased lender participation in the
    Title IV programs or if lenders increase the costs or
    reduce the benefits associated with the Title IV loans they
    provide, we could be materially adversely
    affected.
The cumulative impact of recent regulatory and market
    developments and conditions, including the widespread disruption
    in the credit and financial markets, has caused some lenders to
    cease providing Title IV loans to students, including some
    lenders that previously provided our students with Title IV
    loans, also known as Federal Family Education program loans, or
    FFEL loans. Other lenders have reduced the benefits and
    increased the fees associated with the Title IV loans they
    provide. We and other schools have had to modify student loan
    practices in ways that result in higher administrative costs. If
    the cost of Title IV loans increases or availability
    decreases, some students may not be able to take out loans and
    may not enroll in a postsecondary institution. In May 2008, new
    federal legislation was enacted to attempt to ensure that all
    eligible students would be able to obtain Title IV loans in
    the future and that a sufficient number of lenders would
    continue to provide Title IV loans. Among other things,
    that legislation:
•
authorized the Department of Education to purchase Title IV
    loans from lenders, thereby providing capital to the lenders to
    enable them to continue making Title IV loans to
    students; and
•
permitted the Department of Education to designate institutions
    eligible to participate in a "lender of last resort"
    program, under which federally recognized student loan guaranty
    agencies would be required to make Title IV loans to all
    otherwise eligible students at those institutions.
While this legislation appears to have provided some stability
    to the marketplace for Title IV loans, it is not yet clear
    if it ultimately will be effective in ensuring students'
    access to Title IV loans. The environment surrounding
    access to and cost of student loans remains in a state of flux.
    The Department of Education proposed new regulations regarding
    student loans in July 2009, which could go into effect on
    July 1, 2010, and Congress is in the process of considering
    legislation to eliminate the FFEL loan program and move all
    federal student lending into the Federal Direct Loan Program,
    known as the FDL program. The uncertainty surrounding these
    issues, and any resolution of these issues that increases loan
    costs or reduces students' access to Title IV loans,
    may adversely affect our student enrollments. Although we are
    approved to participate in the FDL program, because a
    significant percentage of our revenue is derived from the
    Title IV programs, any action by Congress that
    significantly reduces Title IV program funding or our
    ability or the ability of our students to participate in the
    Title IV programs could increase our costs of compliance,
    reduce the ability of some students to finance their education
    at our institution, require us to seek to arrange for other
    sources of financial aid for our students and materially
    decrease our student enrollment, each of which could have a
    material adverse effect on us. In addition, a transition to the
    FDL program could cause disruptions in the administration of
    Title IV program loans to our students if we or the
    Department of Education encounter difficulties with the systems
    or processes necessary for increased FDL program loans.
Our
    failure to comply with new regulations promulgated by the
    Department of Education could result in financial penalties, or
    the limitation, suspension, or termination of our continued
    participation in the Title IV programs.
The Department of Education has been working since December 2008
    to develop regulations through a negotiated rulemaking process
    to carry out the numerous revisions to the Title IV program
    regulations required by the reauthorization of the Higher
    Education Act in August 2008. Negotiated rulemaking is a process
    whereby the Department of Education consults with members of the
    postsecondary education community to identify issues of concern
    and attempts to agree on proposed regulatory revisions to
    address those issues before the Department of Education formally
    proposes any regulations. Following the conclusion of such
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negotiated rulemaking, in July and August 2009, the Department
    of Education proposed regulations relating to, among other
    things, the relationships between schools and lenders of both
    private and Title IV loans, the approval and oversight of
    accrediting agencies, and general programmatic requirements
    applicable to the Title IV programs, including the
    "90/10 Rule." The Department of Education is expected
    to publish new final regulations by November 1, 2009, which
    is the required deadline in order for such regulations to take
    effect on July 1, 2010. In addition, in May 2009, the
    Department of Education announced its intent to establish new
    negotiated rulemaking committees that are expected to begin
    their discussions as soon as the fall of 2009, and to address a
    number of significant issues, including: compensation paid by
    institutions to persons or entities engaged in student
    recruiting or admission activities; the determination of
    satisfactory academic progress under different academic
    calendars; state authorization as a component of institutional
    eligibility; the definition of a credit hour for purposes of
    determining program eligibility status, particularly in the
    context of awarding Pell Grants; verification of information on
    student financial aid applications; and the definition of a high
    school diploma as a condition of a student's eligibility
    for Title IV aid.
The issues addressed in the regulations that have been or are
    expected to be proposed by the Department of Education, as well
    as the issues to be addressed in the upcoming negotiated
    rulemaking process, are broad and complex and concern a number
    of significant aspects of the Title IV programs, including
    eligibility and certification, administrative capability,
    school-lender relationships, the "90/10 Rule,"
    incentive compensation, and student loan default rates. See
    "Regulation — Regulation of Student Financial Aid
    Programs — The 90/10 Rule." At this time, we
    cannot be certain whether and to what extent any changes may
    affect our ability to remain eligible to participate in the
    Title IV programs or require us to incur additional costs
    in connection with our administration of the Title IV
    programs. Any future changes that jeopardize our eligibility to
    participate in some or all of the Title IV programs could
    materially adversely affect us.
An
    increase in interest rates could adversely affect our ability to
    attract and retain students.
For our fiscal years ended December 31, 2007 and 2008, we
    derived cash receipts equal to approximately 70.2% and 74.4%,
    respectively, of our net revenue from tuition financed under the
    Title IV programs, which include student loans with
    interest rates subsidized by the federal government.
    Additionally, some of our students finance their education
    through private loans that are not subsidized. If our
    students' employment circumstances are adversely affected
    by regional or national economic downturns, they may be more
    heavily dependent on student loans. Interest rates have reached
    relatively low levels in recent years, creating a favorable
    borrowing environment for students. However, in the event
    interest rates increase or Congress decreases the amount
    available for federal student aid, our students may have to pay
    higher interest rates on their loans. Any future increase in
    interest rates will result in a corresponding increase in
    educational costs to our existing and prospective students,
    which could result in a significant reduction in our student
    population and revenues. Higher interest rates could also
    contribute to higher default rates with respect to our
    students' repayment of their education loans. Higher
    default rates may in turn adversely impact our eligibility to
    participate in some or all of the Title IV programs, which
    could result in a significant reduction in our student
    population and our profitability. See "We may lose our
    eligibility to participate in the Title IV programs if our
    student loan default rates are too high" located elsewhere
    in "Risk Factors" for further information.
Our
    failure to comply with the regulatory requirements of states
    other than Arizona could result in actions taken by those states
    that could have a material adverse effect on our
    enrollments.
Almost every state imposes regulatory requirements on
    educational institutions that have physical facilities located
    within the state's boundaries. These regulatory
    requirements establish standards in areas such as educational
    programs, facilities, instructional and administrative staff,
    marketing and recruitment, financial operations, addition of new
    locations and educational programs, and various operational and
    administrative procedures, some of which are different than the
    standards prescribed by the Department of Education or the
    Arizona State Board for Private Postsecondary Education. In
    addition, several states have sought to assert jurisdiction over
    educational institutions offering online degree programs that
    have no physical location in the state but that have some
    activity in the state, such as enrolling or offering educational
    services to students who
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reside in the state, employing faculty who reside in the state,
    or advertising to or recruiting prospective students in the
    state. State regulatory requirements for online education vary
    among the states, are not well developed in many states, are
    imprecise or unclear in some states, and can change frequently.
    In the future, states could coordinate their efforts in order to
    more aggressively attempt to regulate or restrict schools'
    offering of online education.
In addition to Arizona, we have determined that our activities
    in certain states constitute a presence requiring licensure or
    authorization under the requirements of the state education
    agency in those states. In certain other states, we have
    obtained approvals to operate as we have determined necessary in
    connection with our marketing and recruiting activities. If we
    fail to comply with state licensing or authorization
    requirements for a state, or fail to obtain licenses or
    authorizations when required, we could lose our state licensure
    or authorization by that state or be subject to other sanctions,
    including restrictions on our activities in that state, fines,
    and penalties. The loss of licensure or authorization in a state
    other than Arizona could prohibit us from recruiting prospective
    students or offering educational services to current students in
    that state, which could significantly reduce our enrollments and
    revenues and materially adversely effect us.
State laws and regulations are not always precise or clear, and
    regulatory agencies may sometimes disagree with the way we have
    interpreted or applied these requirements. Any misinterpretation
    by us of these regulatory requirements or adverse changes in
    regulations or interpretations thereof by regulators could
    materially adversely affect us.
The
    inability of our graduates to obtain a professional license or
    certification in their chosen field of study could reduce our
    enrollments and revenues, and potentially lead to student claims
    against us that could be costly to us.
Many of our students, particularly those in our education and
    healthcare programs, seek a professional license or
    certification in their chosen fields following graduation. A
    student's ability to obtain a professional license or
    certification depends on several factors, including whether the
    institution and the student's program were accredited by a
    particular accrediting commission or approved by a professional
    association or by the state in which the student seeks
    employment. Additional factors are outside the control of the
    institution, such as the individual student's own
    background and qualifications. If one or more states refuse to
    recognize a significant number of our students for professional
    licensing or certification based on factors relating to our
    institution or programs, the potential growth of those programs
    would be negatively impacted and we could be exposed to claims
    or litigation by students or graduates based on their inability
    to obtain their desired professional license or certification,
    each of which could materially adversely affect us.
Increased
    scrutiny and regulation by various governmental agencies of
    relationships between student loan providers and educational
    institutions and their employees have produced significant
    uncertainty concerning restrictions applicable to the
    administration of both Title IV and private student loan
    programs and the funding for those programs which, if not
    satisfactorily or timely resolved, could result in increased
    regulatory burdens and costs for us and could adversely affect
    our student enrollments.
During 2007 and 2008, both Title IV and private student
    loan programs came under increased scrutiny by the Department of
    Education, Congress, state attorneys general, and other parties.
    Issues that received extensive attention included allegations of
    conflicts of interest between some institutions and lenders that
    provide student loans, questionable incentives given by lenders
    to some schools and school employees, allegations of deceptive
    practices in the marketing of student loans, and schools leading
    students to use certain lenders. Several institutions and
    lenders were cited for these problems and paid several million
    dollars in the aggregate to settle those claims. The practices
    of numerous other schools and lenders were, and in some cases
    continue to be, examined by government agencies at the federal
    and state level. The Attorney General of the State of Arizona
    requested extensive documentation from us and other institutions
    in Arizona concerning student loan practices, and we provided
    testimony in response to a subpoena from the Attorney General of
    the State of Arizona about such practices. In 2008, without
    admitting any wrongdoing, we agreed with the Attorney General of
    the State of Arizona to conclude its investigation of us by
    executing a Letter of Assurance, whereby we agreed to conduct
    referrals of students to lenders in accordance with our existing
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policies or any new policies promulgated by the State of Arizona
    in the future and to reimburse the state for the costs of its
    investigation in the amount of approximately $20,000.
As a result of the increased scrutiny of student loan programs,
    Congress has passed new laws, the Department of Education and
    the Board of Governors of the Federal Reserve System have
    promulgated or proposed new and stricter regulations, and
    several states have adopted codes of conduct or enacted state
    laws that further regulate the conduct of lenders, schools, and
    school personnel. These new laws and regulations, among other
    things, limit schools' relationships with lenders, restrict
    the types of services that schools may receive from lenders,
    prohibit lenders from providing other types of loans to students
    in exchange for Title IV loan volume from schools, and
    require schools and lenders to provide additional information to
    students concerning institutionally preferred lenders and the
    terms of available student loans. The environment surrounding
    access to and cost of student loans remains in a state of flux,
    with additional legislation and regulatory changes being
    considered at the state and federal levels. The Department of
    Education proposed new regulations regarding student loans in
    July 2009, which could go into effect on July 1, 2010, and
    Congress is considering legislation to eliminate the FFEL loan
    program and move all federal student lending into the FDL
    program. This uncertainty, and any resolution of these issues
    that increases loan costs or reduces students' access to
    student loans, may adversely affect our student enrollments,
    which could have an adverse effect on us.
Government
    agencies, regulatory agencies, and third parties may conduct
    compliance reviews, bring claims, or initiate litigation against
    us based on alleged violations of the extensive regulatory
    requirements applicable to us, which could cause us to pay
    monetary damages, be sanctioned or limited in our operations,
    and expend significant resources to defend against those
    claims.
Because we operate in a highly regulated industry, we are
    subject to program reviews, audits, investigations, claims of
    non-compliance, and lawsuits by government agencies, regulatory
    agencies, students, employees, stockholders, and other third
    parties alleging non-compliance with applicable legal
    requirements, many of which are imprecise and subject to
    interpretation. As we grow larger, this scrutiny of our business
    may increase. If the result of any such proceeding is
    unfavorable to us, we may lose or have limitations imposed on
    our state licensing, accreditation, or Title IV program
    participation; be required to pay monetary damages (including
    triple damages in certain whistleblower suits); or be subject to
    fines, injunctions, or other penalties, any of which could have
    a material adverse effect on our business, prospects, financial
    condition, and results of operations. In this regard, we are
    currently subject to an investigation by the Department of
    Education's Office of Inspector General, which is focused
    on the manner in which we have compensated our enrollment
    counselors and managers, and a
qui tam
lawsuit brought by
    a former employee alleging violations in the same area. See
    "Risk Factors — The Office of Inspector General
    of the Department of Education has commenced an investigation of
    Grand Canyon University, which is ongoing and which may result
    in fines, penalties, other sanctions, and damage to our
    reputation in the industry," "Risk Factors —
    A
qui tam
lawsuit has been filed against us alleging,
    among other things, that we have improperly compensated certain
    of our enrollment counselors, and we may incur liability, be
    subject to sanctions, or experience damage to our reputation as
    a result of this lawsuit," and "Regulation —
    Regulation of Federal Student Financial Aid Programs —
    Incentive compensation rule." Claims and lawsuits brought
    against us, even if they are without merit, may also result in
    adverse publicity, damage our reputation, negatively affect the
    market price of our stock, adversely affect our student
    enrollments, and reduce the willingness of third parties to do
    business with us. Even if we adequately address the issues
    raised by any such proceeding and successfully defend against
    it, we may have to devote significant financial and management
    resources to address these issues, which could harm our business.
A
    decline in the overall growth of enrollment in postsecondary
    institutions, or in the number of students seeking degrees
    online or in our core disciplines, could cause us to experience
    lower enrollment at our schools, which could negatively impact
    our future growth.
According to a March 2009 report from the NCES, enrollment in
    degree-granting, postsecondary institutions is projected to grow
    10.0% over the ten-year period ending fall 2017 to approximately
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20.1 million. This growth is slower than the 25.8% increase
    reported in the prior ten-year period ended in fall 2007, when
    enrollment increased from 14.5 million in 1997 to
    18.2 million in 2007. Similarly, a 2008 study by
    Eduventures, LLC, projects a compound annual growth rate of
    12.5% in online postsecondary education enrollment over the
    five-year period ending fall 2013, which represents an aggregate
    increase in online enrollment of 1.5 million. This growth
    is slower than the 25.3% compound annual growth rate in the
    prior five-year period ending fall 2008, which represented an
    aggregate increase in online enrollment of 1.3 million. In
    addition, according to a March 2008 report from the Western
    Interstate Commission for Higher Education, the number of high
    school graduates that are eligible to enroll in degree-granting,
    postsecondary institutions is expected to peak at approximately
    3.3 million for the class of 2008, falling in the period
    between
2007-08
and
2013-14
by
    about 150,000 in total before resuming a growth pattern for the
    foreseeable future thereafter. In order to maintain current
    growth rates, we will need to attract a larger percentage of
    students in existing markets and expand our markets by creating
    new academic programs. In addition, if job growth in the fields
    related to our core disciplines is weaker than expected, as a
    result of any regional or national economic downturn or
    otherwise, fewer students may seek the types of degrees that we
    offer. Our failure to attract new students, or the decisions by
    prospective students to seek degrees in other disciplines, would
    have an adverse impact on our future growth.
If our
    students were unable to obtain private loans from third-party
    lenders, our business could be adversely affected given our
    students' reliance on such loans to satisfy their
    educational expenses.
During the fiscal year ended December 31, 2008, private
    loans to students at our school represented approximately 2.9%
    of our revenue (calculated on a cash basis) as compared to 5.1%
    of revenue in fiscal 2007. These loans were provided pursuant to
    private loan programs and were made available to eligible
    students to fund a portion of the students' costs of
    education not covered by the Title IV programs and state
    financial aid sources. Private loans are made to our students by
    lending institutions and are non-recourse to us. The 2008
    reauthorization of the Higher Education Act and related proposed
    and final regulations place significant new restrictions on the
    relationships between institutions and the providers of private
    loans, and require that certain specific terms and disclosures
    accompany such loans. This increased regulatory burden, coupled
    with recent adverse market conditions for consumer and federally
    guaranteed student loans (including lenders' difficulties
    in reselling or syndicating student loan portfolios) have
    resulted, and could continue to result, in providers of private
    loans reducing the availability of or increasing the costs
    associated with providing private loans to postsecondary
    students. In particular, loans to students with low credit
    scores who would not otherwise be eligible for credit-based
    private loans have become increasingly difficult to obtain.
    Prospective students may find that these increased financing
    costs make borrowing prohibitively expensive and abandon or
    delay enrollment in postsecondary education programs. If any of
    these scenarios were to occur, our students' ability to
    finance their education could be adversely affected and our
    student population could decrease, which could have a material
    adverse effect on our business, prospects, financial condition,
    and results of operations.
We are
    subject to sanctions if we pay impermissible commissions,
    bonuses, or other incentive payments to persons involved in
    certain recruiting, admissions, or financial aid
    activities.
A school participating in the Title IV programs may not
    provide, or contract with a third party that provides, any
    commission, bonus, or other incentive payment based on success
    in enrolling students or securing financial aid to any person
    involved in student recruiting or admission activities or in
    making decisions regarding the awarding of Title IV program
    funds. The Department of Education's regulations set forth
    12 "safe harbors" which describe payments and
    arrangements that do not violate the incentive compensation
    rule. The Department of Education's regulations make clear
    that the safe harbors are not a complete list of permissible
    practices under this law. One of these safe harbors permits
    adjustments to fixed salary for enrollment personnel provided
    that such adjustments are not made more than twice during any
    twelve month period, and that any adjustment is not based solely
    on the number of students recruited, admitted, enrolled, or
    awarded financial aid. In addition, such safe harbors do not
    address non-cash awards to enrollment personnel.
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As described in "Risk Factors — The Office of
    Inspector General of the Department of Education has commenced
    an investigation of Grand Canyon University, which is ongoing
    and which may result in fines, penalties, other sanctions, and
    damage to our reputation in the industry," and in
    "Regulation — Regulation of Federal Student
    Financial Aid Programs — Incentive compensation
    rule," we are currently subject to an investigation by the
    Department of Education's Office of Inspector General,
    which is focused on the manner in which we have compensated our
    enrollment counselors and managers. In addition, in recent years
    several for-profit education companies, including us, have been
    faced with whistleblower lawsuits, known as
"qui
    tam"
cases, by current or former employees alleging
    violations of this prohibition. See "Risk
    Factors — A qui tam lawsuit has been filed against us
    alleging, among other things, that we have improperly
    compensated certain of our enrollment counselors, and we may
    incur liability, be subject to sanctions, or experience damage
    to our reputation as a result of this lawsuit." While we
    believe that our compensation policies and practices at issue in
    the complaint have not been based on success in enrolling
    students in violation of applicable law, the Department of
    Education's regulations and interpretations of the
    incentive compensation law do not establish clear criteria for
    compliance in all circumstances and some of our practices,
    including in respect of non-cash awards, have not been within
    the scope of any specific "safe harbor" provided in
    the compensation regulations. If the Department of Education
    determines as a result of the pending investigation that we have
    violated this law, if we are found to be liable in the pending
qui tam
action, or if we or any third parties we have
    engaged otherwise violate this law, we could be fined or
    sanctioned by the Department of Education, or subjected to other
    monetary liability or penalties that could be substantial, any
    of which could harm our reputation, impose significant costs on
    us, and have a material adverse effect on our business,
    prospects, financial condition, and results of operations.
Our
    reputation and our stock price may be negatively affected by
    adverse publicity or by the actions of other postsecondary
    educational institutions.
In recent years, regulatory proceedings and litigation have been
    commenced against various postsecondary educational institutions
    relating to, among other things, deceptive trade practices,
    false claims against the government, and non-compliance with
    Department of Education requirements, state education laws, and
    state consumer protection laws. These proceedings have been
    brought by the Department of Education, the U.S. Department
    of Justice, the SEC, and state governmental agencies, among
    others. These allegations have attracted adverse media coverage
    and have been the subject of legislative hearings and regulatory
    actions at both the federal and state levels, focusing not only
    on the individual schools but in some cases on the for-profit
    postsecondary education sector as a whole. Adverse media
    coverage regarding other for-profit education companies or other
    educational institutions could damage our reputation, result in
    lower enrollments, revenues, and operating profit, and have a
    negative impact on our stock price. Such coverage could also
    result in increased scrutiny and regulation by the Department of
    Education, Congress, accrediting commissions, state
    legislatures, state attorneys general, or other governmental
    authorities of all educational institutions, including us.
If the
    percentage of our revenue that is derived from the Title IV
    programs is too high, we may lose our eligibility to participate
    in those programs.
A for-profit institution loses its eligibility to participate in
    the Title IV programs if, under a formula that requires
    cash basis accounting and other adjustments to the calculation
    of revenue, it derives more than 90% of its revenues from those
    programs in two consecutive fiscal years. The period of
    ineligibility covers at least the next two succeeding fiscal
    years and any Title IV funds already received by the
    institution and its students during the period of ineligibility
    would have to be returned to the applicable lender or the
    Department of Education. An institution whose rate exceeds 90%
    for any single year will be placed on provisional certification
    for at least two fiscal years. The August 2008 reauthorization
    of the Higher Education Act made significant changes to this
    revenue requirement, including certain changes to the formula
    used to calculate a school's ratio. Using the Department of
    Education's formula that was in effect prior to the August
    2008 reauthorization of the Higher Education Act, we have
    calculated that, for our 2007 and 2008 fiscal years, we derived
    approximately 74.0% and 78.6%, respectively, of our revenue from
    the Title IV programs. We are currently assessing what
    impact, if any, the revised formula and other changes in federal
    law will have on our 90/10 calculation. As a result of recent
    changes in federal law that increased Title IV grant and
    loan limits, as
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well as the current economic downturn, which has adversely
    affected the employment circumstances of our students and their
    parents and increased their reliance on Title IV programs,
    we expect the percentage of our revenue that we receive from the
    Title IV programs to continue to increase in the future,
    making it more difficult for us to satisfy this requirement.
    Exceeding the 90% threshold such that we lost our eligibility to
    participate in the Title IV programs would have a material
    adverse effect on our business, prospects, financial condition,
    and results of operations.
We may
    lose our eligibility to participate in the Title IV
    programs if our student loan default rates are too
    high.
An institution may lose its eligibility to participate in some
    or all of the Title IV programs if, for three consecutive
    years, 25% or more of its students who were required to begin
    repayment on their student loans in one year default on their
    payment by the end of the following year. In addition, an
    institution may lose its eligibility to participate in some or
    all of the Title IV programs if the default rate of its
    students exceeds 40% for any single year. The August 2008
    reauthorization of the Higher Education Act extends by one year
    the period for which students' defaults on their loans will
    be included in the calculation of an institution's default
    rate, a change that is expected to increase our cohort default
    rates. The new law also increases the threshold for an
    institution to lose its eligibility to participate in the
    relevant Title IV programs from 25% to 30% over three
    consecutive years, while leaving the threshold at 40% for a
    single year. These changes to the law take effect for
    institutions' cohort default rates for federal fiscal year
    2009, which are expected to be calculated and issued by the
    Department of Education in 2012. While our cohort default rates
    have historically been significantly below these levels, we
    cannot assure you that this will continue to be the case. For
    example, we expect our cohort default rate for the 2008 federal
    fiscal year to increase (but remain well below the Department of
    Education's thresholds) due primarily to the impact of
    current economic conditions on our students and former students.
    In addition, increases in interest rates or declines in income
    or job losses for our students could contribute to higher
    default rates on student loans. Exceeding the student loan
    default rate thresholds and losing our eligibility to
    participate in the Title IV programs would have a material
    adverse effect on our business, prospects, financial condition,
    and results of operations. Any future changes in the formula for
    calculating student loan default rates, economic conditions, or
    other factors that cause our default rates to increase, could
    place us in danger of losing our eligibility to participate in
    some or all of the Title IV programs and materially
    adversely affect us.
We are
    subject to sanctions if we fail to correctly calculate and
    timely return Title IV program funds for students who
    withdraw before completing their educational
    program.
A school participating in the Title IV programs must
    calculate the amount of unearned Title IV program funds
    that it has disbursed to students who withdraw from their
    educational programs before completing such programs and must
    return those unearned funds to the appropriate lender or the
    Department of Education in a timely manner, generally within
    45 days of the date the school determines that the student
    has withdrawn. If the unearned funds are not properly calculated
    and timely returned for a sufficient percentage of students, we
    may have to post a letter of credit in favor of the Department
    of Education equal to 25% of the Title IV funds that should
    have been returned for such students in the prior fiscal year,
    we may be liable for repayment of Title IV funds and
    related interest and we could be fined or otherwise sanctioned
    by the Department of Education, which could increase our cost of
    regulatory compliance and materially adversely affect us.
    Further, a failure to comply with these regulatory requirements
    could result in termination of our ability to participate in the
    Title IV programs, which would materially affect us.
We
    cannot offer new programs, expand our operations into certain
    states, or acquire additional schools if such actions are not
    timely approved by the applicable regulatory agencies, and we
    may have to repay Title IV funds disbursed to students
    enrolled in any such programs, schools, or states if we do not
    obtain prior approval.
Our expansion efforts include offering new educational programs.
    In addition, we may increase our operations in additional states
    and seek to acquire existing schools from other companies. If we
    are unable to
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obtain the necessary approvals for such new programs,
    operations, or acquisitions from the Department of Education,
    the Higher Learning Commission, the Arizona State Board for
    Private Postsecondary Education, or any other applicable state
    education agency or accrediting commission, or if we are unable
    to obtain such approvals in a timely manner, our ability to
    consummate the planned actions and provide Title IV funds
    to any affected students would be impaired, which could have a
    material adverse effect on our expansion plans. If we were to
    determine erroneously that any such action did not need approval
    or that we had all required approvals, we could be liable for
    repayment of the Title IV program funds provided to
    students in that program or at that location.
Risks
    Related to Our Business
Our
    success depends, in part, on the effectiveness of our marketing
    and advertising programs in recruiting new
    students.
Building awareness of Grand Canyon University and the programs
    we offer is critical to our ability to attract prospective
    students. It is also critical to our success that we convert
    prospective students to enrolled students in a cost-effective
    manner and that these enrolled students remain active in our
    programs. Some of the factors that could prevent us from
    successfully recruiting, enrolling, and retaining students in
    our programs include:
•
the reduced availability of, or higher interest rates and other
    costs associated with, Title IV loan funds or other sources
    of financial aid;
•
the emergence of more successful competitors;
•
factors related to our marketing, including the costs and
    effectiveness of Internet advertising and broad-based branding
    campaigns and recruiting efforts;
•
performance problems with our online systems;
•
failure to maintain institutional and specialized accreditations;
•
the requirements of the education agencies that regulate us
    which restrict schools' initiation of new programs and
    modification of existing programs;
•
the requirements of the education agencies that regulate us
    which restrict the ways schools can compensate their recruitment
    personnel;
•
increased regulation of online education, including in states in
    which we do not have a physical presence;
•
restrictions that may be imposed on graduates of online programs
    that seek certification or licensure in certain states;
•
student dissatisfaction with our services and programs;
•
the results of the ongoing investigation by the Department of
    Education's Office of Inspector General and the pending
qui tam
action regarding the manner in which we have
    compensated our enrollment personnel, and possible remedial
    actions or other liability resulting therefrom;
•
damage to our reputation or other adverse effects as a result of
    negative publicity in the media, in industry or governmental
    reports, or otherwise, affecting us or other companies in the
    for-profit postsecondary education sector;
•
price reductions by competitors that we are unwilling or unable
    to match;
•
a decline in the acceptance of online education;
•
an adverse economic or other development that affects job
    prospects in our core disciplines; and
•
a decrease in the perceived or actual economic benefits that
    students derive from our programs.
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If we are unable to continue to develop awareness of Grand
    Canyon University and the programs we offer, and to recruit,
    enroll, and retain students, our enrollments would suffer and
    our ability to increase revenues and maintain profitability
    would be significantly impaired.
If we
    are unable to hire and train new and existing employees
    responsible for student recruitment, the effectiveness of our
    student recruiting efforts would be adversely
    affected.
In order to support our planned revenue growth we intend to
    hire, develop, and train a significant number of additional
    employees responsible for student recruitment and retain and
    continue to develop and train our current student recruitment
    personnel. Our ability to develop and maintain a strong student
    recruiting function may be affected by a number of factors,
    including our ability to integrate and motivate our enrollment
    counselors, our ability to effectively train our enrollment
    counselors, the length of time it takes new enrollment
    counselors to become productive, regulatory restrictions on the
    method of compensating enrollment counselors, and the
    competition in hiring and retaining enrollment counselors. If we
    are unable to hire, develop, and retain a sufficient number of
    qualified enrollment counselors, our ability to increase
    enrollments would be adversely affected.
We
    operate in a highly competitive industry, and competitors with
    greater resources could harm our business.
The postsecondary education market is highly fragmented and
    competitive. We compete for students with traditional public and
    private two-year and four-year colleges and universities and
    other for-profit schools, including those that offer online
    learning programs. Many public and private schools, colleges,
    and universities, including most major colleges and
    universities, offer online programs. We expect to experience
    additional competition in the future as more colleges,
    universities, and for-profit schools offer an increasing number
    of online programs. Each of these competitors may develop
    platforms or other technologies, including technologies such as
    streaming video, that allow for greater levels of interactivity
    between faculty and students and that are superior to the
    platform and technology we use, and these differences may affect
    our ability to recruit and retain students. Public institutions
    receive substantial government subsidies, and public and private
    non-profit institutions have access to government and foundation
    grants, tax-deductible contributions, and other financial
    resources generally not available to for-profit schools.
    Accordingly, public and private non-profit institutions may have
    instructional and support resources superior to those in the
    for-profit sector, and public institutions can offer
    substantially lower tuition prices. Some of our competitors in
    both the public and private sectors also have substantially
    greater financial and other resources than we do. We may not be
    able to compete successfully against current or future
    competitors, including with respect to our ability to acquire or
    compete with technologies being developed by our competitors,
    and may face competitive pressures that could adversely affect
    our business, prospects, financial condition, and results of
    operations. These competitive factors could cause our
    enrollments, revenues, and profitability to significantly
    decrease and could render our online delivery format less
    competitive or obsolete.
Capacity
    constraints, system disruptions, or security breaches in our
    online computer networks could have a material adverse effect on
    our ability to attract and retain students.
The performance and reliability of the infrastructure of our
    online operations are critical to our reputation and to our
    ability to attract and retain students. Any computer system
    disruption or failure, or a sudden and significant increase in
    traffic on the servers that host our online operations, may
    result in our online courses and programs being unavailable for
    a period of time. In addition, any significant failure of our
    computer networks or servers, whether as a result of third-party
    actions or in connection with planned upgrades and conversions,
    could disrupt our on-campus operations. Individual, sustained,
    or repeated occurrences could significantly damage the
    reputation of our online operations and result in a loss of
    potential or existing students. Additionally, our online
    operations are vulnerable to interruption or malfunction due to
    events beyond our control, including natural disasters and
    network and telecommunications failures. Our computer networks
    may also be vulnerable to unauthorized access, computer hackers,
    computer viruses, and other security problems. A user who
    circumvents security measures could misappropriate proprietary
    information or
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cause interruptions to or malfunctions in operations. As a
    result, we may be required to expend significant resources to
    protect against the threat of these security breaches or to
    alleviate problems caused by these incidents. Any interruption
    to our online operations could have a material adverse effect on
    our ability to attract students to our online programs and to
    retain those students.
The
    implementation of our new back office systems could impact our
    ability to timely and accurately admit students to the
    university and register them for classes, bill students, certify
    and disburse financial aid, prepare financial reports, or impact
    the effectiveness of our internal controls over financial
    reporting.
We plan to transition our online programs from a
    "term-based" financial aid system (where all students,
    including online students, begin programs and are eligible to
    receive financial aid at periodic start dates pursuant to a
    calendar-based term system) to a "borrower-based"
    financial aid system (where each student may begin a program and
    be eligible to receive financial aid at any time throughout the
    year). As part of this transition, we are converting our back
    office system from Datatel, Inc. to a series of programs
    developed by Campus Management Corp., including CampusVue and
    CampusPortal, and also implementing Microsoft's Great
    Plains accounting system. These new systems are intended to
    allow us to manage our non-traditional online students with
    greater ease and flexibility by providing for rolling and
    flexible start dates. While we intend to maintain redundancies
    between our old and new systems for a period of time while we
    complete the conversions and ensure the that the new systems
    operate as intended, if we do not effectively transition our
    student and financial aid data to these systems or if these
    systems do not operate as intended, it could adversely impact
    the effectiveness of our internal controls over financial
    reporting, as well as our ability to timely and accurately admit
    students to the university and register them for classes, bill
    students, certify and disburse financial aid, and prepare
    financial reports. This may in turn affect our ability to comply
    with the Department of Education's administrative
    capability standards, as discussed under "Risk
    Factors — If we do not comply with the Department of
    Education's administrative capability standards, we could
    suffer financial penalties, be required to accept other
    limitations in order to continue participating in the
    Title IV programs, or lose our eligibility to participate
    in the Title IV programs."
We may
    not be able to successfully implement our growth strategy if we
    are not able to improve the content of our existing academic
    programs or to develop new programs on a timely basis and in a
cost-effective
manner, or at all.
We continually seek to improve the content of our existing
    programs and develop new programs in order to meet changing
    market needs. The success of any of our programs and courses,
    both ground and online, depends in part on our ability to expand
    the content of our existing programs, develop new programs in a
    cost-effective manner, and meet the needs of existing and
    prospective students and employers in a timely manner, as well
    as on the acceptance of our actions by existing or prospective
    students and employers. We developed many of our online programs
    based on our existing ground programs. In the future, we may
    develop programs solely, or initially, for online use, which may
    pose new challenges, including the need to develop course
    content without having an existing program on which such content
    can be based. Even if we are able to develop acceptable new
    programs, we may not be able to introduce these new programs in
    a timely fashion or as quickly as our competitors are able to
    introduce competing programs. If we do not respond adequately to
    changes in market conditions, our ability to attract and retain
    students could be impaired and our business, prospects,
    financial condition, and results of operations could suffer.
The development and approval of new programs and courses, both
    ground and online, are subject to requirements and limitations
    imposed by the Department of Education, state licensing
    agencies, and the relevant accrediting commissions, and in
    certain cases, such as with our newly approved doctoral program
    in education, involves a process that can take several years to
    complete. The imposition of restrictions on the initiation of
    new educational programs by any of our regulatory agencies, or
    delays in obtaining approvals of such programs, may delay our
    expansion plans. Establishing new academic programs or modifying
    existing academic programs may also require us to make
    investments in specialized personnel, increase marketing
    efforts, and reallocate resources. We may have limited
    experience with the subject matter of new programs.
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If we are unable to expand our existing programs, offer new
    programs on a timely basis or in a cost-effective manner, or
    otherwise manage effectively the operations of newly established
    programs, our business, prospects, financial condition, and
    results of operations could be adversely affected.
Our
    failure to keep pace with changing market needs and technology
    could harm our ability to attract students.
Our success depends to a large extent on the willingness of
    employers to employ, promote, or increase the pay of our
    graduates. Increasingly, employers demand that their new
    employees possess appropriate technical and analytical skills
    and also appropriate interpersonal skills, such as
    communication, and teamwork skills. These skills can evolve
    rapidly in a changing economic and technological environment.
    Accordingly, it is important that our educational programs
    evolve in response to those economic and technological changes.
    The expansion of existing academic programs and the development
    of new programs may not be accepted by current or prospective
    students or by the employers of our graduates. Even if we are
    able to develop acceptable new programs, we may not be able to
    begin offering those new programs in a timely fashion or as
    quickly as our competitors offer similar programs. If we are
    unable to adequately respond to changes in market requirements
    due to regulatory or financial constraints, unusually rapid
    technological changes, or other factors, the rates at which our
    graduates obtain jobs in their fields of study could suffer, our
    ability to attract and retain students could be impaired, and
    our business, prospects, financial condition, and results of
    operations could be adversely affected.
If we
    do not maintain existing, and develop additional, relationships
    with employers, our future growth may be impaired.
We currently have relationships with large school districts and
    healthcare systems, primarily in Arizona, and also recently
    began seeking relationships with national and international
    employers, to provide their employees with the opportunity to
    obtain degrees through us while continuing their employment.
    These relationships are an important part of our strategy as
    they provide us with a steady source of potential working adult
    students for particular programs and also serve to increase our
    reputation among high-profile employers. As a result of economic
    conditions, a number of employers we work with have reduced the
    extent to which they reimburse their employees for participating
    in our programs. If we are unable to develop new relationships,
    or if our existing relationships deteriorate or end as a result
    of current or future economic conditions affecting employers or
    otherwise, our efforts to seek these sources of potential
    working adult students will be impaired, and this could
    materially and adversely affect our business, prospects,
    financial condition, and results of operations.
Our
    failure to effectively manage our growth could harm our
    business.
Our business recently has experienced rapid growth. Growth and
    expansion of our operations may place a significant strain on
    our resources and increase demands on our executive management
    team, management information and reporting systems, financial
    management controls and personnel, and regulatory compliance
    systems and personnel. We may not be able to maintain or
    accelerate our current growth rate, effectively manage our
    expanding operations, or achieve planned growth on a timely or
    profitable basis. If we are unable to manage our growth
    effectively, we may experience operating inefficiencies and our
    earnings may be materially adversely affected.
We may
    be unable to finance our expansion activities, and interest and
    other expenses may increase.
We intend to expand the size and enhance the profile and
    reputation of our ground campus by, among other things, adding
    faculty and expanding upon and modernizing our campus
    infrastructure and technological capabilities over the next
    several years. These activities may require significant capital
    expenditures and may cause us to incur significant expenses, and
    there can be no guarantee that we will be able, or that it will
    be advantageous, to fund such expenditures or expenses with cash
    flow from operations. If we do not fund such activities with
    cash flow from operations, we will be required to finance such
    activities. Financing may take the form of, among other things,
    loans under a credit facility, sale-leaseback transactions, the
    issuance of
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equity securities, or a combination of the foregoing. There can
    be no guarantee that any such financing will be available on
    terms acceptable to us, or at all. Furthermore, our loan
    agreement contains covenants that restrict our ability to incur
    debt, and there can be no guarantee that we will be able to
    secure the consent of our lender for any financing.
If we obtain financing, we may incur increased interest or lease
    expenses, or other financing charges, that could have an adverse
    effect on our cash flow. In addition, any financing accomplished
    through the issuance of any additional equity securities could
    be dilutive to holders of our common stock. If we are unable to
    fund our expansion activities, our ability to implement our
    business plan will be adversely affected.
If we
    fail to maintain proper and effective disclosure controls and
    procedures and internal controls over financial reporting, our
    ability to produce accurate financial statements could be
    impaired, which could adversely affect our stock price, our
    ability to operate our business and investors' views of
    us.
Ensuring that we have adequate disclosure controls and
    procedures, including internal controls over financial
    reporting, in place so that we can produce accurate financial
    statements on a timely basis is a costly and time- consuming
    effort that needs to be re-evaluated frequently. We are
    continuing the process of documenting, reviewing and, if
    appropriate, improving our internal controls and procedures as
    we will eventually be subject to the requirements of
    Section 404 of the Sarbanes-Oxley Act of 2002, or the
    Sarbanes-Oxley Act, which will require annual management
    assessments of the effectiveness of our internal controls over
    financial reporting and a report by our independent auditors
    addressing these assessments. We will be required to comply with
    the internal controls evaluation and certification requirements
    of Section 404 of the Sarbanes-Oxley Act by no later than
    the end of our 2009 fiscal year.
Our
    success depends upon our ability to recruit and retain key
    personnel.
Our success to date has largely depended on, and will continue
    to depend on, the skills, efforts, and motivation of our
    executive officers, who generally have significant experience
    with our company and within the education industry. Our success
    also largely depends on our ability to attract and retain highly
    qualified faculty, school administrators, and additional
    corporate management personnel. We may have difficulties in
    locating and hiring qualified personnel and in retaining such
    personnel once hired. In addition, because we operate in a
    highly competitive industry, our hiring of qualified executives
    or other personnel may cause us or such persons to be subject to
    lawsuits alleging misappropriation of trade secrets, improper
    solicitation of employees, or other claims. Other than
    non-compete agreements of limited duration that we have with
    certain executive officers, we have not historically sought
    non-compete agreements with key personnel and they may leave and
    subsequently compete against us. The loss of the services of any
    of our key personnel, many of whom are not party to employment
    agreements with us, or our failure to attract and retain other
    qualified and experienced personnel on acceptable terms, could
    cause our business to suffer.
The
    protection of our operations through exclusive proprietary
    rights and intellectual property is limited, and from time to
    time we encounter disputes relating to our use of intellectual
    property of third parties, any of which could harm our
    operations and prospects.
In the ordinary course of our business we develop intellectual
    property of many kinds that is or will be the subject of
    copyright, trademark, service mark, patent, trade secret, or
    other protections. This intellectual property includes but is
    not limited to courseware materials and business know-how and
    internal processes and procedures developed to respond to the
    requirements of operating our business and to comply with the
    rules and regulations of various education regulatory agencies.
    We rely on a combination of copyrights, trademarks, service
    marks, trade secrets, domain names, and agreements to protect
    our intellectual property. We rely on service mark and trademark
    protection in the United States to protect our rights to the
    mark "Grand Canyon University," as well as distinctive
    logos and other marks associated with our services. We rely on
    agreements under which we obtain rights to use course content
    developed by faculty members and other third party content
    experts, as well as license agreements pursuant to which we
    license the right to brand certain of our program offerings. We
    cannot assure you that the measures that we take will be
    adequate or that we have secured, or will be able to secure,
    appropriate protections for all of our proprietary rights in the
    United States
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or select foreign jurisdictions, or that third parties will not
    infringe upon or violate our proprietary rights. Unauthorized
    third parties may attempt to duplicate or copy the proprietary
    aspects of our curricula, online resource material, and other
    content, and offer competing programs to ours.
In particular, we license the right to utilize the name of Ken
    Blanchard in connection with our business school and Executive
    MBA programs and have spent significant resources in related
    branding efforts. Nevertheless, our license agreement with
    Blanchard Education, LLC has a fixed term and may not
    necessarily be extended in the future. In addition, third
    parties may attempt to develop competing programs or copy
    aspects of our curriculum, online resource material, quality
    management, and other proprietary content. The termination of
    this license agreement, or attempts to compete with or duplicate
    our programs, if successful, could adversely affect our
    business. Protecting these types of intellectual property rights
    can be difficult, particularly as it relates to the development
    by our competitors of competing courses and programs.
We may from time to time encounter disputes over rights and
    obligations concerning intellectual property, and we may not
    prevail in these disputes. In certain instances, we may not have
    obtained sufficient rights in the content of a course. Third
    parties may raise a claim against us alleging an infringement or
    violation of the intellectual property of that third party. Some
    third-party intellectual property rights may be extremely broad,
    and it may not be possible for us to conduct our operations in
    such a way as to avoid those intellectual property rights. Any
    such intellectual property claim could subject us to costly
    litigation and impose a significant strain on our financial
    resources and management personnel regardless of whether such
    claim has merit, and we may be required to alter the content of
    our classes or pay monetary damages, which may be significant.
We are
    subject to laws and regulations as a result of our collection
    and use of personal information, and any violations of such laws
    or regulations, or any breach, theft, or loss of such
    information, could adversely affect our reputation and
    operations.
Possession and use of personal information in our operations
    subjects us to risks and costs that could harm our business. We
    collect, use, and retain large amounts of personal information
    regarding our applicants, students, faculty, staff, and their
    families, including social security numbers, tax return
    information, personal and family financial data, and credit card
    numbers. We also collect and maintain personal information of
    our employees in the ordinary course of our business. Our
    services can be accessed globally through the Internet.
    Therefore, we may be subject to the application of national
    privacy laws in countries outside the U.S. from which
    applicants and students access our services. Such privacy laws
    could impose conditions that limit the way we market and provide
    our services.
Our computer networks and the networks of certain of our vendors
    that hold and manage confidential information on our behalf may
    be vulnerable to unauthorized access, employee theft or misuse,
    computer hackers, computer viruses, and other security threats.
    Confidential information may also inadvertently become available
    to third parties when we integrate systems or migrate data to
    our servers following an acquisition of a school or in
    connection with periodic hardware or software upgrades.
Due to the sensitive nature of the personal information stored
    on our servers, our networks may be targeted by hackers seeking
    to access this data. A user who circumvents security measures
    could misappropriate sensitive information or cause
    interruptions or malfunctions in our operations. Although we use
    security and business controls to limit access and use of
    personal information, a third party may be able to circumvent
    those security and business controls, which could result in a
    breach of student or employee privacy. In addition, errors in
    the storage, use, or transmission of personal information could
    result in a breach of privacy for current or prospective
    students or employees. Possession and use of personal
    information in our operations also subjects us to legislative
    and regulatory burdens that could require us to implement
    certain policies and procedures, such as the procedures we
    adopted to comply with the Red Flags Rule that was promulgated
    by the Federal Trade Commission, or FTC, under the federal Fair
    Credit Reporting Act and that requires the establishment of
    guidelines and policies regarding identity theft related to
    student credit accounts, and could require us to make certain
    notifications of data breaches and restrict our use of personal
    information. A violation of any laws or regulations relating to
    the collection or use of personal information
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could result in the imposition of fines against us. As a result,
    we may be required to expend significant resources to protect
    against the threat of these security breaches or to alleviate
    problems caused by these breaches. A major breach, theft, or
    loss of personal information regarding our students and their
    families or our employees that is held by us or our vendors, or
    a violation of laws or regulations relating to the same, could
    have a material adverse effect on our reputation and result in
    further regulation and oversight by federal and state
    authorities and increased costs of compliance.
We are
    incurring increased costs as a result of being a public company,
    and the requirements of being a public company may divert
    management attention from our business.
We have operated as a public company since November 19,
    2008. As a public company, we incur significant legal,
    accounting and other expenses that we did not incur as a private
    company. In addition, we are subject to a number of additional
    requirements, including the reporting requirements of the
    Securities Exchange Act of 1934, as amended, or the Exchange
    Act, the Sarbanes-Oxley Act, and the listing standards of
    Nasdaq. These requirements have caused us to incur increased
    costs and might place a strain on our systems and resources. The
    Exchange Act requires, among other things, that we file annual,
    quarterly, and current reports with respect to our business and
    financial condition. The Sarbanes-Oxley Act requires, among
    other things, that we maintain effective disclosure controls and
    procedures and internal control over financial reporting, and
    also requires that our internal controls be assessed by
    management and attested to by our auditors as of December 31 of
    each fiscal year commencing with our fiscal year ending
    December 31, 2009. In order to maintain and improve the
    effectiveness of our disclosure controls and procedures and
    internal control over financial reporting, significant resources
    and management oversight is required. As a result, our
    management's attention might be diverted from other
    business concerns, which could have a material adverse effect on
    our business, prospects, financial condition, and results of
    operations.
At
    present we derive a significant portion of our revenues and
    operating income from our graduate programs.
As of December 31, 2008, 52.9% of our students were
    graduate students, which includes master's and doctoral
    students. This percentage has declined in recent periods, and we
    anticipate that this percentage will continue to decline over
    time, due to our recent growth emphasis in our undergraduate
    business and liberal arts programs. If we were to experience any
    event that adversely affected our graduate offerings or the
    attractiveness of our programs to prospective graduate students,
    our business, prospects, financial condition, and results of
    operations could be significantly and adversely affected.
We may
    incur liability for the unauthorized duplication or distribution
    of class materials posted online for class
    discussions.
In some instances, our faculty members or our students may post
    various articles or other third-party content on class
    discussion boards. Third parties may raise claims against us for
    the unauthorized duplication of material posted online for class
    discussions. Any such claims could subject us to costly
    litigation and impose a significant strain on our financial
    resources and management personnel regardless of whether the
    claims have merit. Our general liability insurance may not cover
    potential claims of this type adequately or at all, and we may
    be required to alter the content of our courses or pay monetary
    damages, which may be significant.
The
    provider of third-party software for our online classroom has
    been acquired by a competitor, and we may have difficulty
    maintaining the software required for our online classroom or
    updating it for future technological changes, which could
    adversely affect our performance.
Our online classroom employs the ANGEL Learning Management Suite
    pursuant to a license from ANGEL Learning, Inc. The ANGEL system
    is a web-based portal that stores, manages, and delivers course
    content; enables assignment uploading; provides interactive
    communication between students and faculty; and supplies online
    evaluation tools. In May 2009, ANGEL Learning, Inc. was acquired
    by Blackboard, Inc., a competitor in the provision of online
    educational software and tools. We now rely on Blackboard, Inc.
    for
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administrative support of the ANGEL system and, if Blackboard,
    Inc. ceased to operate or was unable or unwilling to continue to
    provide us with services or upgrades on a timely basis, we may
    have difficulty maintaining the software required for our online
    classroom or updating it for future technological changes. We
    cannot predict what effect, if any, Blackboard, Inc.'s
    acquisition of ANGEL Learning, Inc. will have on our use of, or
    the support for or the efficacy of, the ANGEL Learning
    Management Suite. Any failure to maintain our online classroom
    would have an adverse impact on our operations, damage our
    reputation, and limit our ability to attract and retain students.
Seasonal
    and other fluctuations in our results of operations could
    adversely affect the trading price of our common
    stock.
Our net revenue and operating results normally fluctuate as a
    result of seasonal variations in our business, principally due
    to changes in enrollment, and are typically lowest in our second
    fiscal quarter and highest in our fourth fiscal quarter.
    Accordingly, our results in any quarter may not indicate the
    results we may achieve in any subsequent quarter or for the full
    year. Student population varies as a result of new enrollments,
    graduations, and student attrition. A significant portion of our
    general and administrative expenses do not vary proportionately
    with fluctuations in revenues. We expect quarterly fluctuations
    in operating results to continue as a result of seasonal
    enrollment patterns. Such patterns may change, however, as a
    result of new program introductions, the timing of colloquia and
    events, and increased enrollments of students. These
    fluctuations may result in volatility or have an adverse effect
    on the market price of our common stock.
Our
    loan agreement may restrict our operations and our ability to
    complete certain transactions.
Our loan agreement, which we entered into in connection with the
    purchase of our campus in April 2009, imposes certain operating
    and financial restrictions on us. Without the consent of our
    lender, these restrictions generally limit our ability to, among
    other things:
•
incur additional indebtedness or liens;
•
sell, assign, lease, transfer or otherwise dispose of any part
    of our assets other than in the ordinary course of business;
•
make investments or capital contributions to any individual or
    entity;
•
enter into any consolidation, merger, or other combination, or
    become a partner in a partnership, a member of a joint venture,
    or a member of a limited liability company;
•
acquire or purchase a business or all or substantially all of
    the assets of a business in an aggregate amount exceeding an
    amount equal to 25% of our tangible net worth; and
•
engage in any business activities substantially different from
    our present business.
In addition, the loan agreement requires us to maintain a
    maximum funded debt to adjusted EBITDA ratio, a minimum basic
    fixed charge coverage ratio and a minimum tangible net worth
    ratio, in each case as such terms are defined in the loan
    agreement. We cannot assure you that these covenants will not
    adversely affect our ability to finance our future operations or
    capital needs or to pursue available business opportunities. A
    breach of any of these covenants or our inability to maintain
    the required financial ratios could result in a default in
    respect of the related indebtedness. If a default occurs, the
    affected lenders could elect to declare the indebtedness,
    together with accrued interest and other fees, to be immediately
    due and payable.
Our
    current success and future growth depend on the continued
    acceptance of the Internet and the corresponding growth in users
    seeking educational services on the Internet.
Our business relies in part on the Internet for its success. A
    number of factors could inhibit the continued acceptance of the
    Internet and adversely affect our profitability, including:
•
inadequate Internet infrastructure;
•
security and privacy concerns;
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•
the unavailability of cost-effective Internet service and other
    technological factors; and
•
changes in government regulation of Internet use.
If Internet use decreases, or if the number of Internet users
    seeking educational services on the Internet does not increase,
    our business may not grow as planned.
Government
    regulations relating to the Internet could increase our cost of
    doing business, affect our ability to grow or otherwise have a
    material adverse effect on our business.
The increasing popularity and use of the Internet and other
    online services has led and may lead to the adoption of new laws
    and regulatory practices in the United States or foreign
    countries and to new interpretations of existing laws and
    regulations. These new laws and interpretations may relate to
    issues such as online privacy, copyrights, trademarks and
    service marks, sales taxes, fair business practices, and the
    requirement that online education institutions qualify to do
    business as foreign corporations or be licensed in one or more
    jurisdictions where they have no physical location or other
    presence. New laws and regulations or interpretations thereof
    related to doing business over the Internet could increase our
    costs and materially and adversely affect our business,
    prospects, financial condition, and results of operations.
We may
    incur significant costs complying with the Americans with
    Disabilities Act and similar laws.
Under the Americans with Disabilities Act of 1990, or the ADA,
    all public accommodations must meet federal requirements related
    to access and use by disabled persons. Additional federal,
    state, and local laws also may require modifications to our
    properties, or restrict our ability to renovate our properties.
    For example, the Fair Housing Amendments Act of 1988, or FHAA,
    requires apartment properties first occupied after
    March 13, 1990 to be accessible to the handicapped. We have
    not conducted an audit or investigation of all of our properties
    to determine our compliance with present requirements.
    Noncompliance with the ADA or FHAA could result in the
    imposition of fines or an award or damages to private litigants
    and also could result in an order to correct any non-complying
    feature. We cannot predict the ultimate amount of the cost of
    compliance with the ADA, FHAA, or other legislation. If we incur
    substantial costs to comply with the ADA, FHAA, or any other
    legislation, we could be materially and adversely affected.
Our
    failure to comply with environmental laws and regulations
    governing our activities could result in financial penalties and
    other costs.
We use hazardous materials at our ground campus and generate
    small quantities of waste, such as used oil, antifreeze, paint,
    car batteries, and laboratory materials. As a result, we are
    subject to a variety of environmental laws and regulations
    governing, among other things, the use, storage, and disposal of
    solid and hazardous substances and waste, and the
clean-up
of
    contamination at our facilities or off-site locations to which
    we send or have sent waste for disposal. In the event we do not
    maintain compliance with any of these laws and regulations, or
    are responsible for a spill or release of hazardous materials,
    we could incur significant costs for
clean-up,
damages, and fines, or penalties which could adversely impact
    our business, prospects, financial condition, and results of
    operations.
If we
    expand in the future into new markets outside the United States,
    we would be subject to risks inherent in non-domestic
    operations.
If we acquire schools or establish programs in new markets
    outside the United States, we will face risks that are inherent
    in non-domestic operations, including the complexity of
    operations across borders, new regulatory regimes, currency
    exchange rate fluctuations, monetary policy risks, such as
    inflation, hyperinflation and deflation, and potential political
    and economic instability in the countries into which we expand.
Our
    failure to obtain additional capital in the future could
    adversely affect our ability to grow.
We believe that funds from operations, cash on hand, and
    investments will be adequate to fund our current operating and
    growth plans for the foreseeable future. However, we may need
    additional financing in
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order to finance our continued growth, particularly if we pursue
    any acquisitions. The amount, timing, and terms of such
    additional financing will vary principally depending on the
    timing and size of new program offerings, the timing and size of
    acquisitions we may seek to consummate, and the amount of cash
    flows from our operations. To the extent that we require
    additional financing in the future, such financing may not be
    available on terms acceptable to us or at all, and,
    consequently, we may not be able to fully implement our growth
    strategy.
If we
    are not able to integrate acquired schools, our business could
    be harmed.
From time to time, we may pursue acquisitions of other schools.
    Integrating acquired operations into our institution involves
    significant risks and uncertainties, including:
•
inability to maintain uniform standards, controls, policies, and
    procedures;
•
distraction of management's attention from normal business
    operations during the integration process;
•
inability to obtain, or delay in obtaining, approval of the
    acquisition from the necessary regulatory agencies, or the
    imposition of operating restrictions or a letter of credit
    requirement on us or on the acquired school by any of those
    regulatory agencies;
•
expenses associated with the integration efforts; and
•
unidentified issues not discovered in our due diligence process,
    including legal contingencies.
If we complete one or more acquisitions and are unable to
    integrate acquired operations successfully, our business could
    suffer.
Risks
    Related to the Offering
Our
    executive officers, directors, and principal existing
    stockholders own a large percentage of our voting stock, which
    may allow them to collectively control substantially all matters
    requiring stockholder approval and, in the case of certain of
    our principal stockholders, will have other unique rights that
    may afford them access to our management.
In connection with our initial public offering, certain of our
    stockholders entered into a proxy and voting agreement, pursuant
    to which such persons granted to the Richardson Voting Group a
    five-year irrevocable proxy to exercise voting authority with
    respect to certain shares of our common stock held by such
    persons, for so long as such shares are held by such persons.
    Upon the completion of our initial public offering, as a result
    of the proxy and voting agreement, the Richardson Voting Group
    had the power to exercise voting authority with respect to 42.9%
    of our common stock. Under the terms of the proxy and voting
    agreement, if any person party to the voting agreement transfers
    shares covered by the proxy in registered or open-market
    transactions, the proxy is no longer effective as to such
    shares. Accordingly, the number of shares as to which the
    Richardson Voting Group has voting power will decrease over time
    as shares held by other parties to the proxy and voting
    agreement are sold. See "Beneficial Ownership of Common
    Stock."
As a result of the proxy and voting agreement, the Richardson
    Voting Group could significantly influence the outcome of any
    actions requiring the vote or consent of stockholders, including
    elections of directors, amendments to our certificate of
    incorporation and bylaws, mergers, going private transactions,
    and other extraordinary transactions, and any decisions
    concerning the terms of any of these transactions. The ownership
    and voting positions of these stockholders may have the effect
    of delaying, deterring, or preventing a change in control or a
    change in the composition of our Board of Directors. These
    stockholders may also use their contractual rights, including
    access to management, and their large ownership position to
    address their own interests, which may be different from those
    of our other stockholders.
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Your
    percentage ownership in us may be diluted by future issuances of
    capital stock, which could reduce your influence over matters on
    which stockholders vote.
Our Board of Directors has the authority, without action or vote
    of our stockholders, to issue all or any part of our authorized
    but unissued shares of common stock, including shares issuable
    upon the exercise of options, shares that may be issued to
    satisfy our payment obligations under our incentive plans, or
    shares of our authorized but unissued preferred stock. Issuances
    of common stock or voting preferred stock would reduce your
    influence over matters on which our stockholders vote, and, in
    the case of issuances of preferred stock, likely would result in
    your interest in us being subject to the prior rights of holders
    of that preferred stock.
Provisions
    in our charter documents and the Delaware General Corporation
    Law could make it more difficult for a third party to acquire us
    and could discourage a takeover and adversely affect existing
    stockholders.
Anti-takeover provisions of our certificate of incorporation,
    bylaws, the Delaware General Corporation Law, or DGCL, and
    regulations of state and federal education agencies could
    diminish the opportunity for stockholders to participate in
    acquisition proposals at a price above the then-current market
    price of our common stock. For example, while we have no present
    plans to issue any preferred stock, our Board of Directors,
    without further stockholder approval, may issue shares of
    undesignated preferred stock and fix the powers, preferences,
    rights, and limitations of such class or series, which could
    adversely affect the voting power of your shares. In addition,
    our bylaws provide for an advance notice procedure for
    nomination of candidates to our Board of Directors that could
    have the effect of delaying, deterring, or preventing a change
    in control. Further, as a Delaware corporation, we are subject
    to provisions of the DGCL regarding "business
    combinations," which can deter attempted takeovers in
    certain situations. The approval requirements of the Department
    of Education, our regional accrediting commission, and state
    education agencies for a change in control transaction could
    also delay, deter, or prevent a transaction that would result in
    a change in control. We may, in the future, consider adopting
    additional anti-takeover measures. The authority of our board to
    issue undesignated preferred or other capital stock and the
    anti-takeover provisions of the DGCL, as well as other current
    and any future anti-takeover measures adopted by us, may, in
    certain circumstances, delay, deter, or prevent takeover
    attempts and other changes in control of the company not
    approved by our Board of Directors.
The
    price of our common stock may be volatile, and as a result
    returns on an investment in our common stock may be
    volatile.
We completed our initial public offering in November 2008. Given
    the relatively limited public float since that time, trading in
    our common stock has also been limited and, at times, volatile.
    An active trading market for our common stock may not be
    sustained, and the trading price of our common stock may
    fluctuate substantially.
The market price of our common stock could fluctuate
    significantly for various reasons, which include:
•
our quarterly or annual earnings or earnings of other companies
    in our industry;
•
the public's reaction to our press releases, our other
    public announcements, and our filings with the SEC;
•
changes in earnings estimates or recommendations by research
    analysts who track our common stock or the stocks of other
    companies in our industry;
•
changes in our number of enrolled students;
•
new or proposed laws or regulations or new or proposed
    interpretations of laws or regulations applicable to our
    business;
•
seasonal variations in our student population;
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•
damage to our reputation or other adverse effects as a result of
    negative publicity in the media, in industry or governmental
    reports, or otherwise, affecting us or other companies in the
    for-profit postsecondary education sector;
•
the availability and cost of Title IV funds, other student
    financial aid, and private loans;
•
the failure to maintain or keep in good standing our regulatory
    approvals and accreditations;
•
changes in accounting standards, policies, guidance,
    interpretations, or principles;
•
changes in general conditions in the U.S. and global
    economies or financial markets, including those resulting from
    war, incidents of terrorism, or responses to such events;
•
an adverse economic or other development that affects job
    prospects in our core disciplines;
•
litigation involving our company, or investigations or audits by
    regulators into the operations of our company or our
    competitors, including the investigation of Grand Canyon
    University currently being conducted by the Office of Inspector
    General of the Department of Education, and the pending
qui
    tam
action regarding the manner in which we have compensated
    our enrollment personnel; and
•
sales of common stock by our directors, executive officers, and
    significant stockholders.
In addition, in recent years, the stock market has experienced
    extreme price and volume fluctuations. This volatility has had a
    significant impact on the market price of securities issued by
    many companies, including companies in our industry. The changes
    frequently appear to occur without regard to the operating
    performance of these companies. The price of our common stock
    could fluctuate based upon factors that have little or nothing
    to do with our company, and these fluctuations could materially
    reduce our stock price.
In the past, following periods of volatility in the market price
    of a company's securities, securities class action
    litigation has often been brought against that company. Because
    of the potential volatility of our stock price, we may become
    the target of securities litigation in the future. Securities
    litigation could result in substantial costs and divert
    management's attention and resources from our business.
If
    securities analysts do not publish research or reports about our
    business or if they downgrade their evaluations of our stock,
    the price of our stock could decline.
The trading market for our common stock depends in part on the
    research and reports that industry or financial analysts publish
    about us or our business. If one or more of the analysts
    covering us downgrade their estimates or evaluations of our
    stock, the price of our stock could decline. If one or more of
    these analysts cease coverage of our company, we could lose
    visibility in the market for our stock, which in turn could
    cause our stock price to decline.
We
    currently do not intend to pay dividends on our common stock
    and, consequently, your only opportunity to achieve a return on
    your investment is if the price of our common stock
    appreciates.
We do not expect to pay dividends on shares of our common stock
    in the foreseeable future and intend to use cash to grow our
    business. The payment of cash dividends in the future, if any,
    will be at the discretion of our Board of Directors and will
    depend upon such factors as earnings levels, capital
    requirements, our overall financial condition, and any other
    factors deemed relevant by our Board of Directors. Consequently,
    your only opportunity to achieve a positive return on your
    investment in us will be if the market price of our common stock
    appreciates.
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We
    will have broad discretion in applying the net proceeds of this
    offering and may not use those proceeds in ways that will
    enhance the market value of our common stock.
We have significant flexibility in applying the net proceeds we
    will receive in this offering. We will use the proceeds that we
    receive from the sale of stock in this offering to pay the
    expenses of this offering and for general corporate purposes. As
    part of your investment decision, you will not be able to assess
    or direct how we apply these net proceeds. If we do not apply
    these funds effectively, we may lose significant business
    opportunities. Furthermore, our stock price could decline if the
    market does not view our use of the net proceeds from this
    offering favorably.
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FORWARD-LOOKING
    STATEMENTS
This prospectus contains "forward-looking statements"
    within the meaning of Section 27A of the Securities Act of
    1933, as amended, or the Securities Act, and Section 21E of
    the Exchange Act. Forward-looking statements include information
    relating to future events, future financial performance,
    strategies, expectations, competitive environment, regulation,
    and availability of resources, and include, without limitation,
    statements regarding: proposed new programs; expectations that
    regulatory developments or other matters will not have a
    material adverse effect or material impact on our financial
    position, results of operations, or liquidity; statements
    concerning projections, predictions, expectations, estimates, or
    forecasts as to our business, financial and operational results,
    and future economic performance; and statements of
    management's goals and objectives and other similar
    expressions concerning matters that are not historical facts.
    Words such as "may," "should,"
    "could," "would," "predicts,"
    "potential," "continue,"
    "expects," "anticipates,"
    "future," "intends," "plans,"
    "believes," "estimates" and similar
    expressions, as well as statements in future tense, identify
    forward-looking statements.
Forward-looking statements should not be read as a guarantee of
    future performance or results, and will not necessarily be
    accurate indications of the times at, or by, which such
    performance or results will be achieved. Forward-looking
    statements are based on information available at the time those
    statements are made or management's good faith belief as of
    that time with respect to future events, and are subject to
    risks and uncertainties that could cause actual performance or
    results to differ materially from those expressed in or
    suggested by the forward-looking statements. Important factors
    that could cause such differences include, but are not limited
    to:
•
our failure to comply with the extensive regulatory framework
    applicable to our industry, including Title IV of the
    Higher Education Act and the regulations thereunder, state laws
    and regulatory requirements, and accrediting commission
    requirements;
•
the results of the ongoing investigation by the Department of
    Education's Office of Inspector General and the pending
qui tam
action regarding the manner in which we have
    compensated our enrollment personnel, and possible remedial
    actions or other liability resulting therefrom;
•
the ability of our students to obtain federal Title IV
    funds, state financial aid, and private financing;
•
risks associated with changes in applicable federal and state
    laws and regulations and accrediting commission standards;
•
we experience a change in control under applicable regulatory or
    accrediting standards, and we are unable to obtain appropriate
    approvals for such an event in a timely manner, or at all;
•
our ability to hire and train new, and develop and train
    existing, enrollment counselors;
•
the pace of growth of our enrollment;
•
our ability to convert prospective students to enrolled students
    and to retain active students;
•
our success in updating and expanding the content of existing
    programs and developing new programs in a cost-effective manner
    or on a timely basis;
•
industry competition, including competition for qualified
    executives and other personnel;
•
risks associated with the competitive environment for marketing
    our programs;
•
failure on our part to keep up with advances in technology that
    could enhance the online experience for our students;
•
the extent to which obligations under our loan agreement,
    including the need to comply with restrictive and financial
    covenants and to pay principal and interest payments, limits our
    ability to conduct our operations or seek new business
    opportunities;
•
our ability to manage future growth effectively;
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•
general adverse economic conditions or other developments that
    affect job prospects in our core disciplines; and
•
other factors discussed under the headings "Risk
    Factors" and "Regulation" in this prospectus, and
    in the sections entitled "Business," which is
    incorporated by reference into this prospectus from our Annual
    Report on
Form 10-K
for the fiscal year ended December 31, 2008, and
    "Management's Discussion and Analysis of Financial
    Condition and Results of Operations," which is incorporated
    by reference into this prospectus from our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2008, and our
    Quarterly Reports on
Form 10-Q
for our quarters ended March 31, 2009 and June 30,
    2009, as applicable.
Forward-looking statements speak only as of the date the
    statements are made. You should not put undue reliance on any
    forward-looking statements. We assume no obligation to update
    forward-looking statements to reflect actual results, changes in
    assumptions, or changes in other factors affecting
    forward-looking information, except to the extent required by
    applicable securities laws. If we do update one or more
    forward-looking statements, no inference should be drawn that we
    will make additional updates with respect to those or other
    forward-looking statements.
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USE OF
    PROCEEDS
We estimate that the proceeds from the sale of
    1,000,000 shares of common stock offered by us in this
    offering will be approximately
    $      million, based on an
    assumed offering price of $      per
    share, the last reported sale price of our common stock on The
    Nasdaq Global Market on August   , 2009, and
    after deducting the underwriting discounts and commissions and
    estimated offering expenses payable by us. Each $1.00 increase
    or decrease in the assumed public offering price of
    $      per share would increase or
    decrease, as applicable, the net proceeds to us by approximately
    $      million, assuming the
    number of shares offered by us as set forth on the cover of this
    prospectus remains the same and after deducting estimated
    underwriting discounts and commissions payable by us. We will
    not receive any proceeds from the sale of shares by the selling
    stockholders.
We intend to use the net proceeds we receive from this offering
    to pay transaction fees and expenses of approximately
    $      million, and for working
    capital and general corporate purposes. Our management will have
    broad discretion in the application of such remaining net
    proceeds from this offering.
PRICE
    RANGE OF COMMON STOCK
Our common stock has traded on the Nasdaq Global Market under
    the symbol "LOPE" since it began trading on
    November 20, 2008. Our initial public offering was priced
    at $12.00 per share on November 19, 2008. The following
    table sets forth, for the periods indicated, the high and low
    sales prices for our common stock as reported on the Nasdaq
    Global Market.
High
Low
2008
Fourth Quarter (from November 20, 2008)
$
19.12
$
9.49
2009
First Quarter
$
20.80
$
12.53
Second Quarter
$
17.35
$
12.74
Third Quarter (through August 24, 2009)
$
19.12
$
15.69
On August 25, 2009, the last reported sale price of our common
    stock on the Nasdaq Global Market was $18.58. As of such date,
    we had approximately 34 holders of record of our common stock.
DIVIDEND
    POLICY
We do not anticipate declaring or paying any cash dividends on
    our common stock in the foreseeable future. The payment of any
    dividends in the future will be at the discretion of our Board
    of Directors and will depend upon our financial condition,
    results of operations, earnings, capital requirements,
    contractual restrictions, outstanding indebtedness, and other
    factors deemed relevant by our board. As a result, you will need
    to sell your shares of common stock to realize a return on your
    investment, and you may not be able to sell your shares at or
    above the price you paid for them.
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CAPITALIZATION
The following table sets forth our cash and cash equivalents and
    our capitalization as of June 30, 2009:
•
on an actual basis; and
•
on an as adjusted basis to reflect the receipt of the estimated
    net proceeds from the sale by us of 1,000,000 shares of
    common stock in this offering at the assumed public offering
    price of $18.58 per share (the last reported sale price of
    our common stock on August 25, 2009), after deducting the
    estimated underwriting discounts and commissions and estimated
    offering expenses payable by us.
You should read this table together with "Use of
    Proceeds," "Management's Discussion and Analysis
    of Financial Condition and Results of Operations,"
    "Description of Capital Stock" and our consolidated
    financial statements and related notes included elsewhere in or
    incorporated by reference into this prospectus.
As of June 30, 2009
Actual
As Adjusted
(Unaudited)
(In thousands, except share data)
Cash and cash
    equivalents
(1)
$
24,742
$
Capital lease obligations (including short-term)
2,013
Other indebtedness (including short-term indebtedness)
27,681
Stockholders' equity:
Preferred stock, $0.01 par value, 10,000,000 shares
    authorized, no shares issued and outstanding, actual and as
    adjusted
—
—
Common stock, $0.01 par value, 100,000,000 shares
    authorized, 44,576,417 shares issued and outstanding,
    actual; 100,000,000 shares authorized,
    45,576,417 shares issued and outstanding, as adjusted
446
Additional paid-in
    capital
(1)
52,469
Accumulated and other comprehensive income
21
Accumulated earnings
1,029
Total stockholders'
    equity
(1)
53,965
Total capitalization
$
83,659
$
(1)
Each $1.00 increase or decrease in the assumed public offering
    price of $      per share (the last
    reported sale price of our common stock
    on          ,
    2009) would increase or decrease, respectively, the amount
    of cash and cash equivalents, additional paid-in capital and
    total stockholders' equity, in each case by approximately
    $      million, assuming the
    number of shares offered by us, as set forth on the cover of
    this prospectus, remains the same and after deducting the
    estimated underwriting discounts and commissions payable to us.
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REGULATION
We are subject to extensive regulation by state education
    agencies, accrediting commissions, and the federal government
    through the Department of Education under the Higher Education
    Act. The regulations, standards, and policies of these agencies
    cover the vast majority of our operations, including our
    educational programs, facilities, instructional and
    administrative staff, administrative procedures, marketing,
    recruiting, financial operations, and financial condition.
As an institution of higher education that grants degrees and
    certificates, we are required to be authorized by appropriate
    state education authorities. In addition, in order to
    participate in the federal student financial aid programs, we
    must be accredited by an accrediting commission recognized by
    the Department of Education. Accreditation is a non-governmental
    process through which an institution submits to qualitative
    review by an organization of peer institutions, based on the
    standards of the accrediting commission and the stated aims and
    purposes of the institution. The Higher Education Act requires
    accrediting commissions recognized by the Department of
    Education to review and monitor many aspects of an
    institution's operations and to take appropriate action if
    the institution fails to meet the accrediting commission's
    standards.
Our operations are also subject to regulation by the Department
    of Education due to our participation in federal student
    financial aid programs under Title IV of the Higher
    Education Act. Those Title IV programs include educational
    loans with below-market interest rates that are guaranteed by
    the federal government in the event of a student's default
    on repaying the loan, and also grant programs for students with
    demonstrated financial need. To participate in the Title IV
    programs, a school must receive and maintain authorization by
    the appropriate state education agency or agencies, be
    accredited by an accrediting commission recognized by the
    Department of Education, and be certified as an eligible
    institution by the Department of Education.
Our business activities are planned and implemented to comply
    with the standards of these regulatory agencies. We employ a
    director of compliance who is knowledgeable about regulatory
    matters relevant to student financial aid programs and our Chief
    Financial Officer, Chief Risk Officer, and General Counsel also
    provide oversight designed to ensure that we meet the
    requirements of our regulated operating environment.
State
    Education Licensure and Regulation
We are authorized to offer our educational programs by the
    Arizona State Board for Private Postsecondary Education, the
    regulatory agency governing private postsecondary educational
    institutions in the State of Arizona, where we are located. We
    do not presently have campuses in any states other than Arizona.
    We are required by the Higher Education Act to maintain
    authorization from the Arizona State Board for Private
    Postsecondary Education in order to participate in the
    Title IV programs. This authorization is very important to
    us and our business. To maintain our state authorization, we
    must continuously meet standards relating to, among other
    things, educational programs, facilities, instructional and
    administrative staff, marketing and recruitment, financial
    operations, addition of new locations and educational programs,
    and various operational and administrative procedures. Failure
    to comply with the requirements of the Arizona State Board for
    Private Postsecondary Education could result in us losing our
    authorization to offer our educational programs, which would
    cause us to lose our eligibility to participate in the
    Title IV programs and which, in turn, could force us to
    cease operations. Alternatively, the Arizona State Board for
    Private Postsecondary Education could restrict our ability to
    offer certain degree programs.
Most other states impose regulatory requirements on
out-of-state
educational institutions operating within their boundaries, such
    as those having a physical facility or conducting certain
    academic activities within the state. State laws establish
    standards in areas such as instruction, qualifications of
    faculty, administrative procedures, marketing, recruiting,
    financial operations, and other operational matters, some of
    which are different than the standards prescribed by the
    Department of Education or the Arizona State Board for Private
    Postsecondary Education. Laws in some states limit schools'
    ability to offer educational programs and award degrees to
    residents of those states. Some states also prescribe financial
    regulations that are different from those of the Department of
    Education, and many require the posting of surety bonds.
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In addition, several states have sought to assert jurisdiction
    over educational institutions offering online degree programs
    that have no physical location or other presence in the state
    but that have some activity in the state, such as enrolling or
    offering educational services to students who reside in the
    state, employing faculty who reside in the state, or advertising
    to or recruiting prospective students in the state. State
    regulatory requirements for online education vary among the
    states, are not well developed in many states, are imprecise or
    unclear in some states, and can change frequently. New laws,
    regulations, or interpretations related to doing business over
    the Internet could increase our cost of doing business and
    affect our ability to recruit students in particular states,
    which could, in turn, negatively affect enrollments and revenues
    and have a material adverse effect on our business.
We have determined that our activities in certain states
    constitute a presence requiring licensure or authorization under
    the requirements of the state education agency in those states.
    In other states, we have obtained approvals as we have
    determined necessary in connection with our marketing and
    recruiting activities or where we have determined that our
    licensure or authorization can facilitate the teaching
    certification process in a particular state for graduates of our
    College of Education. We review the licensure requirements of
    other states when appropriate to determine whether our
    activities in those states constitute a presence or otherwise
    require licensure or authorization by the respective state
    education agencies. Because state regulatory requirements,
    including agency interpretations, can change frequently, and
    because we enroll students in all 50 states and the
    District of Columbia, we expect that state regulatory
    authorities in states where we are not currently licensed or
    authorized will request that we seek licensure or authorization
    in their states in the future. Although we believe that we will
    be able to comply with additional state licensing or
    authorization requirements that may arise or be asserted in the
    future, if we fail to comply with state licensing or
    authorization requirements for a state, or fail to obtain
    licenses or authorizations when required, we could lose our
    state licensure or authorization by that state or be subject to
    other sanctions, including restrictions on our activities in
    that state, fines, and penalties. While we do not believe that
    any of the states in which we are currently licensed or
    authorized, other than Arizona, are individually material to our
    operations, the loss of licensure or authorization in any state
    could prohibit us from recruiting prospective students or
    offering services to current students in that state, which could
    significantly reduce our enrollments.
State
    Professional Licensure
Many states have specific requirements that an individual must
    satisfy in order to be licensed as a professional in specified
    fields, including fields such as education and healthcare. These
    requirements vary by state and by field. A student's
    success in obtaining licensure following graduation typically
    depends on several factors, including the background and
    qualifications of the individual graduate, as well as the
    following factors, among others:
•
whether the institution and the program were approved by the
    state in which the graduate seeks licensure, or by a
    professional association;
•
whether the program from which the student graduated meets all
    requirements for professional licensure in that state;
•
whether the institution and the program are accredited and, if
    so, by what accrediting commissions; and
•
whether the institution's degrees are recognized by other
    states in which a student may seek to work.
Many states also require that graduates pass a state test or
    examination as a prerequisite to becoming certified in certain
    fields, such as teaching and nursing. Many states will certify
    individuals if they have already been certified in another state.
Our College of Education is approved by the Arizona State Board
    of Education to offer Institutional Recommendations
    (credentials) for the certification of elementary, secondary,
    and special education teachers and school administrators. Our
    College of Nursing and Health Services is approved by the
    Arizona State Board of Nursing for the Bachelor of Science in
    Nursing and Master of Science — Nursing degrees. Due
    to
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varying requirements for professional licensure in each state,
    we inform students of the risks associated with obtaining
    professional licensure and that it is each student's
    responsibility to determine what state, local, or professional
    licensure and certification requirements are necessary in his or
    her individual state.
Accreditation
We have been continuously accredited since 1968 by the Higher
    Learning Commission and its predecessor, each a regional
    accrediting commission recognized by the Department of
    Education. Our accreditation was reaffirmed in 2007, and the
    next scheduled comprehensive evaluation will be conducted in
2016-2017.
Accreditation is a private, non-governmental process for
    evaluating the quality of educational institutions and their
    programs in areas including student performance, governance,
    integrity, educational quality, faculty, physical resources,
    administrative capability and resources, and financial
    stability. To be recognized by the Department of Education,
    accrediting commissions must adopt specific standards for their
    review of educational institutions, conduct peer-review
    evaluations of institutions, and publicly designate those
    institutions that meet their criteria. An accredited school is
    subject to periodic review by its accrediting commissions to
    determine whether it continues to meet the performance,
    integrity and quality required for accreditation.
There are six regional accrediting commissions recognized by the
    Department of Education, each with a specified geographic scope
    of coverage, which together cover the entire United States. Most
    traditional, public and private non-profit, degree-granting
    colleges and universities are accredited by one of these six
    regional accrediting commissions. The Higher Learning
    Commission, which accredits Grand Canyon University, is the same
    regional accrediting commission that accredits such universities
    as the University of Arizona, Arizona State University, and
    other degree-granting public and private colleges and
    universities in the states of Arizona, Arkansas, Colorado,
    Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri,
    Nebraska, New Mexico, North Dakota, Ohio, Oklahoma, South
    Dakota, West Virginia, Wisconsin, and Wyoming.
Accreditation by the Higher Learning Commission is important to
    us for several reasons, including the fact that it enables our
    students to receive Title IV financial aid. Other colleges
    and universities depend, in part, on an institution's
    accreditation in evaluating transfers of credit and applications
    to graduate schools. Employers rely on the accredited status of
    institutions when evaluating candidates' credentials, and
    students and corporate and government sponsors under tuition
    reimbursement programs look to accreditation for assurance that
    an institution maintains quality educational standards. If we
    fail to satisfy the standards of the Higher Learning Commission,
    we could lose our accreditation by that agency, which would
    cause us to lose our eligibility to participate in the
    Title IV programs.
The reauthorization of the Higher Education Act in 2008, and
    proposed regulations issued by the Department of Education,
    require accreditors to monitor the growth of programs at
    institutions that are experiencing significant enrollment
    growth. The Higher Learning Commission requires all affiliated
    institutions to complete an annual data report. If the
    non-financial data, particularly enrollment information, and any
    other information submitted by the institution indicate
    problems, rapid change, or significant growth, the Higher
    Learning Commission staff may require that the institution
    address any concerns arising from the data report in the next
    self-study and visit process. The Higher Learning Commission
    staff may also recommend that its Institutional Actions Council
    require additional monitoring. In addition, the Department of
    Education has proposed regulations, which could take effect on
    July 1, 2010, that would require the Higher Learning
    Commission to notify the Department of Education if an
    institution it accredits that offers distance learning programs
    experiences an increase in its headcount enrollment of 50% or
    more in any fiscal year, which could include us based on our
    historical enrollment growth rates, and the Department of
    Education may consider that information in connection with its
    own regulatory oversight activities.
In addition to institutional accreditation by the Higher
    Learning Commission, there are numerous specialized accrediting
    commissions that accredit specific programs or schools within
    their jurisdiction, many of which are in healthcare and
    professional fields. Accreditation of specific programs by one
    of these specialized accrediting commissions signifies that
    those programs have met the additional standards of those
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agencies. In addition to being accredited by the Higher Learning
    Commission, we also have the following specialized
    accreditations:
•
The Association of Collegiate Business Schools and Programs
    accredits our Master of Business Administration degree program
    and our Bachelor of Science degree programs in Accounting,
    Business Administration, and Marketing;
•
The Commission on Collegiate Nursing Education accredits our
    Bachelor of Science in Nursing and Master of Science —
    Nursing degree programs; and
•
The Commission on Accreditation of Athletic Training Education
    accredits our Athletic Training Program.
If we fail to satisfy the standards of any of these specialized
    accrediting commissions, we could lose the specialized
    accreditation for the affected programs, which could result in
    materially reduced student enrollments in those programs.
Regulation
    of Federal Student Financial Aid Programs
To be eligible to participate in the Title IV programs, an
    institution must comply with specific requirements contained in
    the Higher Education Act and the regulations issued thereunder
    by the Department of Education. An institution must, among other
    things, be licensed or authorized to offer its educational
    programs by the state in which it is physically located (in our
    case, Arizona) and maintain institutional accreditation by an
    accrediting commission recognized by the Department of
    Education. We submitted our application for recertification to
    participate in the Title IV programs to the Department of
    Education in March 2008 in anticipation of the expiration of our
    provisional certification on June 30, 2008. The Department
    of Education did not make a decision on our recertification
    application by June 30, 2008, and therefore our
    participation in the Title IV programs has been
    automatically extended on a
month-to-month
basis until the Department of Education makes its decision.
The substantial amount of federal funds disbursed to schools
    through the Title IV programs, the large number of students
    and institutions participating in these programs, and
    allegations of fraud and abuse by certain for-profit educational
    institutions have caused Congress to require the Department of
    Education to exercise considerable regulatory oversight over
    for-profit educational institutions. As a result, our
    institution is subject to extensive oversight and review.
    Because the Department of Education periodically revises its
    regulations (as it will do in 2009 in connection with the August
    2008 reauthorization of the Higher Education Act described
    below) and changes its interpretations of existing laws and
    regulations, we cannot predict with certainty how the
    Title IV program requirements will be applied in all
    circumstances.
Significant factors relating to the Title IV programs that
    could adversely affect us include the following:
Congressional action.
Congress must
    reauthorize the Higher Education Act on a periodic basis,
    usually every five to six years, and the most recent
    reauthorization occurred in August 2008. The reauthorized Higher
    Education Act reauthorized all of the Title IV programs in
    which we participate, but made numerous revisions to the
    requirements governing the Title IV programs, including
    provisions relating to the relationships between institutions
    and lenders that make student loans, student loan default rates,
    and the formula for revenue that institutions are permitted to
    derive from the Title IV programs. In addition, in 2007
    Congress enacted legislation that reduces interest rates on
    certain Title IV loans and government subsidies to lenders
    that participate in the Title IV programs. In May 2008,
    Congress enacted additional legislation to attempt to ensure
    that all eligible students will be able to obtain Title IV
    loans in the future, and that a sufficient number of lenders
    will continue to provide Title IV loans. Additional
    legislation is also pending in Congress. In addition, Congress
    is currently considering the Student Aid and Fiscal
    Responsibility Act which, among other things, could eliminate
    the federally guaranteed student loan program and require all
    future student loans to be made through the FDL program. We are
    not in a position to predict with certainty whether any of the
    pending legislation will be enacted. Although we are approved to
    participate in the FDL program, because a significant percentage
    of our revenue is derived from the Title IV programs, any
    action by Congress that significantly reduces Title IV
    program funding or our ability or the ability of our students to
    participate in the Title IV
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programs could increase our costs of compliance, reduce the
    ability of some students to finance their education at our
    institution, require us to seek to arrange for other sources of
    financial aid for our students and materially decrease our
    student enrollment. In addition, a transition to the FDL program
    could cause disruptions in the administration of Title IV
    program loans to our students if we or the Department of
    Education encounter difficulties with the systems or processes
    necessary for increased FDL program loans.
In addition, Congress must determine the funding levels for the
    Title IV programs on an annual basis through the budget and
    appropriations process, and may adjust those levels at other
    times. A reduction in federal funding levels for the
    Title IV programs could reduce the ability of some of our
    students to finance their education. The loss of or a
    significant reduction in Title IV program funds available
    to our students could reduce our enrollments and revenue.
Pending regulatory changes.
In connection with
    the 2008 reauthorization of the Higher Education Act, Congress
    directed the Department of Education to promulgate regulations
    to clarify and carry out the numerous revisions made in such
    reauthorization. In December 2008, the Department of Education
    established five negotiated rulemaking committees to begin to
    work on developing such regulations. Negotiated rulemaking is a
    process whereby the Department of Education consults with
    members of the postsecondary education community to identify
    issues of concern and attempts to agree on proposed regulatory
    revisions to address those issues before the Department of
    Education formally proposes any regulations. If the Department
    of Education and negotiators cannot reach consensus on their
    entire package of draft regulations, the Department of Education
    is authorized to propose regulations without being bound by any
    agreements made in the negotiation process. The five negotiated
    rulemaking committees established by the Department of Education
    were divided as follows, based on the regulatory issues to be
    covered by each committee:
Committee I — Lender and General Loan Issues
Committee II — School-Based Loan Issues
Committee III — Accreditation
Committee IV — Discretionary Grants
Committee V — General and Non-Loan Programmatic Issues
In July and August 2009, the Department of Education proposed
    and invited public comment on regulations relating to the issues
    covered by Committees I, II, and III, each of which
    reached consensus, and issues covered by Committee V, which did
    not reach consensus. The Department of Education has yet to
    propose regulations with regard to the topics covered by
    Committee IV, but the Department of Education is expected to
    issue such proposed regulations in the near future. Following
    review and consideration of any public comments, the Department
    of Education will publish final regulations relating to the
    issues covered by the negotiated rulemaking committees. If such
    final regulations are published by November 1, 2009, which
    is expected, such new regulations will take effect on
    July 1, 2010.
In May 2009, the Department of Education announced its intent to
    initiate another round of negotiated rulemaking to address
    regulations to improve the administration of the Title IV
    programs. The Department of Education has not yet identified the
    participants in this next round of negotiated rulemaking, but
    the process is expected to begin as soon as the fall of 2009,
    and is expected to address a number of significant issues,
    including: compensation paid by institutions to persons or
    entities engaged in student recruiting or admission activities;
    the determination of satisfactory academic progress under
    different academic calendars; state authorization as a component
    of institutional eligibility; the definition of a credit hour
    for purposes of determining program eligibility status,
    particularly in the context of awarding Pell Grants;
    verification of information included on student aid
    applications; and the definition of a high school diploma as a
    condition of a student's receipt of Title IV aid. We
    are still assessing the impact of these proposed regulations and
    the upcoming negotiated rulemaking on our financial aid policies
    and other plans and strategies.
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Eligibility and certification procedures.
Each
    institution must apply periodically to the Department of
    Education for continued certification to participate in the
    Title IV programs. Such recertification generally is
    required every six years, but may be required earlier, including
    when an institution undergoes a change in control. An
    institution may also come under the Department of
    Education's review when it expands its activities in
    certain ways, such as opening an additional location, adding a
    new educational program or modifying the academic credentials it
    offers. The Department of Education may place an institution on
    provisional certification status if it finds that the
    institution does not fully satisfy all of the eligibility and
    certification standards and in certain other circumstances, such
    as when an institution is certified for the first time or
    undergoes a change in control. During the period of provisional
    certification, the institution must comply with any additional
    conditions included in the school's program participation
    agreement with the Department of Education. In addition, the
    Department of Education may more closely review an institution
    that is provisionally certified if it applies for
    recertification or approval to open a new location, add an
    educational program, acquire another school, or make any other
    significant change. If the Department of Education determines
    that a provisionally certified institution is unable to meet its
    responsibilities under its program participation agreement, it
    may seek to revoke the institution's certification to
    participate in the Title IV programs without advance notice
    or opportunity for the institution to challenge the action.
    Students attending provisionally certified institutions remain
    eligible to receive Title IV program funds.
Since May 2005 we have been certified to participate in
    Title IV programs on a provisional basis. We submitted our
    application for recertification in March 2008 in anticipation of
    the expiration of our provisional certification on June 30,
    2008. The Department of Education did not make a decision on our
    recertification application by June 30, 2008, and therefore
    our provisional certification to participate in the
    Title IV programs has been automatically extended on a
month-to-month
basis until the Department of Education makes its decision.
    Since June 2008, we have filed updates with the Department of
    Education and communicated with Department of Education
    personnel in order to update our pending recertification
    application with relevant information, such as our status as a
    publicly-traded corporation and the identity of the members of
    our board of directors. Based on our provisional certification,
    the Department of Education may more closely review any
    application we may file for recertification, new locations, new
    educational programs, acquisitions of other schools, or other
    significant changes. For a school that is certified on a
    provisional basis, the Department of Education may revoke the
    institution's certification without advance notice or
    advance opportunity for the institution to challenge that
    action. For a school that is provisionally certified on a
month-to-month
basis, the Department of Education may allow the
    institution's certification to expire at the end of any
    month without advance notice, and without any formal procedure
    for review of such action. To our knowledge, such action is very
    rare and has only occurred upon a determination that an
    institution is in substantial violation of material
    Title IV requirements. For the foreseeable future, we do
    not have plans to initiate new educational programs, acquire
    other schools, or make other significant changes in our
    operations that would require approval of the Department of
    Education. Accordingly, we do not believe that our continued
    provisional certification on a
month-to-month
basis has had or will have any material impact on our
day-to-day
operations. However, there can be no assurance that the
    Department of Education will recertify us while the
    investigation by the Office of Inspector General of the
    Department of Education is being conducted, while the
qui
    tam
lawsuit is pending, or at all, or that it will not
    impose restrictions as a condition of approving our pending
    recertification application or with respect to any future
    recertification. If the Department of Education does not renew
    or withdraws our certification to participate in the
    Title IV programs at any time, our students would no longer
    be able to receive Title IV program funds. Similarly, the
    Department of Education could renew our certification, but
    restrict or delay our students' receipt of Title IV
    funds, limit the number of students to whom we could disburse
    such funds, or place other restrictions on us that could be
    similar to, or more or less restrictive than, the restrictions
    that the Department of Education imposed on us in connection
    with our recertification in 2005. Any of these outcomes would
    have a material adverse effect on our enrollments and us.
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Administrative capability.
Department of
    Education regulations specify extensive criteria by which an
    institution must establish that it has the requisite
    "administrative capability" to participate in the
    Title IV programs. To meet the administrative capability
    standards, an institution must, among other things:
•
comply with all applicable Title IV program requirements;
•
have an adequate number of qualified personnel to administer the
    Title IV programs;
•
have acceptable standards for measuring the satisfactory
    academic progress of its students;
•
not have student loan cohort default rates above specified
    levels;
•
have various procedures in place for awarding, disbursing and
    safeguarding Title IV funds and for maintaining required
    records;
•
administer the Title IV programs with adequate checks and
    balances in its system of internal controls;
•
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 financial aid counseling to its students;
•
refer to the Department of Education's Office of Inspector
    General any credible information indicating that any student,
    parent, employee, third-party servicer or other agent of the
    institution has engaged in any fraud or other illegal conduct
    involving the Title IV programs;
•
submit all required reports and financial statements in a timely
    manner; and
•
not otherwise appear to lack administrative capability.
If an institution fails to satisfy any of these criteria, the
    Department of Education may:
•
require the institution to repay Title IV funds its
    students previously received;
•
transfer the institution from the advance method of payment of
    Title IV funds to heightened cash monitoring status or the
    reimbursement system of payment;
•
place the institution on provisional certification
    status; or
•
commence a proceeding to impose a fine or to limit, suspend or
    terminate the institution's participation in the
    Title IV programs.
The Department of Education also recently published proposed
    revisions to the administrative capability regulations. These
    revisions include provisions related to (i) reporting to
    the Department of Education any reasonable reimbursements paid
    or provided by a lender to institutional employees with loan or
    other financial aid responsibilities and
    (ii) implementation of the new three year cohort default
    rate rules. Following review of any comments, the Department of
    Education will publish final regulations. If such final
    regulations are published by November 1, 2009, which is
    expected, such new regulations will be effective on July 1,
    2010. We will have to make certain administrative and reporting
    changes to adapt our systems and practices to meet the
    requirements of these new regulations when they take effect, and
    we are still assessing the other potential impacts, if any, of
    these proposed regulations on our business. In addition, as part
    of our transition from a "term-based" financial aid
    system (where all students, including online students, begin
    programs and are eligible to receive financial aid at periodic
    start dates pursuant to a calendar-based term system) to a
    "borrower-based" financial aid system (where each
    student may begin a program and be eligible to receive financial
    aid at any time throughout the year), we are converting our back
    office system from Datatel to a series of programs developed by
    Campus Management Corp., including CampusVue and CampusPortal.
    This conversion is intended to allow us to manage our
    non-traditional online students with greater ease and
    flexibility by providing for rolling and flexible start dates.
    If we do not effectively implement this system or if the system
    does not operate as intended, it could affect our ability to
    comply with the Department of Education's administrative
    capability requirements. If we are found not to have satisfied
    the Department of
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Education's administrative capability requirements, our
    students could lose, or be limited in their access to,
    Title IV program funding.
Financial responsibility.
The Higher Education
    Act and Department of Education regulations establish extensive
    standards of financial responsibility that institutions such as
    Grand Canyon University must satisfy in order to participate in
    the Title IV programs. The Department of Education
    evaluates institutions for compliance with these standards on an
    annual basis, based on the institution's annual audited
    financial statements, as well as when the institution applies to
    the Department of Education to have its eligibility to
    participate in the Title IV programs recertified. The most
    significant financial responsibility standard is the
    institution's composite score, which is derived from a
    formula established by the Department of Education based on
    three financial ratios:
•
equity ratio, which measures the institution's capital
    resources, financial viability and ability to borrow;
•
primary reserve ratio, which measures the institution's
    ability to support current operations from expendable
    resources; and
•
net income ratio, which measures the institution's ability
    to operate at a profit or within its means.
The Department of Education 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. The Department
    of Education then assigns a weighting percentage to each ratio
    and adds the weighted scores for the three ratios together to
    produce a composite score for the institution. The composite
    score for the institution's most recent fiscal year must be
    at least 1.5 for the institution to be deemed financially
    responsible without the need for further Department of Education
    oversight. In addition to having an acceptable composite score,
    an institution must, among other things, provide the
    administrative resources necessary to comply with Title IV
    program requirements, meet all of its financial obligations
    including required refunds to students and any Title IV
    liabilities and debts, be current in its debt payments, and not
    receive an adverse, qualified, or disclaimed opinion by its
    accountants in its audited financial statements.
When we were recertified by the Department of Education in 2005
    to continue participating in the Title IV programs, the
    Department of Education advised us that we did not satisfy its
    standards of financial responsibility, based on our fiscal year
    2004 financial statements, as submitted to the Department of
    Education. As a result of this and other concerns about our
    administrative capability, the Department of Education required
    us to post a letter of credit, accept restrictions on the growth
    of our program offerings and enrollment, and receive
    Title IV funds under the heightened cash monitoring system
    of payment rather than by advance payment. In October 2006, the
    Department of Education eliminated the letter of credit
    requirement and allowed the growth restrictions to expire, based
    upon its review of our fiscal year 2005 financial statements. We
    have subsequently submitted our fiscal year 2006, 2007, and 2008
    financial statements to the Department of Education as required,
    and we calculated that our composite score for each such fiscal
    year exceeded 1.5. We therefore believe that we meet the
    Department of Education's financial responsibility
    standards for our most recently completed fiscal year.
If the Department of Education were to determine that we did not
    meet the financial responsibility standards due to a failure to
    meet the composite score or other factors, we would expect to be
    able to establish financial responsibility on an alternative
    basis permitted by the Department of Education, which could
    include, in the Department's discretion, posting a letter
    of credit, accepting provisional certification, complying with
    additional Department of Education monitoring requirements,
    agreeing to receive Title IV program funds under an
    arrangement other than the Department of Education's
    standard advance funding arrangement, such as the reimbursement
    system of payment or heightened cash monitoring, and complying
    with or accepting other limitations on our ability to increase
    the number of programs we offer or the number of students we
    enroll.
The requirement to post a letter of credit or other sanctions
    imposed by the Department of Education could increase our cost
    of regulatory compliance and adversely affect our cash flows. If
    we are unable to meet the minimum composite score or comply with
    the other standards of financial responsibility, and could not
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post a required letter of credit or comply with the alternative
    bases for establishing financial responsibility, our students
    could lose their access to Title IV program funding.
Return of Title IV funds for students who
    withdraw.
When a student who has received
    Title IV funds withdraws from school, the institution must
    determine the amount of Title IV program funds the student
    has "earned." If the student withdraws during the
    first 60% of any period of enrollment or payment period, the
    amount of Title IV program funds that the student has
    earned is equal to a pro rata portion of the funds the student
    received or for which the student would otherwise be eligible.
    If the student withdraws after the 60% threshold, then the
    student is deemed to have earned 100% of the Title IV
    program funds he or she received. The institution must return
    the unearned Title IV program funds to the appropriate
    lender or the Department of Education in a timely manner, which
    is generally no later than 45 days after the date the
    institution determined that the student withdrew. If such
    payments are not timely made, the institution will be required
    to submit a letter of credit to the Department of Education
    equal to 25% of the Title IV funds that the institution
    should have returned for withdrawn students in its most recently
    completed fiscal year. Under Department of Education
    regulations, late returns of Title IV program funds for 5%
    or more of the withdrawn students in the audit sample in the
    institution's annual Title IV compliance audit for
    either of the institution's two most recent fiscal years or
    in a Department of Education program review triggers this letter
    of credit requirement. We did not exceed this 5% threshold in
    our annual Title IV compliance audit in our 2006, 2007, or
    2008 fiscal years.
The "90/10 Rule."
A requirement of
    the Higher Education Act, commonly referred to as the
    "90/10 Rule," that is applicable only to for-profit,
    postsecondary educational institutions like us, provides that an
    institution loses its eligibility to participate in the
    Title IV programs, if, under a complex regulatory formula
    that requires cash basis accounting and other adjustments to the
    calculation of revenue, the institution derives more than 90% of
    its revenues for each of two consecutive fiscal years from
    Title IV program funds. This rule provides that an
    institution that violates this revenue limit becomes ineligible
    to participate in the Title IV programs as of the first day
    of the fiscal year following the second consecutive fiscal year
    in which it exceeds the 90% threshold, and its period of
    ineligibility extends for at least two consecutive fiscal years.
    If an institution exceeds the 90% threshold for two consecutive
    fiscal years and it and its students have received Title IV
    funds during the period of ineligibility, the institution will
    be required to return those funds to the applicable lender or
    the Department of Education. If an institution's rate
    exceeds 90% for any single fiscal year, it will be placed on
    provisional certification for at least two fiscal years. The
    August 2008 reauthorization of the Higher Education Act included
    significant revisions to the "90/10 Rule" that became
    effective upon the date of the law's enactment.
Recent changes in federal law that increased Title IV grant
    and loan limits, and any additional increases in the future, may
    result in an increase in the revenues we receive from the
    Title IV programs, which could make it more difficult for
    us to satisfy the "90/10 Rule." In addition, economic
    downturns that adversely affect the employment circumstances of
    our students or their parents, or that reduce the availability
    of private loans for our students, could also increase their
    reliance on Title IV programs. However, such effects may be
    mitigated by other provisions of the 2008 Higher Education Act
    reauthorization that allow institutions, when calculating their
    compliance with this revenue test, to exclude from their
    Title IV revenues for a three-year period the additional
    federal student loan amounts that became available through the
    Unsubsidized Stafford Loan Program starting in July 2008, and to
    include more non-Title IV revenues, such as revenues from
    institutional loans under certain circumstances. Using the
    Department of Education's formula under the
"90/10 Rule"
that was in effect prior to the August 2008 reauthorization of
    the Higher Education Act, for our 2007 and 2008 fiscal years, we
    derived approximately 74.0% and 78.6%, respectively, of our
    revenues (calculated on a cash basis) from Title IV program
    funds. These rates have been reviewed by our financial
    accounting firm as reflected in the notes to our audited
    financial statements for each fiscal year. We are reviewing the
    Department of Education's proposed regulations and other
    factors bearing on the trends in our percentage under the 90/10
    Rule for our 2009 fiscal year and future years. However, as a
    result of recent changes in federal law that increased
    Title IV grant and loan limits, as well as the current
    economic downturn, which has adversely affected the employment
    circumstances of our students and their parents and increased
    their reliance on Title IV programs, we expect the
    percentage of our revenue that we receive from the Title IV
    programs to continue to increase in the future, making it more
    difficult for us to satisfy this requirement.
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Exceeding the 90% threshold such that we lost our eligibility to
    participate in the Title IV programs would have a material
    adverse effect on our business, prospects, financial condition,
    and results of operations.
Student loan defaults.
Under the Higher
    Education Act, an educational institution may lose its
    eligibility to participate in some or all of the Title IV
    programs if defaults by its students on the repayment of their
    FFEL student loans or Federal Direct Loans exceed certain
    levels. For each federal fiscal year, the Department of
    Education calculates a rate of student defaults for each
    institution (known as a "cohort default rate"). An
    institution's cohort default rate for a federal fiscal year
    historically has been calculated by determining the rate at
    which borrowers who became subject to their repayment obligation
    in one federal fiscal year default in that same year or by the
    end of the following federal fiscal year (the "two-year
    method"). The reauthorization of the Higher Education Act
    in 2008 extended the measurement period for cohort default rates
    so that the rate is calculated by determining the rate at which
    borrowers who became subject to their repayment obligation in
    one federal fiscal year default in that same year or by the end
    of the second following federal fiscal year (the
    "three-year method"), which is expected to increase
    cohort default rates for most if not all institutions.
The Department of Education has proposed a regulation indicating
    that it will begin to implement this extended measurement period
    for the cohort default rates that will be calculated for loans
    that enter repayment in federal fiscal year 2009, which is the
    year that ends on September 30, 2009. The Department of
    Education has proposed a transition period of three years during
    which it will calculate two cohort default rates for each
    institution for each of federal fiscal years 2009, 2010 and
    2011, with one such rate measured under the two-year method and
    the other such rate measured under the three-year method. The
    cohort default rates for federal fiscal year 2009, 2010 and
    2011, as calculated under the new three-year method, are not
    expected to be published until calendar years 2012, 2013 and
    2014.
The Department of Education will apply different legal
    thresholds to measure an institution's compliance under
    each set of rates. If the Department of Education notifies an
    institution that its cohort default rates exceed 25%, as
    calculated under the two-year method, for each of its three most
    recent federal fiscal years, or exceed 30%, as calculated under
    the three-year method, for each of the three most recent federal
    fiscal years, the institution's participation in the FFEL
    program, the FDL program and the Pell program ends 30 days
    after that notification, unless the institution appeals that
    determination in a timely manner on specified grounds and
    according to specified procedures. In addition, an
    institution's participation in the FFEL program and the FDL
    program ends 30 days after notification by the Department
    of Education that its most recent cohort default rate, as
    calculated under either the two-year method or the three-year
    method, is greater than 40%, unless the institution timely
    appeals that determination on specified grounds and according to
    specified procedures. An institution whose participation ends
    under either of these provisions may not participate in the
    relevant programs for the remainder of the fiscal year in which
    the institution receives the notification and for the next two
    fiscal years. If an institution's cohort default rate for
    any single federal fiscal year equals or exceeds 25% under the
    two-year method, or 30% under the three-year method, the
    Department of Education may place the institution on provisional
    certification status.
Our cohort default rates on FFEL program loans for the 2004,
    2005 and 2006 federal fiscal years, the three most recent years
    for which such rates have been calculated, were 1.4%, 1.8% and
    1.6%, respectively. Our draft cohort default rate for the 2007
    federal fiscal year is 1.4%. We expect our cohort default rate
    for the 2008 federal fiscal year to increase due primarily to
    the impact of current economic conditions on our students and
    former students, although we expect such rate to remain well
    below the Department of Education's thresholds.
Our students have begun the process of applying for loans under
    the FDL program for the fall of 2009. When these loans are
    disbursed, they will be combined with our students' FFEL
    loans in calculating our annual student loan cohort default
    rate. In such case, the potential sanctions discussed in this
    section would be based on the combined cohort default rate.
Incentive compensation rule.
An institution
    that participates in the Title IV programs may not provide
    any commission, bonus, or other incentive payment based directly
    or indirectly on success in securing enrollments or financial
    aid to any person or entity engaged in any student recruitment,
    admissions, or financial aid awarding activity. The Department
    of Education's regulations set forth 12 "safe
    harbors" which
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describe payments and arrangements that do not violate the
    incentive compensation rule. The Department of Education's
    regulations make clear that the safe harbors are not a complete
    list of permissible practices under this law. For example, one
    of these safe harbors permits adjustments to fixed salary for
    enrollment personnel provided that such adjustments are not made
    more than twice during any twelve month period, and that any
    adjustment is not based solely on the number of students
    recruited, admitted, enrolled, or awarded financial aid, but the
    regulations do not address other practices, such as the
    provision of non-cash awards to enrollment personnel. The
    restrictions of the incentive compensation rule also extend to
    any third-party companies that an educational institution
    contracts with for student recruitment, admissions, or financial
    aid awarding services. Since 2005, we have engaged Mind Streams,
    LLC to assist us with student recruitment activities.
In recent years, several for-profit education companies have
    been faced with whistleblower lawsuits, known as "qui
    tam" cases, brought by current or former employees alleging
    that their institution had made impermissible incentive
    payments. A
qui tam
case is a civil lawsuit brought by
    one or more individuals (a "relator") on behalf of the
    federal government for an alleged submission to the government
    of a false claim for payment. The relator, often a current or
    former employee, is entitled to a share of the government's
    recovery in the case. A
qui tam
action is always filed
    under seal and remains under seal until the government decides
    whether to intervene in the case. If the government intervenes,
    it takes over primary control of the litigation. If the
    government declines to intervene in the case, the relator may
    nonetheless elect to continue to pursue the litigation at his or
    her own expense on behalf of the government.
On September 11, 2008, we were served with a
qui tam
lawsuit that had been filed against us in August 2007, in
    the United States District Court for the District of Arizona by
    a then-current employee on behalf of the federal government. All
    proceedings in the lawsuit had been under seal until
    September 5, 2008, when the court unsealed the first
    amended complaint, which had been filed on August 11, 2008.
    The
qui tam
lawsuit alleges, among other things, that we
    violated the False Claims Act by knowingly making false
    statements, and submitting false records or statements, from at
    least 2001 to the present, to get false or fraudulent claims
    paid or approved, and asserts that we have improperly
    compensated certain of our enrollment counselors in violation of
    the Title IV law governing compensation of such employees,
    and as a result, improperly received Title IV program
    funds. The complaint specifically alleges that some of our
    compensation practices with respect to our enrollment personnel,
    including providing non-cash awards, have violated the
    Title IV law governing compensation. While we believe that
    our compensation policies and practices at issue in the
    complaint have not been based on success in enrolling students
    in violation of applicable law, the Department of
    Education's regulations and interpretations of the
    incentive compensation law do not establish clear criteria for
    compliance in all circumstances and some of our practices,
    including in respect of non-cash awards, have not been within
    the scope of any specific "safe harbor" provided in
    the compensation regulations. The complaint seeks treble the
    amount of unspecified damages sustained by the federal
    government in connection with our receipt of Title IV
    funding, a civil penalty for each violation of the False Claims
    Act, attorneys' fees, costs, and interest. We filed a
    motion to dismiss this case in November 2008, which was denied
    by the court in February 2009, and we have continued to
    vigorously contest this lawsuit.
Pursuant to the court's mandatory scheduling order, we have
    entered into settlement discussions with respect to the
qui
    tam
matter with the relator. In connection with such
    discussions, we are negotiating for a comprehensive settlement
    that would include, among other things, the resolution by the
    Office of Inspector General of its investigation. Accordingly,
    any such settlement would need to be approved not only by the
    relator, but by the U.S. Department of Justice (which has
    authority to approve settlements of False Claims Act matters),
    and the Department of Education. While we cannot assure you that
    this matter will be settled on terms acceptable to us or at all,
    we do not believe that any potential settlement, if in the
    amount (which we believe is generally in the range of other
    settlements of similar
qui tam
litigation against other
    for-profit education companies) and on the terms currently under
    discussion, will materially adversely affect our business,
    operations, or liquidity, although any charge taken in
    connection with such a potential settlement would likely be
    material to our operating results and cash flow for the periods
    affected by the charge. If such settlement does not occur, we
    would continue to vigorously defend this lawsuit.
The Office of Inspector General of the Department of Education
    is responsible for, among other things, promoting the
    effectiveness and integrity of the Department of
    Education's programs and operations, including
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compliance with applicable statutes and regulations. The Office
    of Inspector General performs investigations of alleged
    violations of law, including cases of alleged fraud and abuse,
    or other identified vulnerabilities, in programs administered or
    financed by the Department of Education, including matters
    related to the incentive compensation rule. On August 14,
    2008, the Office of Inspector General served an administrative
    subpoena on Grand Canyon University requiring us to provide
    certain records and information related to performance reviews
    and salary adjustments for all of our enrollment counselors and
    managers from January 1, 2004 to the present. The Office of
    Inspector General's investigation is focused on whether we
    have compensated any of our enrollment counselors or managers in
    a manner that violated the Title IV statutory requirements
    or the related Department of Education regulations concerning
    the payment of incentive compensation based on success in
    securing enrollments or financial aid. We have been cooperating
    with the Office of Inspector General to facilitate its
    investigation and have completed production of all requested
    documents. See "Risk Factors — The Office of
    Inspector General of the Department of Education has commenced
    an investigation of Grand Canyon University, which is ongoing
    and which may result in fines, penalties, other sanctions, and
    damage to our reputation in the industry."
Any fine or other sanction resulting from the Office of
    Inspector General investigation or otherwise, or any monetary
    liability resulting from the
qui tam
action, could damage
    our reputation and impose significant costs on us, which could
    have a material adverse effect on our business, prospects,
    financial condition, and results of operations. We cannot
    presently predict the ultimate outcome of the qui tam lawsuit or
    the Office of Inspector General investigation or any liability
    or other sanctions that might result.
In May 2009, the Department of Education announced that it was
    initiating a process to revise its regulations in certain areas,
    including the regulations implementing the incentive
    compensation rule. The process will involve convening one or
    more "negotiated rulemaking" teams composed of various
    representatives of the postsecondary education community
    nationally, as well as Department of Education employees, to
    consider how the current regulations should be revised. The
    Department of Education has stated that it intends for the
    committees to be appointed and to begin their work in the fall
    of 2009. Following a committee's review and drafting of
    possible revisions to the incentive compensation regulations,
    the Department of Education will develop and publish proposed
    revisions to the regulations, on which members of the public
    will be invited to provide comments. Following review of any
    public comments, the Department of Education will publish final
    new regulations. Under current law, any such revisions to the
    current incentive compensation regulations would not take effect
    any earlier than July 1, 2011.
Compliance reviews.
We are subject to
    announced and unannounced compliance reviews and audits by
    various external agencies, including the Department of
    Education, its Office of Inspector General, state licensing
    agencies, agencies that guarantee FFEL loans, the applicable
    state approving agencies for financial assistance to veterans,
    and accrediting commissions. As part of the Department of
    Education's ongoing monitoring of institutions'
    administration of the Title IV programs, the Higher
    Education Act also requires institutions to annually submit to
    the Department of Education a Title IV compliance audit
    conducted by an independent certified public accountant in
    accordance with applicable federal and Department of Education
    audit standards. In addition, to enable the Department of
    Education to make a determination of an institution's
    financial responsibility, each institution must annually submit
    audited financial statements prepared in accordance with
    Department of Education regulations.
Privacy of student records.
The Family
    Educational Rights and Privacy Act of 1974, or FERPA, and the
    Department of Education's FERPA regulations require
    educational institutions to protect the privacy of
    students' educational records by limiting an
    institution's disclosure of a student's personally
    identifiable information without the student's prior
    written consent. FERPA also requires institutions to allow
    students to review and request changes to their educational
    records maintained by the institution, to notify students at
    least annually of this inspection right, and to maintain records
    in each student's file listing requests for access to and
    disclosures of personally identifiable information and the
    interest of such party in that information. If an institution
    fails to comply with FERPA, the Department of Education may
    require corrective actions by the institution or may terminate
    an institution's receipt of further federal funds. In
    addition, educational institutions are obligated to safeguard
    student information pursuant to the Gramm-Leach-Bliley Act, or
    GLBA, a federal law designed to protect consumers' personal
    financial information held by financial institutions and
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other entities that provide financial services to consumers.
    GLBA and the applicable GLBA regulations require an institution
    to, among other things, develop and maintain a comprehensive,
    written information security program designed to protect against
    the unauthorized disclosure of personally identifiable financial
    information of students, parents, or other individuals with whom
    such institution has a customer relationship. If an institution
    fails to comply with the applicable GLBA requirements, it may be
    required to take corrective actions, be subject to monitoring
    and oversight by the FTC, and be subject to fines or penalties
    imposed by the FTC. For-profit educational institutions are also
    subject to the general deceptive practices jurisdiction of the
    FTC with respect to their collection, use, and disclosure of
    student information. The institution must also comply with the
    FTC Red Flags Rule, a section of the federal Fair Credit
    Reporting Act, that requires the establishment of guidelines and
    policies regarding identity theft related to student credit
    accounts.
Potential effect of regulatory violations.
If
    we fail to comply with the regulatory standards governing the
    Title IV programs, the Department of Education could impose
    one or more sanctions, including transferring us to the
    reimbursement or cash monitoring system of payment, requiring us
    to repay Title IV program funds, requiring us to post a
    letter of credit in favor of the Department of Education as a
    condition for continued Title IV certification, taking
    emergency action against us, initiating proceedings to impose a
    fine or to limit, suspend, or terminate our participation in the
    Title IV programs, or referring the matter for civil or
    criminal prosecution. Since we are provisionally certified to
    participate in the Title IV programs on a
month-to-month
basis, the Department of Education could allow our certification
    to expire at the end of any month without advance notice and
    without any formal procedure for review of such action. In
    addition, the agencies that guarantee FFEL loans for our
    students could initiate proceedings to limit, suspend, or
    terminate our eligibility to provide FFEL loans in the event of
    certain regulatory violations. If such sanctions or proceedings
    were imposed against us and resulted in a substantial
    curtailment or termination of our participation in the
    Title IV programs, our enrollments, revenues, and results
    of operations would be materially and adversely affected.
If we lost our eligibility to participate in the Title IV
    programs, or if the amount of available Title IV program
    funds was reduced, we would seek to arrange or provide
    alternative sources of revenue or financial aid for students. We
    believe that one or more private organizations would be willing
    to provide financial assistance to our students, but there is no
    assurance that this would be the case. The interest rate and
    other terms of such financial aid would likely not be as
    favorable as those for Title IV program funds, and we might
    be required to guarantee all or part of such alternative
    assistance or might incur other additional costs in connection
    with securing such alternative assistance. It is unlikely that
    we would be able to arrange alternative funding on any terms to
    replace all the Title IV funding our students receive.
    Accordingly, our loss of eligibility to participate in the
    Title IV programs, or a reduction in the amount of
    available Title IV program funding for our students, would
    have a material adverse effect on our results of operations,
    even if we could arrange or provide alternative sources of
    revenue or student financial aid.
In addition to the actions that may be brought against us as a
    result of our participation in the Title IV programs, we
    are also subject to complaints and lawsuits relating to
    regulatory compliance brought not only by our regulatory
    agencies, but also by other government agencies and third
    parties, such as present or former students or employees and
    other members of the public.
Uncertainties, increased oversight, and changes in student
    loan environment.
Since 2007, student loan
    programs, including the Title IV programs, have come under
    increased scrutiny by the Department of Education, Congress,
    state attorneys general, and other parties. Issues that have
    received extensive attention include allegations of conflicts of
    interest between some institutions and lenders that provide
    Title IV loans, questionable incentives given by lenders to
    some schools and school employees, allegations of deceptive
    practices in the marketing of student loans, and schools leading
    students to use certain lenders. Several institutions and
    lenders have been cited for these problems and have paid several
    million dollars in the aggregate to settle those claims. The
    practices of numerous other schools and lenders are being
    examined by government agencies at the federal and state level.
As a result of the increased scrutiny of student loan programs,
    Congress has passed new laws, the Department of Education has
    enacted stricter regulations, and several states have adopted
    codes of conduct or enacted state laws that further regulate the
    conduct of lenders, schools, and school personnel. These new
    laws
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and regulations, among other things, limit schools'
    relationships with lenders, restrict the types of services that
    schools may receive from lenders, prohibit lenders from
    providing other types of funding to schools in exchange for
    Title IV loan volume, require schools to provide additional
    information to students concerning institutionally preferred
    lenders, and significantly reduce the amount of federal payments
    to lenders who participate in the Title IV loan programs.
    In addition, recent adverse market conditions for consumer loans
    in general have adversely affected the student lending
    marketplace.
The cumulative impact of these developments and conditions has
    caused some lenders to cease providing Title IV loans to
    students, including some lenders that previously provided
    Title IV loans to our students. Other lenders have reduced
    the benefits and increased the fees associated with the
    Title IV loans they do provide. We and other schools have
    had to modify student loan practices in ways that result in
    higher administrative costs. If the costs of their Title IV
    loans increase, some students may decide not to take out loans
    and not enroll in a postsecondary institution. In May 2008, new
    federal legislation was enacted to attempt to ensure that all
    eligible students would be able to obtain Title IV loans in
    the future and that a sufficient number of lenders would
    continue to provide Title IV loans. Among other things,
    that legislation:
•
authorized the Department of Education to purchase Title IV
    loans from lenders, thereby providing capital to the lenders to
    enable them to continue making Title IV loans to
    students; and
•
permitted the Department of Education to designate institutions
    eligible to participate in a "lender of last resort"
    program, under which federally recognized student loan guaranty
    agencies would be required to make Title IV loans to all
    otherwise eligible students at those institutions.
While this legislation appears to have provided some stability
    to the marketplace for Title IV loans, it is not yet clear
    if it ultimately will be effective in ensuring students'
    access to Title IV loans. The environment surrounding
    access to and cost of student loans remains in a state of flux.
    The Department of Education proposed new regulations regarding
    student loans in July 2009, which could go into effect on
    July 1, 2010, and Congress is considering legislation to
    eliminate the FFEL loan program and move all federal student
    lending into the FDL program. The uncertainty surrounding these
    issues, and any resolution of these issues that increases loan
    costs or reduces students' access to Title IV loans,
    may adversely affect our student enrollments. Although we are
    approved to participate in the FDL program, because a
    significant percentage of our revenue is derived from the
    Title IV programs, any action by Congress that
    significantly reduces Title IV program funding or our
    ability or the ability of our students to participate in the
    Title IV programs could increase our costs of compliance,
    reduce the ability of some students to finance their education
    at our institution, require us to seek to arrange for other
    sources of financial aid for our students and materially
    decrease our student enrollment, each of which could have a
    material adverse effect on us. In addition, a transition to the
    FDL program could cause disruptions in the administration of
    Title IV program loans to our students if we or the
    Department of Education encounter difficulties with the systems
    or processes necessary for increased FDL program loans.
Regulatory
    Standards that May Restrict Institutional Expansion or Other
    Changes
Many actions that we may wish to take in connection with
    expanding our operations or other changes are subject to review
    or approval by the applicable regulatory agencies.
Adding teaching locations, implementing new educational
    programs, and increasing enrollment.
The
    requirements and standards of state education agencies,
    accrediting commissions, and the Department of Education limit
    our ability in certain instances to establish additional
    teaching locations, implement new educational programs, or
    increase enrollment in certain programs. Many states require
    review and approval before institutions can add new locations or
    programs, and Arizona also limits the number of undergraduate
    nursing students we may enroll (which represents a small portion
    of our overall nursing program). The Arizona State Board for
    Private Postsecondary Education, the Higher Learning Commission,
    and other state education agencies and specialized accrediting
    commissions that authorize or accredit us and our programs
    generally require institutions to notify them in advance of
    adding new locations or implementing new programs, and upon
    notification may undertake a review of the quality of the
    facility or the program and the financial, academic, and other
    qualifications of the institution. For instance, following
    applications we filed in
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December 2006, we received approval from the Higher Learning
    Commission and the Arizona State Board for Private Postsecondary
    Education in March 2008 to add our first doctoral level program.
With respect to the Department of Education, if an institution
    participating in the Title IV programs plans to add a new
    location or educational program, the institution must generally
    apply to the Department of Education to have the additional
    location or educational program designated as within the scope
    of the institution's Title IV eligibility. However, a
    degree-granting institution such as us is not required to obtain
    the Department of Education's approval of additional
    programs that lead to an associate, bachelor's,
    professional, or graduate degree at the same degree level as
    programs previously approved by the Department of Education.
    Similarly, an institution is not required to obtain advance
    approval for new programs that prepare students for gainful
    employment in the same or a related recognized occupation as an
    educational program that has previously been designated by the
    Department of Education as an eligible program at that
    institution if it meets certain minimum-length requirements.
    However, as a condition for an institution to participate in the
    Title IV programs on a provisional basis, the Department of
    Education can require prior approval of such programs or
    otherwise restrict the number of programs an institution may add
    or the extent to which an institution can modify existing
    educational programs. If an institution that is required to
    obtain the Department of Education's advance approval for
    the addition of a new program or new location fails to do so,
    the institution may be liable for repayment of the Title IV
    program funds received by the institution or students in
    connection with that program or enrolled at that location.
Acquiring other schools.
While we have not
    acquired any other schools in the past, we may seek to do so in
    the future. The Department of Education and virtually all state
    education agencies and accrediting commissions require a company
    to seek their approval if it wishes to acquire another school.
    In our case, we would need to obtain the approval of the Arizona
    State Board for Private Postsecondary Education or other state
    education agency that licenses the school being acquired, the
    Higher Learning Commission, any other accrediting commission
    that accredits the school being acquired, and the Department of
    Education. The level of review varies by individual state and
    accrediting commission, with some requiring approval of such an
    acquisition before it occurs while others only consider approval
    after the acquisition has occurred. The Higher Learning
    Commission would require us to obtain its advance approval of
    such an acquisition. The approval of the applicable state
    education agencies and accrediting commissions is a necessary
    prerequisite to the Department of Education certifying the
    acquired school to participate in the Title IV programs
    under our ownership. The restrictions imposed by any of the
    applicable regulatory agencies could delay or prevent our
    acquisition of other schools in some circumstances.
Provisional certification.
Each institution
    must apply to the Department of Education for continued
    certification to participate in the Title IV programs at
    least every six years, or when it undergoes a change in control,
    and an institution may come under the Department of
    Education's review when it expands its activities in
    certain ways, such as opening an additional location, adding an
    educational program, or modifying the academic credentials that
    it offers.
The Department of Education may place an institution on
    provisional certification status if it finds that the
    institution does not fully satisfy all of the eligibility and
    certification standards. In addition, if a company acquires a
    school from another entity, the acquired school will
    automatically be placed on provisional certification when the
    Department of Education approves the transaction. During the
    period of provisional certification, the institution must comply
    with any additional conditions or restrictions included in its
    program participation agreement with the Department of
    Education. If the Department of Education finds that a
    provisionally certified institution is unable to meet its
    responsibilities under its program participation agreement, it
    may seek to revoke the institution's certification to
    participate in the Title IV programs without advance notice
    or advance opportunity for the institution to challenge that
    action. In addition, the Department of Education may more
    closely review an institution that is provisionally certified if
    it applies for recertification or approval to open a new
    location, add an educational program, acquire another school, or
    make any other significant change. Students attending
    provisionally certified institutions remain eligible to receive
    Title IV program funds.
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We are currently provisionally certified to participate in the
    Title IV programs on a
month-to-month
basis. The Department of Education issued our current program
    participation agreement in May 2005, after an extended review
    following the change in control that occurred in February 2004.
    The Department of Education's 2005 recertification imposed
    certain conditions on us, including a requirement that we post a
    letter of credit, accept restrictions on the growth of our
    program offerings and enrollment, and receive Title IV
    funds under the heightened cash monitoring system of payment
    rather than by advance payment. In October 2006, the Department
    of Education eliminated the letter of credit requirement and
    allowed the growth restrictions to expire, and in August 2007,
    it eliminated the heightened cash monitoring restrictions and
    returned us to the advance payment method. We submitted our
    application for recertification in March 2008 in anticipation of
    the expiration of our provisional certification on June 30,
    2008. The Department of Education did not make a decision on our
    recertification application by June 30, 2008 and therefore
    our provisional certification to participate in the
    Title IV programs has been automatically extended on a
month-to-month
basis until the Department of Education makes its decision.
    Since June 2008, we have filed updates with the Department of
    Education and communicated with Department of Education
    personnel in order to update our pending recertification
    application with relevant information, such as our status as a
    publicly-traded corporation after the initial public offering
    and the identity of the members of our board of directors. There
    can be no assurance that the Department of Education will
    recertify us while the investigation by the Office of Inspector
    General of the Department of Education is being conducted, while
    the qui tam lawsuit is pending, or at all, or that it will not
    impose restrictions as a condition of approving our pending
    recertification application or with respect to any future
    recertification.
Change in ownership resulting in a change in
    control.
The Department of Education and the
    Higher Learning Commission, as well as many accrediting
    commissions and states require institutions of higher education
    to report or obtain approval of certain changes in control and
    changes in other aspects of institutional organization or
    control. The types of and thresholds for such reporting and
    approval vary among the various regulatory bodies.
Under Department of Education regulations, an institution that
    undergoes a change in control as defined by the Department of
    Education loses its eligibility to participate in the
    Title IV programs and must apply to the Department of
    Education in order to reestablish such eligibility. In
    connection with our initial public offering in November 2008, we
    submitted a description of the offering to the Department of
    Education, including a description of the voting agreement that
    forms the basis for the Richardson Voting Group. Based on this
    description, the Department of Education concluded that our
    initial public offering did not result in a change in control
    under the Department of Education's regulations that were
    applicable to us before we became a publicly-traded corporation.
    With respect to publicly-traded corporations, like us,
    Department of Education regulations provide that a change in
    control occurs if either: (i) there is an event that would
    obligate the corporation to file a Current Report on
Form 8-K
with the SEC disclosing a change in control, or (ii) the
    corporation has a stockholder that owns, or has voting control
    over, at least 25% of the total outstanding voting stock of the
    corporation and is the largest stockholder of the corporation
    (defined in the regulations as a "controlling
    shareholder"), and that controlling shareholder ceases to
    own, or have voting control over, at least 25% of such stock or
    ceases to be the largest stockholder. Based on the number of
    shares of common stock expected to be sold by us and the selling
    stockholders in this offering, we believe that the Richardson
    Voting Group will continue to hold voting power with respect to
    25% or more of our total outstanding voting stock after the
    completion of the offering and that this offering will not
    constitute a change in control under the Department of
    Education's regulations. See "Beneficial Ownership of
    Common Stock." We have notified the Department of Education
    of this offering and we plan to initiate further communications
    with the Department of Education to seek its confirmation that
    the offering will not constitute a change in control under its
    standards.
The Higher Learning Commission provides that an institution must
    obtain its approval in advance of a change in ownership,
    corporate control or structure in order for the institution to
    retain its accredited status. In June 2009, the Higher Learning
    Commission adopted new policies and standards for the review of
    transactions that may constitute such a change in control. One
    standard provides that a transaction may be considered a change
    in control if an individual, entity or group increases or
    decreases its control of shares to greater than or
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less than 25% of the total outstanding shares of the stock of a
    parent corporation that owns or controls the accredited
    institution. In addition, in the event of a change in control,
    the Higher Learning Commission requires the institution to
    obtain its approval in advance of the change, and in certain
    circumstances that process may require several weeks or several
    months or more to complete. In addition, following a change in
    control, the Higher Learning Commission will conduct an onsite
    evaluation within six months in order to continue the
    institution's accreditation. The Higher Learning Commission
    did consider our initial public offering in November 2008 to be
    a change in control under its policies and, while it approved
    our consummation of the offering, it informed us that it would
    conduct a site visit to confirm the appropriateness of the
    approval and to evaluate whether we continue to meet the Higher
    Learning Commission's eligibility criteria. The Higher
    Learning Commission, after conducting its site visit in March
    2009, determined, among other things, that the initial public
    offering was conducted in a manner that did not disrupt our
    ongoing operations and that no further action would be required
    as a result of the change in control, and formally approved the
    change in control in June 2009. Based on the number of shares of
    common stock expected to be sold by us and the selling
    stockholders in this offering, we believe that the Richardson
    Voting Group will continue to hold voting power with respect to
    25% or more of our total outstanding voting stock after the
    completion of the offering and that this offering will not
    constitute a change in control under the Higher Learning
    Commission's policies. See "Beneficial Ownership of
    Common Stock." We have submitted a description of this
    offering to the Higher Learning Commission and requested its
    confirmation that the offering will not constitute a change in
    control under its policies and standards, and the Higher
    Learning Commission has informed us that it is reviewing our
    inquiry.
Even if this offering will not constitute a change of control
    under the Department of Education's regulations or the
    Higher Learning Commission's policies, under the terms of
    the voting agreement with the Richardson Voting Group, if any
    person party to the voting agreement transfers shares covered by
    the proxy in registered or open-market sales, the proxy is no
    longer effective as to such shares. Accordingly, the number of
    shares over which the Richardson Voting Group will continue to
    hold voting power will decrease over time as shares held by
    other parties to the voting agreement are sold, and we may not
    be aware of these sales since many of the shares subject to the
    voting agreement are held in "street name." If at any
    time in the future, as a result of such future registered or
    open-market sales, the number of shares over which the
    Richardson Voting Group holds voting power falls below 25%, a
    change in control will occur. At that point, with respect to the
    Department of Education, if we file a timely and materially
    complete application, the Department of Education may
    temporarily certify us on a provisional basis following the
    change in control, so that our students would retain access to
    Title IV program funds until the Department of Education
    completes its full review. In addition, the Department of
    Education will extend our temporary provisional certification if
    we timely file other required materials, including any approval
    of the change of control by the Higher Learning Commission and
    the Arizona State Board for Private Postsecondary Education, as
    required, and certain required financial information (consisting
    of our recent SEC filings) showing our financial condition. As a
    general matter, an institution is required to file the
    materially complete application within ten business days after
    the change in control, as measured from the date of the event
    that constitutes the change in control. The deadline for an
    institution to timely file the other materials, including the
    financial documentation, that are required following a change in
    control is the last day of the month following the month in
    which the change of control occurs. For an institution that is
    owned by a publicly traded corporation, like us, a related
    Department of Education regulation provides that the deadline to
    notify the Department of Education of a significant change in
    the distribution of the ownership of the institution is ten
    days, as measured from the date on which management of the
    corporation learns of such significant change or, alternatively,
    the date that the institution notifies its accrediting agency of
    such change. If the Department of Education were to determine
    that we failed to meet any of these application and other
    deadlines, our certification would expire and our students would
    not be eligible to receive Title IV program funds until the
    Department of Education completes its full review, which
    commonly takes several months and may take longer. If the
    Department of Education approves the application after a change
    in control, it would normally certify us on a provisional basis
    for a period of up to approximately three years. The precise
    conditions and duration of our provisional certification in this
    circumstance and what restrictions, if any, may be imposed, are
    difficult to predict because we have been certified on a
month-to-month
basis for an extended period and are subject to the ongoing
    investigation
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by the Office of Inspector General of the Department of
    Education and the
qui tam
lawsuit, which may affect the
    Department of Education's decision regarding the terms to
    attach when it next renews our certification.
With respect to the Higher Learning Commission, if we anticipate
    that the number of shares over which the Richardson Voting Group
    holds voting power will fall below 25% at any time in the
    future, we would be required to obtain the approval of the
    Higher Learning Commission before such event occurs. However,
    because we may be unaware when such event occurs, we would plan
    to seek the cooperation of the Higher Learning Commission to
    allow us to arrange an appropriate review procedure at that time
    since there may not be an opportunity to obtain the Higher
    Learning Commission's advance review and approval, as is
    typically required by its policies. Another policy of the Higher
    Learning Commission provides that an institution is obligated to
    provide notice of certain transactions, such as the transfer of
    stock by an investor, promptly after the institution becomes
    reasonably knowledgeable of such transaction. This policy
    suggests that, in certain circumstances, the Higher Learning
    Commission can adapt its procedures to allow an institution,
    like us, to provide notice and seek the necessary approval after
    the institution gains knowledge of an investor transaction such
    as the sale of shares by other parties to the voting agreement,
    but there can be no assurance that would be the case with
    respect to this offering or any such sales of stock that may
    occur following the completion of this offering. In such a
    circumstance, we cannot predict whether the Higher Learning
    Commission would impose any limitations or conditions on us, or
    identify any compliance issues related to us in the context of
    the change in control process, that could result in our loss of
    accreditation by the Higher Learning Commission. Any such loss
    would result in our loss of eligibility to participate in the
    Title IV programs and cause a significant decline in our
    student enrollments.
Many states include the sale of a controlling interest of common
    stock in the definition of a change in control requiring
    approval, but their thresholds for determining a change in
    control vary widely. The standards of the Arizona State Board
    for Private Postsecondary Education provide that an institution
    that is owned by a publicly-traded company whose control is
    vested in the voting members of the board of directors, such as
    Grand Canyon Education, undergoes a change in control if 50% or
    more of the voting members of the board of directors change
    within a
12-month
period or the chief executive officer of the corporation
    changes. A change in control under the definition of one of the
    other state agencies that regulate us might require us to obtain
    approval of the change in control in order to maintain our
    authorization to operate in that state, and in some cases such
    states could require us to obtain advance approval of the change
    in control.
We notified the Arizona State Board for Private Postsecondary
    Education of our initial public offering and, based on our
    communications with that agency before and after the
    consummation of the initial public offering , we do not believe
    that our initial public offering constituted a change in control
    under Arizona law that was applicable to us before we were a
    publicly traded corporation. We believe that this offering will
    not constitute a change in control under the standards of the
    Arizona State Board for Private Postsecondary Education that are
    applicable to publicly-traded companies because it will not
    result in a change to 50% or more of the voting members of the
    board of directors in a
12-month
period or since the date that we became a publicly-traded
    corporation, and because it will not result in a change to the
    chief executive officer of the corporation. If we were to
    undergo a change in control under the standards of the Arizona
    State Board of Private Postsecondary Education at any time in
    the future, we would be required to file an application with the
    Arizona State Board for Private Postsecondary Education in order
    to obtain approval for such change in control. We cannot predict
    whether the Arizona State Board for Private Postsecondary
    Education would impose any limitations or conditions on us, or
    identify any compliance issues related to us in the context of
    the change in control process, that could result in our loss of
    authorization in Arizona. Any such loss would result in our loss
    of eligibility to participate in the Title IV programs and
    cause a significant decline in our student enrollments.
We also notified other accrediting commissions and state
    agencies, as we believed necessary, of our initial public
    offering and the reasons why we believed that offering did not
    constitute a change in control under their respective standards,
    or to determine what was required if any such commission or
    agency did consider the offering to constitute a change in
    control. None of the other accrediting commissions and state
    agencies that we notified of our initial public offering advised
    us that it concluded that the offering constituted a change in
    control under its policies or that it required us to take any
    further action. We plan to provide each of these
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other accrediting commissions and state agencies with a notice
    and description of this offering before the consummation of the
    offering. We do not believe that any of them will require us to
    obtain their approval in connection with this offering, but we
    cannot be certain of that. If this offering were considered a
    change of control under the standards of any of these
    commissions or agencies, and we failed to obtain the approval of
    that commission or agency, we could lose accreditation, state
    licensure, or be subject to other limitations or penalties.
Additional state regulation.
Most state
    education agencies impose regulatory requirements on educational
    institutions operating within their boundaries. Some states have
    sought to assert jurisdiction over
out-of-state
educational institutions offering online degree programs that
    have no physical location in the state but that have some
    activity in the state, such as enrolling or offering educational
    services to students who reside in the state, employing faculty
    who reside in the state, or advertising to or recruiting
    prospective students in the state. State regulatory requirements
    for online education vary among the states, are not well
    developed in many states, are imprecise or unclear in some
    states, and can change frequently. In addition to Arizona, we
    have determined that our activities in certain states constitute
    a presence requiring licensure or authorization under the
    requirements of the state education agency in those states, and
    in other states we have obtained approvals as we have determined
    necessary in connection with our marketing and recruiting
    activities. We review the licensure requirements of other states
    when appropriate to determine whether our activities in those
    states require licensure or authorization by the respective
    state education agencies. Because state regulatory requirements,
    including agency interpretations, can change frequently, and
    because we enroll students from all 50 states and the
    District of Columbia, we expect we will have to seek licensure
    or authorization in additional states in the future. If we fail
    to comply with state licensing or authorization requirements for
    any state, we may be subject to the loss of state licensure or
    authorization by that state, or be subject to other sanctions,
    including restrictions on our activities in that state, fines,
    and penalties. While we do not believe that any of the states in
    which we are currently licensed or authorized, other than
    Arizona, are individually material to our operations, the loss
    of licensure or authorization in a state other than Arizona
    could prohibit us from recruiting prospective students or
    offering services to current students in that state, which could
    significantly reduce our enrollments.
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CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS
Policies
    and Procedures for Related Person Transactions
We have a written related party transactions policy, pursuant to
    which our executive officers, directors and principal
    stockholders, including their immediate family members, are not
    permitted to enter into a related person transaction with us
    without the prior consent of our audit committee. Any request
    for us to enter into a transaction with an executive officer,
    director, principal stockholder or any of such persons'
    immediate family members or affiliates, in which the amount
    involved exceeds $120,000 must be presented to our audit
    committee for review, consideration and approval. All of our
    directors, executive officers and employees are required to
    report to our audit committee any such related person
    transaction. In approving or rejecting the proposed agreement,
    our audit committee will take into account, among other factors
    it deems appropriate, whether the transaction is on terms no
    less favorable than terms generally available to an unaffiliated
    third-party under the same or similar circumstances and the
    extent of the related party's interest in the transaction.
    Under the policy, if we should discover related person
    transactions that have not been pre-approved, the audit
    committee will be notified and will determine the appropriate
    action, including ratification, rescission or amendment of the
    transaction.
Under the policy, certain types of transactions have been
    pre-approved by the audit committee, including employment
    arrangements with executive officers, director compensation,
    transactions where all stockholders receive proportional
    benefits, transactions involving competitive bids, regulated
    transactions, and banking-related service transactions.
Set forth below is a summary of certain transactions since
    January 1, 2006, in which the Company was or is to be a
    participant and involving our directors, our executive officers,
    beneficial owners of more than 5% of our common stock, and some
    of the entities with which the foregoing persons are affiliated
    or associated, and in which the amount involved exceeds or will
    exceed $120,000.
Investor
    Rights Agreement and Financing Transactions
In connection with our conversion from a limited liability
    company to a corporation and the related investment in us by
    Endeavour Capital and its affiliates (the "Endeavour
    Entities"), and certain other investors on August 24,
    2005, we entered into an investor rights agreement. The investor
    rights agreement, as currently in effect, contains agreements
    among the parties with respect to registration rights. See
    "Description of Capital Stock — Registration
    Rights." On December 18, 2007, we sold an aggregate of
    3,829 shares of Series C preferred stock at a purchase
    price of $3,500.00 per share, or approximately
    $13.4 million in total gross proceeds, of which
    1,675 shares were sold to the Endeavour Entities, and
    834 shares were sold to an investment entity controlled by
    Brent D. Richardson, our Executive Chairman, and Christopher C.
    Richardson, our General Counsel and a director (which shares
    were paid for, in part, by the exchange of 865 outstanding
    shares of Series B preferred stock purchased in 2006). All
    outstanding shares of the Series C preferred stock were
    automatically converted into common stock in connection with our
    initial public offering.
Voting
    Agreement
The Department of Education, the Higher Learning Commission, and
    other accrediting commissions and states require institutions of
    higher education to report or obtain approval of certain changes
    in control and changes in other aspects of institutional
    organization or control. In connection with our initial public
    offering, certain of our stockholders entered into a proxy and
    voting agreement, pursuant to which such persons granted to
    Brent D. Richardson, our Executive Chairman, and Christopher C.
    Richardson, our General Counsel and a director, on behalf of the
    Richardson Voting Group, a five-year irrevocable proxy to
    exercise voting authority with respect to certain shares of our
    common stock held by such persons, for so long as such shares
    are held by such persons. Upon the completion of our initial
    public offering, as a result of the proxy and voting agreement,
    the Richardson Voting Group had the power to exercise voting
    authority with respect to 19,516,242 shares of our common
    stock, or 42.9% of our common stock at such time.
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Under the terms of the voting agreement, if any person party to
    the voting agreement transfers shares covered by the proxy in
    open-market or other transactions, the proxy is no longer
    effective as to such shares. Accordingly, the number of shares
    over which the Richardson Voting Group will continue to hold
    voting power will decrease over time as shares held by other
    parties to the voting agreement are sold, which sales we may be
    not be aware of since many of the shares held by such other
    parties are held in "street name." Based on
    information available to us, we believe that, as of
    July 31, 2009, the Richardson Voting Group had the power to
    exercise voting authority with respect to approximately
    17.0 million shares of our common stock, or approximately
    38% of our common stock. After giving effect to this offering,
    and based on the number of shares expected to be sold by us and
    the selling stockholders participating in this offering, we
    believe that the Richardson Voting Group will continue to have
    the power to exercise voting authority with respect to more than
    25% of our common stock. See "Regulation" and
    "Beneficial Ownership of Common Stock."
Special
    Distribution
We declared a special distribution that was paid promptly after
    the completion of our initial public offering in November 2008
    to our stockholders who owned shares of record immediately prior
    to the consummation of our initial public offering. The
    aggregate amount of the special distribution was equal to 75% of
    the gross proceeds from the sale of common stock in our initial
    public offering, including 75% of the gross proceeds received by
    us from the underwriters' exercise of their over-allotment
    option. The aggregate amount of the special distribution was
    $108.7 million, or approximately $3.27 per common share on
    an as if converted basis.
The following table sets forth the amount of cash paid as a
    result of the special distribution in respect of outstanding
    shares of our capital stock as to which each of our executive
    officers and directors, as well as persons who were holders of
    5% or more of our common stock at the time, was deemed to have
    sole or shared voting or investment power as of the date of the
    special distribution.
Shares Beneficially
Special
Owned and
Date of Acquisition
Original Acquisition
Distribution
Outstanding as of
of Shares
Cost of Shares to Which
Amount for Shares
November 18,
Beneficially
Special Distribution
Beneficially
Name of Beneficial Owner
2008
(1)
Owned
Related
(2)
Owned
(Dollars in thousands)
5% Stockholders
Endeavour Capital Fund IV and
    affiliates
(3)
9,035,048
August 24, 2005
$
16,000
$
29,547
977,090
December 18, 2007
5,863
3,195
Total
10,012,138
21,863
32,742
220 GCU, L.P. and
    affiliates
(4)
4,756,328
February 2, 2004
3,042
15,554
1,835,130
August 24, 2005
3,250
6,001
545,218
December 18, 2007
3,271
1,783
Total
7,136,676
9,563
23,338
Staci L.
    Buse
(5)
3,347,452
February 2, 2004
1,443
10,947
155,719
December 18, 2007
934
509
Total
3,503,171
2,377
11,456
Significant Ventures, LLC
2,767,321
February 2, 2004
36
9,050
203,823
December 18, 2007
1,223
667
Total
2,971,144
1,259
9,717
Directors
Chad N.
    Heath
(3)
9,035,048
August 24, 2005
16,000
29,547
977,090
December 18, 2007
5,863
3,195
Total
10,012,138
21,863
32,742
D. Mark
    Dorman
(3)
9,035,048
August 24, 2005
16,000
29,547
977,090
December 18, 2007
5,863
3,195
Total
10,012,138
21,863
32,742
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Shares Beneficially
Special
Owned and
Date of Acquisition
Original Acquisition
Distribution
Outstanding as of
of Shares
Cost of Shares to Which
Amount for Shares
November 18,
Beneficially
Special Distribution
Beneficially
Name of Beneficial Owner
2008
(1)
Owned
Related
(2)
Owned
(Dollars in thousands)
Executive Officers
Brent D.
    Richardson
(5)
3,347,452
February 2, 2004
1,443
10,947
155,719
December 18, 2007
934
509
Total
3,503,171
2,377
11,456
John E.
    Crowley
(6)
382,435
February 2, 2004
164
1,251
19,465
December 18, 2007
117
64
Total
401,900
281
1,315
Christopher C.
    Richardson
(5)
3,348,317
February 2, 2004
1,443
10,950
155,719
December 18, 2007
934
509
Total
3,504,036
2,377
11,459
All directors and executive officers as a group
7,078,204
February 2, 2004
3,050
23,148
9,035,048
August 24, 2005
16,000
29,547
1,307,993
December 18, 2007
7,848
4,277
17,421,245
$
26,898
$
56,972
(1)
For the purpose of calculating shares beneficially owned and
    outstanding as of November 18, 2008, which was the date
    immediately prior to our initial public offering and the record
    date for purposes of determining the stockholders entitled to
    receive the special distribution, the number of shares of common
    stock deemed outstanding included all shares of common stock
    issuable upon the conversion of all outstanding shares of our
    Series A and Series C preferred stock. Beneficial ownership
    is determined in accordance with the rules of the SEC that
    generally attribute beneficial ownership of securities to
    persons that possess sole or shared voting power and/or
    investment power with respect to those securities. The persons
    identified in this table have sole voting and investment power
    with respect to all shares shown as beneficially owned by them,
    except as set forth in the footnotes to the table included in
    "Beneficial Ownership of Common Stock."
(2)
On August 24, 2005, we converted from a limited liability
    company to a taxable corporation. The reported acquisition cost
    of shares of common stock represents the value of the capital
    contributions originally made to acquire the limited liability
    company interests that were converted into common stock upon
    such conversion plus capital contributions for which no
    additional interests were issued, less capital distributions.
(3)
Represents shares held of record by the Endeavour Entities.
    Messrs. Chad N. Heath and D. Mark Dorman, each of whom is a
    managing director of Endeavour Capital IV, LLC, the general
    partner of each of the Endeavour Entities, are members of our
    Board of Directors.
(4)
Represents shares previously held of record by 220 GCU, L.P.,
    220 Education, L.P., 220-SigEd, L.P., and SV One, L.P., which,
    prior to our initial public offering, were collectively the
    beneficial owners of more than 5% of our common stock.
(5)
Represents shares previously held of record by Rich Crow
    Enterprises, LLC, and Masters Online, LLC, of which Brent D.
    Richardson, Christopher C. Richardson, and Staci L. Buse were
    members and, in each case, which were attributable to, and
    beneficially owned by, Brent D. Richardson, Christopher C.
    Richardson, or Staci L. Buse, as applicable.
(6)
Represents shares previously held of record by Rich Crow
    Enterprises, LLC, of which John E. Crowley, our former chief
    operating officer, was a member, which were attributable to, and
    beneficially owned by, John E. Crowley. Mr. Crowley
    resigned his position as chief operating officer on
    February 17, 2009.
For additional information regarding share ownership, see
    "Beneficial Ownership of Common Stock."
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Arrangement
    with Mind Streams
We are a party to an agreement with Mind Streams, LLC, which is
    owned and operated, in part, by Gail Richardson, father to Brent
    D. Richardson, our Executive Chairman, and Christopher C.
    Richardson, our General Counsel and director. Pursuant to this
    agreement, Mind Streams identifies qualified applicants for
    admission to Grand Canyon University in return for which it is a
    paid a stated percentage of the net revenue (calculated as
    tuition actually received, less scholarships, refunds, and
    allowances) derived by us from those identified applicants that
    matriculate at Grand Canyon University. The term of the
    agreement runs through December 31, 2010, and can be
    terminated by either party upon 45 days' prior written
    notice. For the years ended December 31, 2006, 2007, and
    2008, and for the six months ended June 30, 2009, we
    expensed $3.7 million, $4.3 million,
    $5.9 million, and $1.8 million, respectively, to Mind
    Streams pursuant to this arrangement for students enrolled and
    expenses reimbursed.
Arrangement
    with Vergo Marketing
From time to time we obtain marketing services from Vergo
    Marketing, Inc., of which the
sister-in-law
of Brent D. Richardson, our Executive Chairman, is a significant
    stockholder and chief executive officer. For the years ended
    December 31, 2007 and 2008, and for the six months ended
    June 30, 2009, we paid Vergo Marketing, Inc.
    $0.5 million, $0.4 million, and $0.2 million,
    respectively, for such services.
Endeavour
    Professional Services Agreement
In connection with the investment by the Endeavour Entities,
    among others, on August 24, 2005, we entered into a
    professional services agreement with Endeavour Capital IV, LLC.
    Under the agreement, we engaged Endeavour Capital IV, LLC as a
    consultant to our Board of Directors on business and financial
    matters, including, without limitation, corporate strategy,
    budgeting, acquisition and divestiture strategies, and debt and
    equity financings. Under the agreement, we paid Endeavour
    Capital IV, LLC a one time fee of $340,667 upon execution of the
    agreement and agreed to pay Endeavour Capital IV, LLC a
    consulting fee of $250,000 per year thereafter, subject to
    annual increases as determined by the Board of Directors (not
    including those directors appointed by Endeavour) based on
    performance. In addition, we agreed to reimburse Endeavour
    Capital IV, LLC for reasonable legal, due diligence, travel and
    other
out-of-pocket
expenses, and to indemnify Endeavour Capital IV, LLC and its
    affiliates for any action or inaction related to the agreement,
    except as a result of their gross negligence or intentional
    misconduct. For the years ended December 31, 2006, 2007,
    and 2008, we paid fees to Endeavour Capital IV, LLC in the
    amount of $0.3 million, $0.3 million, and
    $0.4 million, respectively, which amounts, in each year,
    constituted less than 5% of Endeavour Capital IV, LLC's
    consolidated gross revenues for such year. The professional
    services agreement terminated by its terms upon the closing of
    our initial public offering.
Center
    for Educational Excellence
The Center for Educational Excellence, LLC was created to
    explore opportunities to promote and enhance the academic
    experience we offer. John Crowley, our former Chief Operating
    Officer, is a member of The Center for Educational Excellence,
    LLC. For the year ended December 31, 2007, we paid
    approximately $0.6 million of expenses incurred by The
    Center for Educational Excellence, LLC, of which
    $0.3 million was reimbursed to us, and $0.3 million
    was owed to us and included in due from related parties as of
    December 31, 2007. No amounts were paid by us to The Center
    for Educational Excellence, LLC in 2008 or in the six months
    ended June 30, 2009. The Center for Educational Excellence,
    LLC was dissolved on April 29, 2009.
Consulting
    Agreements
On January 8, 2004, we entered into consulting agreements
    with Significant Ventures, Inc., predecessor to Significant
    Ventures, LLC, which is one of our significant stockholders, and
    with 220 Partners, LLC, which is affiliated with Charles M.
    Preston III, one of our former directors. For the year ended
    December 31, 2006, we paid $0.4 million and
    $0.3 million to Significant Ventures and 220 Partners,
    respectively, for services rendered and expenses reimbursed
    pursuant to these agreements. These consulting agreements
    terminated by their terms on December 31, 2006.
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BENEFICIAL
    OWNERSHIP OF COMMON STOCK
The following table sets forth information regarding the
    beneficial ownership of our common stock as of June 30,
    2009 for:
•
each person, or group of affiliated persons, known to us to own
    beneficially 5% or more of our outstanding common stock;
•
each of our directors;
•
each of our named executive officers; and
•
all of our directors and named executive officers as a group.
The information in the following table and related footnotes has
    been presented in accordance with the rules of the SEC. Under
    SEC rules, beneficial ownership of a class of capital stock
    includes any shares of such class as to which a person, directly
    or indirectly, has or shares voting power or investment power
    and also any shares as to which a person has the right to
    acquire such voting or investment power within 60 days
    through the exercise of any stock option, warrant or other
    right. If two or more persons share voting power or investment
    power with respect to specific securities, each such person is
    deemed to be the beneficial owner of such securities. Except as
    we otherwise indicate below and under applicable community
    property laws, we believe that the beneficial owners of the
    common stock listed below, based on information they have
    furnished to us, have sole voting and investment power with
    respect to the shares shown. Unless otherwise noted below, the
    address for each holder listed below is
    3300 W. Camelback Road, Phoenix, Arizona 85017.
The calculations of beneficial ownership in this table are based
    on 44,576,417 shares outstanding at June 30, 2009 and
    assumes the termination of the voting agreement described above
    under "Certain Relationships and Related
    Transactions — Voting Agreement" in connection
    with this offering.
Common Stock
Amount and Nature of
Beneficial Ownership
Percent of
    Class
(1)
Principal Stockholders:
Endeavour Capital Fund IV, L.P. and
    affiliates
(2)
10,012,138
22.5
%
Luke M. Buse and Staci Lin Buse Revocable
    Trust
(3)(8)
3,503,171
7.9
%
Directors and Named Executive Officers:
Brent D.
    Richardson
(4)(8)
3,503,171
7.9
%
Brian E. Mueller
109,329
*
Christopher C.
    Richardson
(5)(8)
3,504,036
7.9
%
Daniel E. Bachus
10,000
*
Dr. W. Stan Meyer
2,500
*
Michael S.
    Lacrosse
(6)
30,603
*
Dr. Kathy
    Player
(6)
30,463
*
Chad N.
    Heath
(7)
10,012,138
22.5
%
D. Mark
    Dorman
(7)
10,012,138
22.5
%
David J. Johnson
11,298
*
Jack A. Henry
6,748
*
All directors and executive officers as a group
    (11 persons)
17,220,286
38.6
%
*
Represents beneficial ownership of less than 1%
(1)
The percentage of beneficial ownership as to any person as of a
    particular date is calculated by dividing the number of shares
    beneficially owned by such person, which includes the number of
    shares as to which such person has the right to acquire voting
    or investment power within 60 days after such date, by the
    sum of the number of shares outstanding as of such date plus the
    number of shares as to which such person has
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the right to acquire voting or investment power within
    60 days after such date. Consequently, the denominator for
    calculating beneficial ownership percentages may be different
    for each beneficial owner.
(2)
Endeavour Capital IV, LLC is the general partner of the
    Endeavour Entities, and has voting and dispositive power with
    respect to the shares held by the Endeavour Entities.
    Messrs. Chad N. Heath and D. Mark Dorman, each of whom is a
    managing director of Endeavour Capital IV, LLC and serves on our
    Board of Directors, disclaim beneficial ownership of these
    shares except to the extent of their respective pecuniary
    interests. The address for these entities is 920 SW Sixth
    Avenue, Suite 1400, Portland, Oregon 97204.
(3)
Luke M. Buse and Staci Lin Buse, as co-trustees, share voting
    and dispositive power with respect to the shares owned by of the
    Luke M. Buse and Staci Lin Buse Revocable Trust. Staci Lin Buse
    is the sister of Brent D. Richardson, our Executive Chairman,
    and Christopher C. Richardson, our General Counsel and director.
    The address for this trust is 6236 E. Montecito
    Avenue, Scottsdale, Arizona 85251.
(4)
Represents shares held of record by Exeter Capital, LLC, a
    limited liability company of which Brent D. Richardson, our
    Executive Chairman and a member of our Board of Directors, is
    the manager. Mr. Richardson has sole voting and dispositive
    power with respect to the shares held by Exeter Capital, LLC.
(5)
Represents shares held by Calle Camilia Investments, LLC, a
    limited liability company of which Christopher C. Richardson,
    our General Counsel and a member of our Board of Directors, is a
    manager. Mr. Richardson shares voting and dispositive power
    with respect to the shares held by Calle Camilia Investments,
    LLC with his wife and a family trust.
(6)
Includes 29,463 shares of common stock issuable upon
    exercise of vested stock options.
(7)
Consists of 10,012,138 shares of common stock held of
    record by the Endeavour Entities (see note (2) above).
    Messrs. Chad N. Heath and D. Mark Dorman, each of whom is a
    managing member of Endeavour Capital IV, LLC, the general
    partner of the Endeavour Entities, and serves on our Board of
    Directors, disclaim beneficial ownership of these shares except
    to the extent of their respective pecuniary interests.
(8)
In connection with our initial public offering, certain of our
    stockholders entered into a proxy and voting agreement, pursuant
    to which such persons granted to the Richardson Voting Group, a
    five-year irrevocable proxy to exercise voting authority with
    respect to certain shares of our common stock held by such
    persons, for so long as such shares are held by such persons.
    Upon the completion of our initial public offering, as a result
    of the proxy and voting agreement, the Richardson Voting Group
    had the power to exercise voting authority with respect to
    19,516,242 shares of our common stock, or 42.9% of our
    common stock at such time.
Under the terms of the voting agreement, if any person party to
    the voting agreement transfers shares covered by the proxy in
    open-market or other transactions, the proxy is no longer
    effective as to such shares. Accordingly, the number of shares
    as to which the Richardson Voting Group has the shared power to
    vote or direct the vote will decrease over time as shares held
    by other parties to the voting agreement are sold, which sales
    we may not be aware of since many of the shares held by such
    other parties are held in "street name." Based on
    information available to us, we believe that, as of
    July 31, 2009, the Richardson Voting Group had the power to
    exercise voting authority with respect to approximately
    17.0 million shares of our common stock, or approximately
    38% of our common stock. After giving effect to this offering,
    and based on the number of shares expected to be sold by us and
    the selling stockholders participating in this offering, we
    believe that the Richardson Voting Group will continue to have
    the power to exercise voting authority with respect to more than
    25% of our common stock. See "Certain Relationships and
    Related Transactions — Voting Agreement."
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SELLING
    STOCKHOLDERS
The following table sets forth information with respect to the
    number of shares of common stock beneficially owned by the
    selling stockholders named below and as adjusted to give effect
    to the sale of the shares offered hereby. The following table is
    prepared based on information supplied to us by the selling
    stockholders. The information in the following table has been
    presented in accordance with the rules of the SEC. Under SEC
    rules, beneficial ownership of a class of capital stock includes
    any shares of such class as to which a person, directly or
    indirectly, has or shares voting power or investment power and
    also any shares as to which a person has the right to acquire
    such voting or investment power within 60 days through the
    exercise of any stock option, warrant or other right. If two or
    more persons share voting power or investment power with respect
    to specific securities, each such person is deemed to be the
    beneficial owner of such securities.
Over-
Shares Beneficially
allotment
Shares Beneficially Owned
Shares
Owned After to the
Shares
Prior to the Offering
Being
Offering
Being
Shares Beneficially After the
    Over-allotment
(3)
Shares
Percent
(1)
Offered
Shares
Percent
(2)
Offered
(3)
Shares
Percent
(2)
Stockholders
Endeavor Associates Fund IV, L.P. and
    affiliates
(4)
10,012,138
22.5
%
Brent D.
    Richardson
(5)(8)
3,503,171
7.9
%
Christopher C.
    Richardson
(6)(8)
3,504,036
7.9
%
Luke M. Buse and Staci Lin Buse Revocable
    Trust
(7)(8)
3,503,171
7.9
%
Other Selling Stockholders
Total
*
Less than 1.0%
(1)
Based on 44,576,417 shares outstanding at June 30,
    2009.
(2)
Based on 45,576,417 shares outstanding, which reflects
    shares outstanding at June 30, 2009 plus
    1,000,000 shares issued by the Company in connection with
    this offering.
(3)
Amounts presented assume that the over-allotment option is
    exercised in full.
(4)
Messrs. Chad N. Heath and D. Mark Dorman, each of whom
    serves on our Board of Directors, are managing members of
    Endeavour Capital IV, LLC, the general partner of the Endeavour
    Entities. Endeavour Capital IV, LLC has voting and dispositive
    power with respect to the shares of the Endeavour Entities.
    Messrs. Chad N. Heath and D. Mark Dorman disclaim
    beneficial ownership of these shares except to the extent of
    their respective pecuniary interests therein. See "Certain
    Relationships and Related Transactions" for information
    regarding a professional services agreement we were previously a
    party to with Endeavour Capital IV, LLC.
(5)
Represents shares held of record by Exeter Capital, LLC, a
    limited liability company of which Brent D. Richardson, our
    Executive Chairman and a member of our Board of Directors, is
    the manager. Mr. Richardson has sole voting and dispositive
    power with respect to the shares held by Exeter Capital, LLC.
(6)
Represents shares held by Calle Camilia Investments, LLC, a
    limited liability company of which Christopher C. Richardson,
    our General Counsel and a member of our Board of Directors, is a
    manager. Mr. Richardson shares voting and dispositive power
    with respect to the shares held by Calle Camilia Investments,
    LLC with his wife and a family trust.
(7)
Staci L. Buse, the sister of Brent D. Richardson and Christopher
    C. Richardson, and Luke M. Buse, the
brother-in-law
of Brent D. Richardson and Christopher C. Richardson, are
    co-trustees of this selling stockholder, and each shares voting
    and dispositive power with respect to the shares of this selling
    stockholder.
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(8)
In connection with our initial public offering, certain of our
    stockholders entered into a proxy and voting agreement, pursuant
    to which such persons granted to the Richardson Voting Group a
    five-year irrevocable proxy to exercise voting authority with
    respect to certain shares of our common stock held by such
    persons, for so long as such shares are held by such persons.
    Upon the completion of our initial public offering, as a result
    of the proxy and voting agreement, the Richardson Voting Group
    had the power to exercise voting authority with respect to
    19,516,242 shares of our common stock, or 42.9% of our
    common stock at such time.
Under the terms of the voting agreement, if any person party to
    the voting agreement transfers shares covered by the proxy in
    open-market or other transactions, the proxy is no longer
    effective as to such shares. Accordingly, the number of shares
    as to which the Richardson Voting Group has the shared power to
    vote or direct the vote will decrease over time as shares held
    by other parties to the voting agreement are sold, which sales
    we may not be aware of since many of the shares held by such
    other parties are held in "street name." Based on
    information available to us, we believe that, as of
    July 31, 2009, the Richardson Voting Group had the power to
    exercise voting authority with respect to approximately
    17.0 million shares of our common stock, or approximately
    38% of our common stock. After giving effect to this offering,
    and based on the number of shares expected to be sold by us and
    the selling stockholders participating in this offering, we
    believe that the Richardson Voting Group will continue to have
    the power to exercise voting authority with respect to more than
    25% of our common stock. See "Certain Relationships and
    Related Transactions — Voting Agreement."
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DESCRIPTION
    OF CAPITAL STOCK
The following description of our capital stock summarizes
    provisions of our amended and restated certificate of
    incorporation and amended and restated bylaws. As of the date of
    this prospectus, our authorized capital stock consists of
    100,000,000 shares of common stock, $0.01 par value
    per share, and 10,000,000 shares of undesignated preferred
    stock, $0.01 par value per share. Immediately after
    completion of the offering, 45,576,417 shares of common
    stock and no shares of preferred stock will be outstanding.
The following description of the material provisions of our
    capital stock and amended and restated certificate of
    incorporation and amended and restated bylaws is only a summary,
    does not purport to be complete and is qualified by applicable
    law and the full provisions of our amended and restated
    certificate of incorporation and amended and restated bylaws.
Common
    Stock
Voting Rights.
Holders of common stock are
    entitled to one vote per share on any matter to be voted upon by
    stockholders. All shares of common stock rank equally as to
    voting and all other matters. The shares of common stock have no
    preemptive or conversion rights, no redemption or sinking fund
    provisions, are not liable for further call or assessment and
    are not entitled to cumulative voting rights.
Dividend Rights.
Subject to the prior rights
    of holders of preferred stock, for as long as such stock is
    outstanding, the holders of common stock are entitled to receive
    ratably any dividends when and as declared from time to time by
    our Board of Directors out of funds legally available for
    dividends. We have never declared or paid cash dividends. We
    currently intend to retain all future earnings for the operation
    and expansion of our business and do not anticipate paying cash
    dividends on the common stock in the foreseeable future.
Liquidation Rights.
Upon a liquidation or
    dissolution of our company, whether voluntary or involuntary,
    creditors and holders of our preferred stock with preferential
    liquidation rights will be paid before any distribution to
    holders of our common stock. After such distribution, holders of
    common stock are entitled to receive a pro rata distribution per
    share of any excess amount.
Undesignated
    Preferred Stock
Under our amended and restated certificate of incorporation, our
    Board of Directors has authority to issue undesignated preferred
    stock without stockholder approval. Our Board of Directors may
    also determine or alter for each class of preferred stock the
    voting powers, designations, preferences, and special rights,
    qualifications, limitations, or restrictions as permitted by
    law. Our Board of Directors may authorize the issuance of
    preferred stock with voting or conversion rights that could
    adversely affect the voting power or other rights of the holders
    of the common stock. Issuing preferred stock provides
    flexibility in connection with possible acquisitions and other
    corporate purposes, but could also, among other things, have the
    effect of delaying, deferring or preventing a change in control
    of our company and may adversely affect the market price of our
    common stock and the voting and other rights of the holders of
    common stock.
Registration
    Rights
We are a party to an amended investor rights agreement with the
    Endeavour Entities and certain other parties pursuant to which
    we agreed, under certain circumstances, to register shares of
    common stock held by each of the parties to the agreement under
    the Securities Act. The registration rights provisions of the
    investor rights agreement grant to the Endeavour Entities the
    right, beginning 90 days following the completion of our
    initial public offering, to cause us, at our expense, to use our
    reasonable commercial efforts to register such securities held
    by the Endeavour Entities for public resale, subject to certain
    limitations. The exercise of this right will be limited to two
    requests. In the event that we register any of our common stock
    following completion of this offering, the Endeavour Entities
    and certain other holders are entitled to "piggyback"
    registration rights in which they may require us to include
    their securities in future registration statements that we may
    file, either for our own account or for the account of other
    security holders exercising registration
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rights. In addition, such holders have the right to request that
    their shares of common stock be registered on a Registration
    Statement on
Form S-3
so long as the anticipated aggregate sales price of such
    registered securities as of the date of filing of the
    Registration Statement on
Form S-3
is at least $1 million. These registration rights are
    subject to various conditions and limitations, including the
    right of the underwriters of an offering to limit the number of
    registrable securities that may be included in the offering. We
    are generally required to bear all of the expenses of these
    registrations, except underwriting discounts and selling
    commissions and transfer taxes, if any. Registration of any
    securities pursuant to these registration rights will result in
    shares becoming freely tradable without restriction under the
    Securities Act immediately upon effectiveness of such
    registration.
Provisions
    of Delaware Law and our Charter and Bylaws with Anti-Takeover
    Implications
Charter
    and Bylaw Provisions
Our amended and restated certificate of incorporation and
    amended and restated bylaws include a number of provisions that
    may have the effect of encouraging persons considering
    unsolicited tender offers or other unilateral takeover proposals
    to negotiate with our Board of Directors rather than pursue
    non-negotiated takeover attempts. These provisions include the
    items described below.
Board Composition and Filling Vacancies.
Our
    bylaws provide that directors may be removed only for cause by
    the affirmative vote of the holders of a majority of the voting
    power of all the outstanding shares of capital stock entitled to
    vote generally in the election of directors voting together as a
    single class. Furthermore, any vacancy on our Board of
    Directors, however occurring, including a vacancy resulting from
    an increase in the size of our board, may only be filled by the
    affirmative vote of a majority of our directors then in office
    even if less than a quorum.
No Written Consent of Stockholders.
Our
    charter provides that all stockholder actions are required to be
    taken by a vote of the stockholders at an annual or special
    meeting, and that stockholders may not take any action by
    written consent in lieu of a meeting.
Meetings of Stockholders.
Our bylaws provide
    that only a majority of the members of our Board of Directors
    then in office may call special meetings of stockholders and
    only those matters set forth in the notice of the special
    meeting may be considered or acted upon at a special meeting of
    stockholders. Our bylaws limit the business that may be
    conducted at an annual meeting of stockholders to those matters
    properly brought before the meeting.
Advance Notice Requirements.
Our bylaws
    establish advance notice procedures with regard to stockholder
    proposals relating to the nomination of candidates for election
    as directors or new business to be brought before meetings of
    our stockholders. These procedures provide that notice of
    stockholder proposals must be timely given in writing to our
    corporate secretary prior to the meeting at which the action is
    to be taken. Generally, to be timely, notice must be received at
    our principal executive offices not earlier than the close of
    business on the 120th day, nor later than the close of
    business on the 90th day, prior to the first anniversary
    date of the annual meeting for the preceding year. The notice
    must contain certain information specified in the bylaws.
Amendment to Bylaws and Charter.
As required
    by the DGCL, any amendment of our charter must first be approved
    by a majority of our Board of Directors and, if required by law
    or our charter, thereafter be approved by a majority of the
    outstanding shares entitled to vote on the amendment, and a
    majority of the outstanding shares of each class entitled to
    vote thereon as a class, except that the amendment of the
    provisions relating to stockholder action, directors, limitation
    of liability and the amendment of our bylaws and certificate of
    incorporation must be approved by no less than
    66
2
/
3
percent
    of the voting power of all of the shares of capital stock issued
    and outstanding and entitled to vote generally in any election
    of directors, voting together as a single class. Our bylaws may
    be amended by the affirmative vote of a majority vote of the
    directors then in office, subject to any limitations set forth
    in the bylaws; and may also be amended by the affirmative vote
    of at least
    66
2
/
3
percent
    of the voting power of all of the shares of capital stock issued
    and outstanding and entitled to vote generally in any election
    of directors, voting together as a single class.
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Blank Check Preferred Stock.
Our charter
    provides for 10,000,000 authorized shares of preferred stock.
    The existence of authorized but unissued shares of preferred
    stock may enable our Board of Directors to render more difficult
    or to discourage an attempt to obtain control of us by means of
    a merger, tender offer, proxy contest, or otherwise. For
    example, if in the due exercise of its fiduciary obligations,
    our Board of Directors were to determine that a takeover
    proposal is not in the best interests of us or our stockholders,
    our Board of Directors could cause shares of preferred stock to
    be issued without stockholder approval in one or more private
    offerings or other transactions that might dilute the voting or
    other rights of the proposed acquirer or insurgent stockholder
    or stockholder group. In this regard, our certificate of
    incorporation grants our Board of Directors broad power to
    establish the rights and preferences of authorized and unissued
    shares of preferred stock. The issuance of shares of preferred
    stock could decrease the amount of earnings and assets available
    for distribution to holders of shares of common stock. The
    issuance may also adversely affect the rights and powers,
    including voting rights, of these holders and may have the
    effect of delaying, deterring, or preventing a change in control
    of us.
Section 203
    of the Delaware General Corporate Law
We are subject to the provisions of Section 203 of the
    DGCL. In general, Section 203 prohibits a publicly held
    Delaware corporation from engaging in a "business
    combination" with an "interested stockholder" for
    a three-year period following the time that this stockholder
    becomes an interested stockholder, unless the business
    combination is approved in a prescribed manner. A "business
    combination" includes, among other things, a merger, asset
    or stock sale, or other transaction resulting in a financial
    benefit to the interested stockholder. An "interested
    stockholder" is a person who, together with affiliates and
    associates, owns, or did own within three years prior to the
    determination of interested stockholder status, 15% or more of
    the corporation's voting stock. Under Section 203, a
    business combination between a corporation and an interested
    stockholder is prohibited unless it satisfies one of the
    following conditions:
•
before the stockholder became interested, the board of directors
    approved either the business combination or the transaction
    which resulted in the stockholder becoming an interested
    stockholder;
•
upon consummation of the transaction which resulted in the
    stockholder becoming an interested stockholder, the interested
    stockholder owned at least 85% of the voting stock of the
    corporation outstanding at the time the transaction commenced,
    excluding for purposes of determining the voting stock
    outstanding, shares owned by persons who are directors and also
    officers, and employee stock plans, in some instances; or
•
at or after the time the stockholder became interested, the
    business combination was approved by the board of directors of
    the corporation and authorized at an annual or special meeting
    of the stockholders by the affirmative vote of at least
    two-thirds of the outstanding voting stock which is not owned by
    the interested stockholder.
Limitations
    of Director Liability and Indemnification Directors, Officers
    and Employees
As permitted by the DGCL, provisions in our charter and bylaws
    limit or eliminate the personal liability of our directors.
    Consequently, directors will not be personally liable to us or
    our stockholders for monetary damages or breach of fiduciary
    duty as a director, except for liability for:
•
any breach of the director's duty of loyalty to us or our
    stockholders;
•
any act or omission not in good faith or that involves
    intentional misconduct or a knowing violation of law;
•
any unlawful payments related to dividends or unlawful stock
    repurchases, redemptions or other distributions; or
•
any transaction from which the director derived an improper
    personal benefit.
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These limitations of liability do not alter director liability
    under the federal securities laws and do not affect the
    availability of equitable remedies, such as an injunction or
    rescission.
In addition, our bylaws provide that:
•
we will indemnify our directors, officers and, in the discretion
    of our Board of Directors, certain employees, to the fullest
    extent permitted by the DGCL, subject to limited exceptions,
    including an exception for indemnification in connection with a
    proceeding (or counterclaim) initiated by such persons; and
•
we will advance expenses, including attorneys' fees, to our
    directors and, in the discretion of our Board of Directors,
    certain officers and employees, in connection with legal
    proceedings, subject to limited exceptions.
We have entered into indemnification agreements with each of our
    executive officers and directors. These agreements provide that,
    subject to limited exceptions and among other things, we will
    indemnify each of our executive officers and directors to the
    fullest extent permitted by law and advance expenses to each
    indemnitee in connection with any proceeding in which a right to
    indemnification is available.
We maintain general liability insurance that covers certain
    liabilities of our directors and officers arising out of claims
    based on acts or omissions in their capacities as directors or
    officers, including liabilities under the Securities Act.
    Insofar as indemnification for liabilities arising under the
    Securities Act may be permitted to directors, officers, or
    persons who control Grand Canyon Education, we have been
    informed that in the opinion of the SEC such indemnification is
    against public policy as expressed in the Securities Act and is
    therefore unenforceable.
These provisions may discourage stockholders from bringing a
    lawsuit against our directors for breach of their fiduciary
    duty. These provisions may also have the effect of reducing the
    likelihood of derivative litigation against directors and
    officers, even though such an action, if successful, might
    otherwise benefit us and our stockholders. Furthermore, a
    stockholder's investment may be adversely affected to the
    extent we pay the costs of settlement and damage awards against
    directors and officers pursuant to these indemnification
    provisions. We believe that these provisions, the
    indemnification agreements and the insurance are necessary to
    attract and retain talented and experienced directors and
    officers.
At present, there is no pending litigation or proceeding
    involving any of our directors or officers where indemnification
    will be required or permitted. We are not aware of any
    threatened litigation or proceeding that might result in a claim
    for such indemnification.
Nasdaq
Our common stock is listed on the Nasdaq Global Market under the
    symbol "LOPE."
Transfer
    Agent and Registrar
The transfer agent and registrar for our common stock is
    Computershare Trust Company, N.A.
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MATERIAL
    U.S. FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS
FOR
NON-U.S.
HOLDERS
The following is a general discussion of the material
    U.S. federal income and estate tax consequences to
non-U.S. Holders
with respect to the acquisition, ownership and disposition of
    our common stock. In general, a
"Non-U.S. Holder"
is any holder of our common stock other than the following:
•
a citizen or resident of the United States, including an alien
    individual who is a lawful permanent resident of the United
    States or meets the "substantial presence" test under
    section 7701(b)(3) of the Internal Revenue Code of 1986, as
    amended, or the Code;
•
a corporation (or an entity treated as a corporation) created or
    organized in the United States or under the laws of the United
    States, any state thereof, or the District of Columbia;
•
an estate, the income of which is subject to U.S. federal
    income tax regardless of its source; or
•
a trust, if (i) a U.S. court can exercise primary
    supervision over the administration of the trust and one or more
    U.S. persons can control all substantial decisions of the
    trust, or (ii) it has a valid election to be treated as a
    U.S. person in effect.
This discussion is based on current provisions of the Code,
    Treasury Regulations promulgated under the Code, judicial
    opinions, published positions of the Internal Revenue Service,
    or IRS, and all other applicable authorities, all of which are
    subject to change, possibly with retroactive effect. This
    discussion does not address all aspects of U.S. federal
    income and estate taxation or any aspects of state, local, or
non-U.S. taxation,
nor does it consider any specific facts or circumstances that
    may apply to particular
Non-U.S. Holders
that may be subject to special treatment under the
    U.S. federal income tax laws, such as insurance companies,
    tax-exempt organizations, financial institutions, brokers,
    dealers in securities, and U.S. expatriates. If a
    partnership is a beneficial owner of our common stock, the
    treatment of a partner in the partnership will generally depend
    upon the status of the partner and the activities of the
    partnership. This discussion assumes that the
Non-U.S. Holder
will hold our common stock as a capital asset, generally
    property held for investment.
PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS
    REGARDING THE U.S. FEDERAL, STATE, LOCAL, AND
NON-U.S. INCOME
AND OTHER TAX CONSIDERATIONS OF ACQUIRING, HOLDING, AND
    DISPOSING OF SHARES OF COMMON STOCK.
Dividends
As described above under "Dividend Policy," we do not
    anticipate declaring or paying any cash dividends on our common
    stock in the foreseeable future. However, if we do make
    distributions on our common stock, those payments will
    constitute dividends for U.S. tax purposes to the extent
    paid from our current and accumulated earnings and profits, as
    determined under U.S. federal income tax principles. To the
    extent those distributions exceed our current and accumulated
    earnings and profits, they will constitute a return of capital
    and will first reduce the recipient's basis in our common
    stock, but not below zero, and then will be treated as gain from
    the sale of stock as described below under
    "— Gain on Sale or Other Disposition of Common
    Stock."
In general, dividends paid to a
Non-U.S. Holder
will be subject to U.S. withholding tax at a rate equal to
    30% of the gross amount of the dividend, or a lower rate
    prescribed by an applicable income tax treaty, unless the
    dividends are effectively connected with a trade or business
    carried on by the
Non-U.S. Holder
within the United States. Under applicable Treasury Regulations,
    a
Non-U.S. Holder
will be required to satisfy certain certification requirements,
    generally on IRS
Form W-8BEN,
directly or through an intermediary, in order to claim a reduced
    rate of withholding under an applicable income tax treaty. If
    tax is withheld in an amount in excess of the amount prescribed
    by an applicable income tax treaty, a refund of the excess
    amount may generally be obtained by filing an appropriate claim
    for refund with the IRS.
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Dividends that are effectively connected with such a
    U.S. trade or business (and where a tax treaty applies, are
    attributable to a U.S. permanent establishment maintained
    by the recipient) generally will not be subject to
    U.S. withholding tax if the
Non-U.S. Holder
files the required forms, including IRS
Form W-8ECI,
or any successor form, with the payor of the dividend, but
    instead generally will be subject to U.S. federal income
    tax on a net income basis in the same manner as if the
Non-U.S. Holder
were a resident of the United States. A corporate
Non-U.S. Holder
that receives effectively connected dividends may be subject to
    an additional branch profits tax at a rate of 30%, or a lower
    rate prescribed by an applicable income tax treaty, with respect
    to effectively connected dividends (subject to adjustment).
Gain on
    Sale or Other Disposition of Common Stock
In general, a
Non-U.S. Holder
will not be subject to U.S. federal income tax on any gain
    realized upon the sale or other taxable disposition of the
Non-U.S. Holder's
shares of common stock unless:
•
the gain is effectively connected with a trade or business
    carried on by the
Non-U.S. Holder
within the United States;
•
the
Non-U.S. Holder
is an individual who holds shares of common stock as capital
    assets and is present in the United States for 183 days or
    more in the taxable year of disposition and various other
    conditions are met; or
•
our common stock constitutes a U.S. real property interest
    by reason of our status as a "United States real
    property holding corporation," or USRPHC, for
    U.S. federal income tax purposes at any time within the
    shorter of the five-year period preceding the disposition or the
Non-U.S. Holder's
holding period for our common stock.
If the recipient is a
non-United
States holder described in the first bullet above, the recipient
    will be required to pay tax on the net gain derived from the
    sale under regular graduated U.S. federal income tax rates,
    and corporate
non-United
States holders described in the first bullet above may be
    subject to the branch profits tax at a 30% rate or such lower
    rate as may be specified by an applicable income tax treaty. If
    the recipient is an individual
non-United
States holder described in the second bullet above, the
    recipient will be required to pay a flat 30% tax on the gain
    derived from the sale, which tax may be offset by United States
    source capital losses.
We believe that we are not currently and will not become a
    USRPHC. However, because the determination of whether we are a
    USRPHC depends on the fair market value of our U.S. real
    property relative to the fair market value of our other business
    assets, there can be no assurance that we will not become a
    USRPHC in the future. Even if we become a USRPHC, however, as
    long as our common stock is regularly traded on an established
    securities market, such common stock will be treated as
    U.S. real property interests only if the
Non-U.S. Holder
actually or constructively held more than 5% of our common stock
Information
    Reporting and Backup Withholding
Generally, we must report annually to the IRS the amount of
    dividends paid, the name and address of the recipient, and the
    amount, if any, of tax withheld. A similar report is sent to the
    recipient. These information reporting requirements apply even
    if withholding was not required because the dividends were
    effectively connected dividends or withholding was reduced by an
    applicable income tax treaty. Under tax treaties or other
    agreements, the IRS may make its reports available to tax
    authorities in the recipient's country of residence.
Payments made to a
Non-U.S. Holder
that is not an exempt recipient generally will be subject to
    backup withholding, currently at a rate of 28%, unless a
Non-U.S. Holder
certifies as to its foreign status, which certification may be
    made on IRS
Form W-8BEN.
Proceeds from the disposition of common stock by a
Non-U.S. Holder
effected by or through a United States office of a broker
    will be subject to information reporting and backup withholding,
    currently at a rate of 28% of the gross proceeds, unless the
Non-U.S. Holder
certifies to the payor under penalties of perjury
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as to, among other things, its address and status as a
Non-U.S. Holder
or otherwise establishes an exemption. Generally, United States
    information reporting and backup withholding will not apply to a
    payment of disposition proceeds if the transaction is effected
    outside the United States by or through a
non-U.S. office
of a broker. However, if the broker is, for U.S. federal
    income tax purposes, a U.S. person, a controlled foreign
    corporation, a foreign person who derives 50% or more of its
    gross income for specified periods from the conduct of a
    U.S. trade or business, specified U.S. branches of
    foreign banks or insurance companies or a foreign partnership
    with certain connections to the United States, information
    reporting but not backup withholding will apply unless:
•
the broker has documentary evidence in its files that the holder
    is a
Non-U.S. Holder
and other conditions are met; or
•
the holder otherwise establishes an exemption.
Backup withholding is not an additional tax. Rather, the amount
    of tax withheld is applied to the U.S. federal income tax
    liability of persons subject to backup withholding. If backup
    withholding results in an overpayment of U.S. federal
    income taxes, a refund may be obtained, provided the required
    documents are filed with the IRS.
Estate
    Tax
Our common stock owned or treated as owned by an individual who
    is not a citizen or resident of the United States (as
    specifically defined for U.S. federal estate tax purposes)
    at the time of death will be includible in the individual's
    gross estate for U.S. federal estate tax purposes, unless
    an applicable estate tax treaty provides otherwise.
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UNDERWRITING
Under the terms and subject to the conditions contained in an
    underwriting agreement
    dated          ,
    2009, we and the selling stockholders have agreed to sell to the
    underwriters named below, for whom Credit Suisse Securities
    (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith
    Incorporated are acting as representatives, the following
    respective numbers of shares of common stock:
Underwriter
Number of Shares
Credit Suisse Securities (USA) LLC
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
BMO Capital Markets Corp.
William Blair & Company, L.L.C.
Piper Jaffray & Co.
Barrington Research Associates, Inc.
Total
The underwriting agreement provides that the underwriters are
    obligated to purchase all the shares of common stock in the
    offering if any are purchased, other than those shares covered
    by the over-allotment option described below. The underwriting
    agreement also provides that if an underwriter defaults, the
    purchase commitments of non-defaulting underwriters may be
    increased or the offering may be terminated.
Certain of the selling stockholders have granted to the
    underwriters a
30-day
option to purchase on a pro rata basis up to an aggregate
    of          
    additional outstanding shares from such selling stockholders at
    the public offering price less the underwriting discounts and
    commissions. The option may be exercised only to cover any
    over-allotments of common stock.
The underwriters propose to offer the shares of common stock
    initially at the public offering price on the cover page of this
    prospectus and to selling group members at that price less a
    selling concession of $      per share.
    Thereafter, the representative may change the public offering
    price and concession.
The following table summarizes the compensation and estimated
    expenses we and the selling stockholders will pay:
Per Share
Total
Without
With
Without
With
Over-allotment
Over-allotment
Over-allotment
Over-allotment
Underwriting discounts and commissions paid by us
$
$
$
$
Expenses payable by us
$
$
$
$
Underwriting discounts and commissions paid by the selling
    stockholders
$
$
$
$
Expenses payable by the selling stockholders
$
$
$
$
We, our directors and executive officers, and the selling
    stockholders have agreed that we and they will not offer, sell,
    contract to sell, pledge, or otherwise dispose of, directly or
    indirectly, or file with the SEC a registration statement under
    the Securities Act relating to, any shares of our common stock
    or securities convertible into or exchangeable or exercisable
    for any shares of our common stock, enter into a transaction
    that would have the same effect, or enter into any swap, hedge,
    or other arrangement that transfers, in whole or in part, any of
    the economic consequences of ownership of our common stock,
    whether any of these transactions is to be settled by delivery
    of our common stock or other securities, in cash or otherwise,
    or publicly disclose the intention to make any offer, sale,
    pledge, disposition, or filing, or to enter into any
    transaction, swap, hedge, or other arrangement, without, in each
    case, the prior written consent of Credit Suisse Securities
    (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith
    Incorporated, for a period of 90 days after the date of
    this prospectus. However, in the event that either
    (1) during the last 17 days of the
"lock-up"
period, we release earnings results or material news or a
    material event relating to us occurs or (2) prior to the
    expiration of the
"lock-up"
period, we announce that we will release earnings results during
    the
16-day
period
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beginning on the last day of the
"lock-up"
period, then in either case the expiration of the
"lock-up"
will be extended until the expiration of the
18-day
period beginning on the date of the release of the earnings
    results or the occurrence of the material news or event, as
    applicable, unless Credit Suisse Securities (USA) LLC and
    Merrill Lynch, Pierce, Fenner & Smith Incorporated
    waive such extension in writing. The restrictions described in
    this paragraph do not apply to, among other things, the sale of
    shares to the underwriters, transactions by any person other
    than us relating to shares of common stock or other securities
    acquired in open-market transactions after the completion of the
    offering of shares or the offer, sale, issuance, or disposal by
    us of any of our securities, or any securities convertible into
    or exchangeable or exercisable for any of our securities,
    pursuant to our equity compensation plan.
We and the selling stockholders have agreed to indemnify the
    underwriters against liabilities under the Securities Act, or
    contribute to payments that the underwriters may be required to
    make in that respect.
Certain of the underwriters and their respective affiliates have
    from time to time performed, and may in the future perform,
    various financial advisory, commercial banking, and investment
    banking services for us and our affiliates in the ordinary
    course of business, for which they received, or will receive,
    customary fees and expenses. An affiliate of Merrill Lynch,
    Pierce, Fenner & Smith Incorporated has also acted as
    lender under our term loan due 2014.
In connection with the offering the underwriters may engage in
    stabilizing transactions, over-allotment transactions, syndicate
    covering transactions and penalty bids in accordance with
    Regulation M under the Exchange Act.
•
Stabilizing transactions permit bids to purchase the underlying
    security so long as the stabilizing bids do not exceed a
    specified maximum.
•
Over-allotment involves sales by the underwriters of shares in
    excess of the number of shares the underwriters are obligated to
    purchase, which creates a syndicate short position. The short
    position may be either a covered short position or a naked short
    position. In a covered short position, the number of shares
    over-allotted by the underwriters is not greater than the number
    of shares that they may purchase in the over-allotment option.
    In a naked short position, the number of shares involved is
    greater than the number of shares in the over-allotment option.
    The underwriters may close out any covered short position by
    either exercising their over-allotment option
and/or
purchasing shares in the open market.
•
Syndicate covering transactions involve purchases of the common
    stock in the open market after the distribution has been
    completed in order to cover syndicate short positions. In
    determining the source of shares to close out the short
    position, the underwriters will consider, among other things,
    the price of shares available for purchase in the open market as
    compared to the price at which they may purchase shares through
    the over-allotment option. If the underwriters sell more shares
    than could be covered by the over-allotment option, a naked
    short position, the position can only be closed out by buying
    shares in the open market. A naked short position is more likely
    to be created if the underwriters are concerned that there could
    be downward pressure on the price of the shares in the open
    market after pricing that could adversely affect investors who
    purchase in the offering.
•
Penalty bids permit the representative to reclaim a selling
    concession from a syndicate member when the common stock
    originally sold by the syndicate member is purchased in a
    stabilizing or syndicate covering transaction to cover syndicate
    short positions.
These stabilizing transactions, syndicate covering transactions
    and penalty bids may have the effect of raising or maintaining
    the market price of our common stock or preventing or retarding
    a decline in the market price of the common stock. As a result
    the price of our common stock may be higher than the price
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that might otherwise exist in the open market. These
    transactions may be effected on the Nasdaq Global Market or
    otherwise and, if commenced, may be discontinued at any time.
A prospectus in electronic format may be made available on the
    websites maintained by one or more of the underwriters, or
    selling group members, if any, participating in this offering
    and one or more of the underwriters participating in this
    offering may distribute prospectuses electronically. The
    representatives may agree to allocate a number of shares to
    underwriters and selling group members for sale to their online
    brokerage account holders. Internet distributions will be
    allocated by the underwriters and selling group members that
    will make Internet distributions on the same basis as other
    allocations.
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NOTICE TO
    EUROPEAN ECONOMIC AREA RESIDENTS
In relation to each Member State of the European Economic Area
    which has implemented the Prospectus Directive, which we refer
    to as a Relevant Member State, with effect from and including
    the date on which the Prospectus Directive is implemented in
    that Relevant Member State, which we refer to as the Relevant
    Implementation Date, an offer of shares of common stock to the
    public may not be made in that Relevant Member State prior to
    the publication of a prospectus in relation to the shares of
    common stock which has been approved by the competent authority
    in that Relevant Member State or, where appropriate, approved in
    another Relevant Member State and notified to the competent
    authority in that Relevant Member State, all in accordance with
    the Prospectus Directive, except that an offer to the public of
    any shares of common stock may be made at any time under the
    following exemptions under the Prospectus Directive if they have
    been implemented in the Relevant Member State,
(a) to legal entities which are authorized or regulated to
    operate in the financial markets or, if not so authorized or
    regulated, whose corporate purpose is solely to invest in
    securities;
(b) to any legal entity which has two or more of
    (1) an average of at least 250 employees during the
    last financial year; (2) a total balance sheet of more than
    €43,000,000, and (3) an annual net turnover of more
    than €50,000,000, as shown in its last annual or
    consolidated accounts; or
(c) to fewer than 100 natural or legal persons (other than
    qualified investors as defined in the Prospectus Directive)
    subject to obtaining the prior consent of the manager for any
    such offer;
provided that no such offer of shares shall result in a
    requirement for the publication of a prospectus pursuant to
    Article 3 of the Prospectus Directive.
For the purposes of this section, the expression an "offer
    of shares of common stock to the public" in relation to any
    shares of common stock in any Relevant Member State means the
    communication in any form and by any means of sufficient
    information on the terms of the offer and the shares of common
    stock to be offered so as to enable an investor to decide to
    purchase or subscribe the shares of common stock, as the same
    may be varied in that Member State by any measure implementing
    the Prospectus Directive in that Member State and the expression
    Prospectus Directive means Directive 2003/71/EC and includes any
    relevant implementing measure in each Relevant Member State.
NOTICE TO
    UNITED KINGDOM RESIDENTS
An invitation or inducement to engage in investment activity
    (within the meaning of Section 21 of the Financial Services
    and Markets Act 2000, or the FSMA) has only been communicated or
    caused to be communicated and will only be communicated or
    caused to be communicated in connection with the issue or sale
    of the shares in circumstances in which Section 21(1) of
    the FSMA does not apply to us. All applicable provisions of the
    FSMA have been complied with and will be complied with, with
    respect to anything done in relation to the shares in, from or
    otherwise involving the United Kingdom. This document is only
    being distributed to and is only directed at (i) persons
    who are outside the United Kingdom or (ii) investment
    professionals falling within Article 19(5) of the Financial
    Services and Markets Act 2000 (Financial Promotion) Order 2005,
    or the Order, or (iii) high net worth entities, and other
    persons to whom it may lawfully be communicated, falling within
    Article 49(2)(a) to (d) of the Order (all such persons
    together, we refer to as relevant persons). The shares are only
    available to, and any invitation, offer or agreement to
    subscribe, purchase or otherwise acquire such shares will be
    engaged only with, relevant persons. Any person who is not a
    relevant person should not act or rely on this document or any
    of its contents.
NOTICE TO
    SWISS INVESTORS
This document, as well as any other material relating to the
    shares which are the subject of the offering contemplated by
    this prospectus, do not constitute an issue prospectus pursuant
    to Article 652a of the Swiss Code of Obligations. The
    shares will not be listed on the SWX Swiss Exchange and,
    therefore the documents relating to the shares, including, but
    not limited to, this document, do not claim to comply with the
    disclosure standards of the listing rules of SWX Swiss Exchange
    and corresponding prospectus schemes annexed to the listing
    rules of the SWX Swiss Exchange. The shares are being offered in
    Switzerland by way of a private
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placement,
i.e.
to a small number of selected investors
    only, without any public offer and only to investors who do not
    purchase the shares with the intention to distribute them to the
    public. The investors will be individually approached by us from
    time to time. This document, as well as any other material
    relating to the shares, is personal and confidential and do not
    constitute an offer to any other person. This document may only
    be used by those investors to whom it has been handed out in
    connection with the offering described herein and may neither
    directly nor indirectly be distributed or made available to
    other persons without our express consent. It may not be used in
    connection with any other offer and shall in particular not be
    copied
and/or
distributed to the public in (or from) Switzerland.
NOTICE TO
    INVESTORS IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE
This document relates to an exempt offer in accordance with the
    Offered Securities Rules of the Dubai Financial Services
    Authority. This document is intended for distribution only to
    persons of a type specified in those rules. It must not be
    delivered to, or relied on by, any other person. The Dubai
    Financial Services Authority has no responsibility for reviewing
    or verifying any documents in connection with exempt offers. The
    Dubai Financial Services Authority has not approved this
    document nor taken steps to verify the information set out in
    it, and has no responsibility for it. The shares which are the
    subject of the offering contemplated by this prospectus may be
    illiquid
and/or
subject to restrictions on their resale. Prospective purchasers
    of the shares offered should conduct their own due diligence on
    the shares. If you do not understand the contents of this
    document you should consult an authorized financial adviser.
NOTICE TO
    CANADIAN RESIDENTS
Resale
    Restrictions
The distribution of the common stock in Canada is being made
    only on a private placement basis exempt from the requirement
    that we and the selling stockholders prepare and file a
    prospectus with the securities regulatory authorities in each
    province where trades of common stock are made. Any resale of
    the common stock in Canada must be made under applicable
    securities laws which will vary depending on the relevant
    jurisdiction, and which may require resales to be made under
    available statutory exemptions or under a discretionary
    exemption granted by the applicable Canadian securities
    regulatory authority. Purchasers are advised to seek legal
    advice prior to any resale of the common stock.
Representations
    of Purchasers
By purchasing the common stock in Canada and accepting a
    purchase confirmation a purchaser is representing to us, the
    selling stockholders, and the dealer from whom the purchase
    confirmation is received that:
•
the purchaser is entitled under applicable provincial securities
    laws to purchase the common stock without the benefit of a
    prospectus qualified under those securities laws,
•
where required by law, that the purchaser is purchasing as
    principal and not as agent,
•
the purchaser has reviewed the text above under "Resale
    Restrictions," and
•
the purchaser acknowledges and consents to the provision of
    specified information concerning its purchase of the common
    stock to the regulatory authority that by law is entitled to
    collect the information.
Further details concerning the legal authority for this
    information is available on request.
Rights of
    Action — Ontario Purchasers Only
Under Ontario securities legislation, certain purchasers who
    purchase a security offered by this prospectus during the period
    of distribution will have a statutory right of action for
    damages, or while still the owner of the common stock, for
    rescission against us and the selling stockholders in the event
    that this prospectus contains a misrepresentation without regard
    to whether the purchaser relied on the misrepresentation. The
    right of action for damages is exercisable not later than the
    earlier of 180 days from the date the purchaser first had
    knowledge of the facts giving rise to the cause of action and
    three years from the date on which payment is made for the
    common stock. The right of action for rescission is exercisable
    not later than 180 days from the
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date on which payment is made for the common stock. If a
    purchaser elects to exercise the right of action for rescission,
    the purchaser will have no right of action for damages against
    us or the selling stockholders. In no case will the amount
    recoverable in any action exceed the price at which the common
    stock were offered to the purchaser and if the purchaser is
    shown to have purchased the securities with knowledge of the
    misrepresentation, we and the selling stockholders will have no
    liability. In the case of an action for damages, we and the
    selling stockholders will not be liable for all or any portion
    of the damages that are proven to not represent the depreciation
    in value of the common stock as a result of the
    misrepresentation relied upon. These rights are in addition to,
    and without derogation from, any other rights or remedies
    available at law to an Ontario purchaser. The foregoing is a
    summary of the rights available to an Ontario purchaser. Ontario
    purchasers should refer to the complete text of the relevant
    statutory provisions.
Enforcement
    of Legal Rights
All of our directors and officers as well as the experts named
    herein and the selling stockholders may be located outside of
    Canada and, as a result, it may not be possible for Canadian
    purchasers to effect service of process within Canada upon us or
    those persons. All or a substantial portion of our assets and
    the assets of those persons may be located outside of Canada
    and, as a result, it may not be possible to satisfy a judgment
    against us or those persons in Canada or to enforce a judgment
    obtained in Canadian courts against us or those persons outside
    of Canada.
Taxation
    and Eligibility for Investment
Canadian purchasers of the common stock should consult their own
    legal and tax advisors with respect to the tax consequences of
    an investment in the common stock in their particular
    circumstances and about the eligibility of the common stock for
    investment by the purchaser under relevant Canadian legislation.
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LEGAL
    MATTERS
The validity of the shares of common stock offered by this
    prospectus and other legal matters will be passed upon for us by
    DLA Piper LLP (US), Phoenix, Arizona. The underwriters have been
    represented by Latham & Watkins LLP, Los Angeles,
    California.
EXPERTS
The financial statements of Grand Canyon Education, Inc.
    appearing in Grand Canyon Education, Inc.'s Annual Report
(Form 10-K)
for the year ended December 31, 2008 have been audited by
    Ernst & Young LLP, independent registered public
    accounting firm, as set forth in their report thereon, included
    therein, and incorporated herein by reference. Such financial
    statements are incorporated herein by reference in reliance upon
    such report given on the authority of such firm as experts in
    accounting and auditing.
WHERE YOU
    CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on
Form S-1,
which includes amendments and exhibits, under the Securities Act
    and the rules and regulations under the Securities Act for the
    registration of common stock being offered by this prospectus.
    This prospectus, which constitutes a part of the registration
    statement, does not contain all the information that is in the
    registration statement and its exhibits and schedules. Certain
    portions of the registration statement have been omitted as
    allowed by the rules and regulations of the SEC. Statements in
    this prospectus that summarize documents are not necessarily
    complete, and in each case you should refer to the copy of the
    document filed as an exhibit to the registration statement.
We are subject to the reporting and information requirements of
    the Exchange Act and, as a result, we are required to file
    periodic and current reports, proxy statements and other
    information with the SEC. You may read and copy the registration
    statement, including exhibits and schedules filed with it, and
    reports or other information we file with the SEC at the public
    reference facilities of the SEC at 100 F Street, N.E.,
    Room 1580, Washington, D.C. 20549. You may call the
    SEC at
1-800-SEC-0330
for further information on the operation of the public reference
    rooms. In addition, the registration statement and other public
    filings can be obtained from the SEC's Internet site at
http://www.sec.gov
.
INCORPORATION
    BY REFERENCE
The SEC allows us to "incorporate by reference"
    information in this prospectus that we have filed with it. This
    means that we can disclose important information to you by
    referring you to another document already on file with the SEC.
    The information incorporated by reference is an important part
    of this prospectus, except for any information that is
    superseded by information that is included directly in this
    prospectus.
This prospectus incorporates by reference the documents listed
    below that we have previously filed with the SEC (excluding any
    document, or portion thereof, to the extent disclosure is
    furnished and not filed).
•
our Annual Report on
Form 10-K
for the year ended December 31, 2008, filed with the SEC on
    February 20, 2009, which incorporates by reference certain
    sections from our proxy statement filed with the SEC on
    April 10, 2009, which we also incorporate by reference into
    this prospectus;
•
our Quarterly Reports on
Form 10-Q
for the quarters ended March 31, 2009 and June 30,
    2009; and
•
our Current Reports on
Form 8-K
filed with the SEC on February 19, 2009, March 25,
    2009, April 3, 2009, April 27, 2009, May 4, 2009,
    and August 3, 2009.
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We will provide to each person, including any beneficial owner,
    to whom a prospectus is delivered, a copy of the reports and
    documents that have been incorporated by reference in this
    prospectus, at no cost. Any such request may be made by writing
    or telephoning us at the following address or phone number:
Grand Canyon
    Education, Inc.
3300 West Camelback Road
Phoenix, Arizona 85017
Attention: Corporate Secretary
(602) 639-7500
These documents can also be requested through, and are available
    in, the Investor Relations section of our website, which is
    located at www.gcu.edu, or as described under "Where You
    Can Find Additional Information" above. The information on,
    or accessible through, our website does not constitute part of,
    and is not incorporated into, this prospectus.
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PART II
INFORMATION
    NOT REQUIRED IN PROSPECTUS
Item 13.
Other
    Expenses of Issuance and Distribution.
The following are the estimated expenses to be incurred in
    connection with the issuance and distribution of the securities
    registered under this registration statement, other than
    underwriting discounts and commissions. All amounts shown are
    estimates except the SEC registration fee and the Financial
    Industry Regulatory Authority, Inc. filing fee. The following
    expenses will be borne solely by the registrant.
SEC registration fee
8,442
FINRA filing fee
15,628
Nasdaq listing fee
*
Legal fees and expenses
*
Accounting fees and expenses
*
Transfer agent fees and expenses
*
Miscellaneous expenses
*
Total
*
Estimate
Item 14.
Indemnification
    of Directors and Officers.
Section 145(a) of the DGCL provides, in general, that a
    corporation may indemnify any person who was or is a party or is
    threatened to be made a party to any threatened, pending, or
    completed action, suit, or proceeding, whether civil, criminal,
    administrative, or investigative (other than an action by or in
    the right of the corporation), because he or she is or was a
    director, officer, employee, or agent of the corporation, or is
    or was serving at the request of the corporation as a director,
    officer, employee, or agent of another corporation, partnership,
    joint venture, trust, or other enterprise, against expenses
    (including attorneys' fees), judgments, fines, and amounts
    paid in settlement actually and reasonably incurred by the
    person in connection with such action, suit, or proceeding, if
    he or she acted in good faith and in a manner he or she
    reasonably believed to be in or not opposed to the best
    interests of the corporation and, with respect to any criminal
    action or proceeding, had no reasonable cause to believe his or
    her conduct was unlawful.
Section 145(b) of the DGCL provides, in general, that a
    corporation may indemnify any person who was or is a party or is
    threatened to be made a party to any threatened, pending, or
    completed action or suit by or in the right of the corporation
    to procure a judgment in its favor because the person is or was
    a director, officer, employee, or agent of the corporation, or
    is or was serving at the request of the corporation as a
    director, officer, employee, or agent of another corporation,
    partnership, joint venture, trust, or other enterprise, against
    expenses (including attorneys' fees) actually and
    reasonably incurred by the person in connection with the defense
    or settlement of such action or suit if he or she acted in good
    faith and in a manner he or she reasonably believed to be in or
    not opposed to the best interests of the corporation, except
    that no indemnification shall be made with respect to any claim,
    issue, or matter as to which he or she shall have been adjudged
    to be liable to the corporation unless and only to the extent
    that the Court of Chancery or other adjudicating court
    determines that, despite the adjudication of liability but in
    view of all of the circumstances of the case, he or she is
    fairly and reasonably entitled to indemnity for such expenses
    which the Court of Chancery or other adjudicating court shall
    deem proper.
Section 145(g) of the DGCL provides, in general, that a
    corporation may purchase and maintain insurance on behalf of any
    person who is or was a director, officer, employee, or agent of
    the corporation, or is or was serving at the request of the
    corporation as a director, officer, employee, or agent of
    another corporation, partnership, joint venture, trust or other
    enterprise against any liability asserted against such person
    and incurred by such person in any such capacity, or arising out
    of his or her status as such, whether or not the corporation
    would have the power to indemnify the person against such
    liability under Section 145 of the DGCL.
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Section 8.1 of our bylaws provides that we will indemnify,
    to the fullest extent permitted by the DGCL, any person who was
    or is made or is threatened to be made a party or is otherwise
    involved in any action, suit, or proceeding, whether civil,
    criminal, administrative, or investigative, by reason of the
    fact that he, or a person for whom he is the legal
    representative, is or was one of our directors or officers or,
    while serving as one of our directors or officers, is or was
    serving at our request as a director, officer, employee, or
    agent of another corporation or of another entity, against all
    liability and loss suffered and expenses (including
    attorneys' fees) reasonably incurred by such person,
    subject to limited exceptions relating to indemnity in
    connection with a proceeding (or part thereof) initiated by such
    person. Section 8.1 of our bylaws further provides for the
    advancement of expenses to each of our officers and directors.
Article VIII of our charter provides that, to the fullest
    extent permitted by the DGCL, as the same exists or may be
    amended from time to time, our directors shall not be personally
    liable to us or our stockholders for monetary damages for breach
    of fiduciary duty as a director. Under Section 102(b)(7) of
    the DGCL, the personal liability of a director to the
    corporation or its stockholders for monetary damages for breach
    of fiduciary duty can be limited or eliminated except
    (i) for any breach of the director's duty of loyalty
    to the corporation or its stockholders; (ii) for acts or
    omissions not in good faith or which involve intentional
    misconduct or a knowing violation of law; (iii) under
    Section 174 of the DGCL (relating to unlawful payment of
    dividend or unlawful stock purchase or redemption); or
    (iv) for any transaction from which the director derived an
    improper personal benefit.
We also intend to maintain a general liability insurance policy
    which covers certain liabilities of directors and officers of
    our company arising out of claims based on acts or omissions in
    their capacities as directors or officers, whether or not we
    would have the power to indemnify such person against such
    liability under the DGCL or the provisions of charter or bylaws.
We have entered into indemnification agreements with each of our
    directors and our executive officers. These agreements provide
    that we will indemnify each of our directors and such officers
    to the fullest extent permitted by law and by our charter and
    bylaws.
In any underwriting agreement we enter into in connection with
    the sale of common stock being registered hereby, the
    underwriters will agree to indemnify, under certain conditions,
    us, our directors, our officers and persons who control us,
    within the meaning of the Securities Act, against certain
    liabilities.
Item 15.
Recent
    Sales of Unregistered Securities.
Since January 1, 2006, we have issued the following
    securities that were not registered under the Securities Act:
Preferred
    Stock
On December 18, 2007, we sold an aggregate of
    3,829 shares of our newly designed Series C preferred
    stock at a purchase price of $3,500 per share, or approximately
    $13.4 million total, of which 1,675 shares were sold
    to the Endeavour Entities, 834 shares were sold to Rich
    Crow Enterprises, LLC (an investment entity controlled by Brent
    D. Richardson, our Executive Chairman, and Christopher C.
    Richardson, our General Counsel and a director), and
    935 shares were sold to 220 GCU, L.P. and its affiliates.
    The purchase price payable by Rich Crow Enterprises for its
    shares of Series C preferred stock was paid in part by the
    exchange of the 865 outstanding shares of Series B
    preferred stock it purchased in 2006. The sales were made in
    reliance on Rule 506 of Regulation D promulgated under
    the Securities Act.
Common
    Stock
In November 2008, we issued, in reliance on Section 4(2) of
    the Securities Act, 909,348 shares of our common stock upon
    the exercise of a warrant that was issued in June 2004. The
    exercise price of the warrant was approximately $0.58 per share,
    or $526,316 of the aggregate.
In November 2008, we granted, in reliance on Section 4(2)
    of the Securities Act, 109,329 shares of our common stock
    to our Chief Executive Officer.
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Item 16.
Exhibits
    and Financial Statement Schedules.
(a) Exhibits
Number
Description
Method of Filing
1.1
Form of Underwriting Agreement
To be filed by amendment.
3.1
Amended and Restated Certificate of Incorporation
Incorporated by reference to Exhibit 3.1 to Amendment
    No. 6 to the Company's Registration Statement on
Form S-1
filed with the SEC on November 12, 2008.
3.2
Amended and Restated Bylaws
Incorporated by reference to Exhibit 3.2 to Amendment
    No. 6 to the Company's Registration Statement on
Form S-1
filed with the SEC on November 12, 2008.
4.1
Specimen of Stock Certificate
Incorporated by reference to Exhibit 4.1 to Amendment
    No. 2 to the Company's Registration Statement on
Form S-1
filed with the SEC on September 29, 2008.
4.2
Amended and Restated Investor Rights Agreement, dated September
    17, 2008, by and among Grand Canyon Education, Inc. and the
    other parties named therein
Incorporated by reference to Exhibit 4.2 to Amendment
    No. 2 to the Company's Registration Statement on
Form S-1
filed with the SEC on September 29, 2008.
5.1
Opinion of DLA Piper LLP (US) regarding the validating of the
    common stock
Filed herewith.
10.1
Amended and Restated Executive Employment Agreement, dated
    September 10, 2008, by and between Grand Canyon Education, Inc.
    and Brent D. Richardson†
Incorporated by reference to Exhibit 10.1 to Amendment
    No. 2 to the Company's Registration Statement on
Form S-1
filed with the SEC on September 29, 2008.
10.2
Amended and Restated Executive Employment Agreement, dated
    September 10, 2008, by and between Grand Canyon Education, Inc.
    and Christopher C. Richardson†
Incorporated by reference to Exhibit 10.2 to Amendment
    No. 2 to the Company's Registration Statement on
Form S-1
filed with the SEC on September 29, 2008.
10.3
Executive Employment Agreement, dated September 1, 2008, by and
    between Grand Canyon Education, Inc. and Kathy Player†
Incorporated by reference to Exhibit 10.1 to the
    Company's Current Report on
Form 8-K
filed with the SEC on March 25, 2009.
10.4
2008 Equity Incentive Plan†
Incorporated by reference to Exhibit 10.4 to Amendment
    No. 2 to the Company's Registration Statement on
Form S-1
filed with the SEC on September 29, 2008.
10.5
2008 Employee Stock Purchase Plan†
Incorporated by reference to Exhibit 10.5 to Amendment
    No. 2 to the Company's Registration Statement on
Form S-1
filed with the SEC on September 29, 2008.
10.6
Lease Agreement, effective June 28, 2004, by and between Spirit
    Finance Acquisitions, LLC and Significant Education, LLC
Incorporated by reference to Exhibit 10.7 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.7
First Amendment to Lease Agreement, effective September 24,
    2004, by and between Spirit Finance Acquisitions, LLC and
    Significant Education, LLC
Incorporated by reference to Exhibit 10.8 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.8
Second Amendment to Lease Agreement, effective August 23, 2005,
    by and between Spirit Master Funding, LLC and Significant
    Education, LLC
Incorporated by reference to Exhibit 10.9 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
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Number
Description
Method of Filing
10.9
Third Amendment to Lease Agreement, effective June 2006, by and
    between Spirit Master Funding, LLC and Significant Education,
    Inc.
Incorporated by reference to Exhibit 10.10 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.10
Fourth Amendment to Lease Agreement, effective August 9, 2006,
    by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
Incorporated by reference to Exhibit 10.11 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.11
Fifth Amendment to Lease Agreement, effective December 31, 2006,
    by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
Incorporated by reference to Exhibit 10.12 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.12
Sixth Amendment to Lease Agreement, effective September 30,
    2007, by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
Incorporated by reference to Exhibit 10.13 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.13
Seventh Amendment to Lease Agreement, effective March 28, 2008,
    by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
Incorporated by reference to Exhibit 10.14 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.14
License Agreement, dated June 30, 2004, by and between Blanchard
    Education, LLC and Significant Education, LLC
Incorporated by reference to Exhibit 10.15 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.15
Letter Agreement, dated February 6, 2006, by and between The Ken
    Blanchard Companies and Grand Canyon University
Incorporated by reference to Exhibit 10.16 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.16
Amendment to License Agreement, dated May 8, 2008, by and
    between Blanchard Education, LLC and Grand Canyon Education, Inc.
Incorporated by reference to Exhibit 10.17 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.17
Collaboration Agreement, dated July 11, 2005, by and between
    Mind Streams, LLC and Significant Education, LLC (as
    supplemented by Project One and Project Two)
Incorporated by reference to Exhibit 10.18 to Amendment
    No. 1 to the Company's Registration Statement on
Form S-1
filed with the SEC on August 13, 2008.
10.18
Executive Employment Agreement, dated June 25, 2008, by and
    between Grand Canyon Education, Inc. and Daniel E. Bachus†
Incorporated by reference to Exhibit 10.19 to Amendment
    No. 1 to the Company's Registration Statement on
Form S-1
filed with the SEC on August 13, 2008.
10.19
Executive Employment Agreement, dated June 25, 2008, by and
    between Grand Canyon Education, Inc. and Brian E. Mueller†
Incorporated by reference to Exhibit 10.20 to Amendment
    No. 1 to the Company's Registration Statement on
Form S-1
filed with the SEC on August 13, 2008.
10.20
Executive Employment Agreement, dated June 25, 2008, by and
    between Grand Canyon Education, Inc. and W. Stan Meyer†
Incorporated by reference to Exhibit 10.21 to Amendment
    No. 1 to the Company's Registration Statement on
Form S-1
filed with the SEC on August 13, 2008.
10.21
Form of Director and Officer Indemnity Agreement
Incorporated by reference to Exhibit 10.21 to Amendment
    No. 2 to the Company's Registration Statement on
Form S-1
filed with the SEC on September 29, 2008.
10.22
Purchase and Sale Agreement, dated April 27, 2009, by and among
    Grand Canyon Education, Inc., Spirit Master Funding, LLC, and
    Spirit Management Company
Incorporated by reference to Exhibit 10.1 to the
    Company's Quarterly Report on
Form 10-Q
filed with the SEC on August 3, 2009.
II-4
Table of Contents
Number
Description
Method of Filing
10.23
Loan Agreement, dated April 27, 2009, by and between Grand
    Canyon Education, Inc. and Bank of America, N.A.
Incorporated by reference to Exhibit 10.2 to the
    Company's Quarterly Report on
Form 10-Q
filed with the SEC on August 3, 2009.
23.1
Consent of Independent Registered Public Accounting Firm
Filed herewith.
23.2
Consent of DLA Piper LLP (US)
Included in Exhibit 5.1.
24.1
Power of Attorney
Included on signature page.
Significant Education, LLC is the predecessor to Significant
    Education, Inc., which is the former name of Grand Canyon
    Education, Inc.
†
Indicates a management contract or any compensatory plan,
    contract or arrangement.
(b) Financial Statement Schedules
All schedules are omitted because they are not required, are not
    applicable or, the information is included in the financial
    statements or the notes thereto.
Item 17.
Undertakings.
Insofar as indemnification for liabilities arising under the
    Securities Act may be permitted to our directors, officers, and
    controlling persons pursuant to the foregoing provisions, or
    otherwise, we have been advised that in the opinion of the SEC
    such indemnification is against public policy as expressed in
    the Securities Act and is, therefore, unenforceable. In the
    event that a claim for indemnification against such liabilities
    (other than the payment by us of expenses incurred or paid by a
    director, officer, or controlling person of us in the successful
    defense of any action, suit, or proceeding) is asserted by such
    director, officer, or controlling person in connection with the
    securities being registered, we will, unless in the opinion of
    counsel the matter has been settled by controlling precedent,
    submit to a court of appropriate jurisdiction the question
    whether such indemnification by us is against public policy as
    expressed in the Securities Act and will be governed by the
    final adjudication of such issue.
The undersigned registrant hereby undertakes to provide to the
    underwriters at the closing specified in the underwriting
    agreement, certificates in such denominations and registered in
    such names as required by the underwriters to permit prompt
    delivery to each purchaser.
We hereby undertake that:
(i) for purposes of determining any liability under the
    Securities Act, the information omitted from the form of
    prospectus filed as part of this registration statement in
    reliance upon Rule 430A and contained in a form of
    prospectus filed by the registrant pursuant to
    Rule 424(b)(1) or (4) or 497(h) under the Securities
    Act shall be deemed to be part of this registration statement as
    of the time it was declared effective.
(ii) for purposes of determining any liability under the
    Securities Act, each post-effective amendment that contains a
    form of prospectus shall be deemed to be a new registration
    statement relating to the securities offered therein, and the
    offering of such securities at that time shall be deemed to be
    the initial bona fide offering thereof.
II-5
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
    registrant has duly caused this registration statement to be
    signed on its behalf by the undersigned, thereunto duly
    authorized, in the City of Phoenix, State of Arizona on
    August 26, 2009.
GRAND CANYON EDUCATION, INC.
By:
/s/  Brian
    E. Mueller
Name: Brian E. Mueller
Title:  Chief Executive Officer and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
    appears below constitutes and appoints Brian E. Mueller, Daniel
    E. Bachus, Brent D. Richardson, and Christopher C. Richardson,
    and each of them, his true and lawful attorneys-in-fact and
    agents, with full power of substitution and resubstitution, for
    him and in his name, place and stead, in any and all capacities,
    to sign such registration statement and any and all amendments,
    including past-effective amendments, to this registration
    statement, including a prospectus or amended prospectus therein
    and any registration statement for the same offering that is to
    be effective upon filing pursuant to Rule 462(b) under the
    Securities Act, and to file the same with all documents in
    connection therewith to be filed the Securities and Exchange
    Commission, granting unto said attorneys-in-fact and agents, and
    each of them, full power and authority to do and perform each
    and every act and thing requisite and necessary to be done in
    and about the premises, as fully and to all intents and purposes
    as he might or could do in person hereby ratifying and
    confirming all that said attorneys-in-fact and agents, or his
    substitute or substitutes, may lawfully do or cause to be done
    by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
    registration statement and the Power of Attorney has been signed
    below by the following persons on behalf of the registrant and
    in the capacities and on the dates indicated.
Signature
Title
Date
/s/  Brent
    D. Richardson
Brent
    D. Richardson
Executive Chairman
August 26, 2009
/s/  Brian
    E. Mueller
Brian
    E. Mueller
Chief Executive Officer and Director (Principal Executive
    Officer)
August 26, 2009
/s/  Daniel
    E. Bachus
Daniel
    E. Bachus
Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer)
August 26, 2009
/s/  Christopher
    C. Richardson
Christopher
    C. Richardson
General Counsel and Director
August 26, 2009
/s/  David
    J. Johnson
David
    J. Johnson
Director
August 26, 2009
/s/  Jack
    A. Henry
Jack
    A. Henry
Director
August 26, 2009
/s/  D.
    Mark Dorman
D.
    Mark Dorman
Director
August 26, 2009
/s/  Chad
    N. Heath
Chad
    N. Heath
Director
August 26, 2009
II-6
Table of Contents
EXHIBIT INDEX
Number
Description
Method of Filing
1.1
Form of Underwriting Agreement
To be filed by amendment.
3.1
Amended and Restated Certificate of Incorporation
Incorporated by reference to Exhibit 3.1 to Amendment
    No. 6 to the Company's Registration Statement on
Form S-1
filed with the SEC on November 12, 2008.
3.2
Amended and Restated Bylaws
Incorporated by reference to Exhibit 3.2 to Amendment
    No. 6 to the Company's Registration Statement on
Form S-1
filed with the SEC on November 12, 2008.
4.1
Specimen of Stock Certificate
Incorporated by reference to Exhibit 4.1 to Amendment
    No. 2 to the Company's Registration Statement on
Form S-1
filed with the SEC on September 29, 2008.
4.2
Amended and Restated Investor Rights Agreement, dated September
    17, 2008, by and among Grand Canyon Education, Inc. and the
    other parties named therein
Incorporated by reference to Exhibit 4.2 to Amendment
    No. 2 to the Company's Registration Statement on
Form S-1
filed with the SEC on September 29, 2008.
5.1
Opinion of DLA Piper LLP (US) regarding the validity of the
    common stock
Filed herewith
10.1
Amended and Restated Executive Employment Agreement, dated
    September 10, 2008, by and between Grand Canyon Education, Inc.
    and Brent D. Richardson†
Incorporated by reference to Exhibit 10.1 to Amendment
    No. 2 to the Company's Registration Statement on
Form S-1
filed with the SEC on September 29, 2008.
10.2
Amended and Restated Executive Employment Agreement, dated
    September 10, 2008, by and between Grand Canyon Education, Inc.
    and Christopher C. Richardson†
Incorporated by reference to Exhibit 10.2 to Amendment
    No. 2 to the Company's Registration Statement on
Form S-1
filed with the SEC on September 29, 2008.
10.3
Executive Employment Agreement, dated September 1, 2008, by and
    between Grand Canyon Education, Inc. and Kathy Player†
Incorporated by reference to Exhibit 10.1 to the
    Company's Current Report on
Form 8-K
filed with the SEC on March 25, 2009.
10.4
2008 Equity Incentive Plan†
Incorporated by reference to Exhibit 10.4 to Amendment
    No. 2 to the Company's Registration Statement on
Form S-1
filed with the SEC on September 29, 2008.
10.5
2008 Employee Stock Purchase Plan†
Incorporated by reference to Exhibit 10.5 to Amendment
    No. 2 to the Company's Registration Statement on
Form S-1
filed with the SEC on September 29, 2008.
10.6
Lease Agreement, effective June 28, 2004, by and between Spirit
    Finance Acquisitions, LLC and Significant Education, LLC
Incorporated by reference to Exhibit 10.7 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.7
First Amendment to Lease Agreement, effective September 24,
    2004, by and between Spirit Finance Acquisitions, LLC and
    Significant Education, LLC
Incorporated by reference to Exhibit 10.8 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.8
Second Amendment to Lease Agreement, effective August 23, 2005,
    by and between Spirit Master Funding, LLC and Significant
    Education, LLC
Incorporated by reference to Exhibit 10.9 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
Table of Contents
Number
Description
Method of Filing
10.9
Third Amendment to Lease Agreement, effective June 2006, by and
    between Spirit Master Funding, LLC and Significant Education,
    Inc.
Incorporated by reference to Exhibit 10.10 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.10
Fourth Amendment to Lease Agreement, effective August 9, 2006,
    by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
Incorporated by reference to Exhibit 10.11 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.11
Fifth Amendment to Lease Agreement, effective December 31, 2006,
    by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
Incorporated by reference to Exhibit 10.12 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.12
Sixth Amendment to Lease Agreement, effective September 30,
    2007, by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
Incorporated by reference to Exhibit 10.13 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.13
Seventh Amendment to Lease Agreement, effective March 28, 2008,
    by and between Spirit Master Funding, LLC and Significant
    Education, Inc.
Incorporated by reference to Exhibit 10.14 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.14
License Agreement, dated June 30, 2004, by and between Blanchard
    Education, LLC and Significant Education, LLC
Incorporated by reference to Exhibit 10.15 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.15
Letter Agreement, dated February 6, 2006, by and between The Ken
    Blanchard Companies and Grand Canyon University
Incorporated by reference to Exhibit 10.16 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.16
Amendment to License Agreement, dated May 8, 2008, by and
    between Blanchard Education, LLC and Grand Canyon Education, Inc.
Incorporated by reference to Exhibit 10.17 to the
    Company's Registration Statement on
Form S-1
filed with the SEC on May 13, 2008.
10.17
Collaboration Agreement, dated July 11, 2005, by and between
    Mind Streams, LLC and Significant Education, LLC (as
    supplemented by Project One and Project Two)
Incorporated by reference to Exhibit 10.18 to Amendment
    No. 1 to the Company's Registration Statement on
Form S-1
filed with the SEC on August 13, 2008.
10.18
Executive Employment Agreement, dated June 25, 2008, by and
    between Grand Canyon Education, Inc. and Daniel E. Bachus†
Incorporated by reference to Exhibit 10.19 to Amendment
    No. 1 to the Company's Registration Statement on
Form S-1
filed with the SEC on August 13, 2008.
10.19
Executive Employment Agreement, dated June 25, 2008, by and
    between Grand Canyon Education, Inc. and Brian E. Mueller†
Incorporated by reference to Exhibit 10.20 to Amendment
    No. 1 to the Company's Registration Statement on
Form S-1
filed with the SEC on August 13, 2008.
10.20
Executive Employment Agreement, dated June 25, 2008, by and
    between Grand Canyon Education, Inc. and W. Stan Meyer†
Incorporated by reference to Exhibit 10.21 to Amendment
    No. 1 to the Company's Registration Statement on
Form S-1
filed with the SEC on August 13, 2008.
10.21
Form of Director and Officer Indemnity Agreement
Incorporated by reference to Exhibit 10.21 to Amendment
    No. 2 to the Company's Registration Statement on
Form S-1
filed with the SEC on September 29, 2008.
10.22
Purchase and Sale Agreement, dated April 27, 2009, by and among
    Grand Canyon Education, Inc., Spirit Master Funding, LLC, and
    Spirit Management Company
Incorporated by reference to Exhibit 10.1 to the
    Company's Quarterly Report on
Form 10-Q
filed with the SEC on August 3, 2009.
Table of Contents
Number
Description
Method of Filing
10.23
Loan Agreement, dated April 27, 2009, by and between Grand
    Canyon Education, Inc. and Bank of America, N.A.
Incorporated by reference to Exhibit 10.2 to the
    Company's Quarterly Report on
Form 10-Q
filed with the SEC on August 3, 2009.
23.1
Consent of Independent Registered Public Accounting Firm
Filed herewith.
23.2
Consent of DLA Piper LLP (US)
Included in Exhibit 5.1.
24.1
Power of Attorney
Included on signature page.
Significant Education, LLC is the predecessor to Significant
    Education, Inc., which is the former name of Grand Canyon
    Education, Inc.
†
Indicates a management contract or any compensatory plan,
    contract or arrangement.