| Title of each class |   | Name of each exchange on which registered |
|---------------------|--------|-------------------------------------------|
|  Common shares |   |  Toronto Stock Exchange, NYSE Amex   |

----

----

----

|                                        |   | Year EndedAugust 31,2011 |        |   | Year EndedAugust 31,2010 |   |       | Year EndedAugust 31,2009 |   |   | Year EndedAugust 31,2008 |   |   | Two MonthsEndedAugust 31,2007 |       |   | Year EndedJune 30,2007 |   |
|---------------------------------------------|--------|--------------------------|-------------|--------|--------------------------|--------|------------|--------------------------|--------|--------|--------------------------|--------|--------|-------------------------------|------------|--------|------------------------|--------|
| Consolidated Income Statement Data (1)      |   | (C$)                     |        |   | (C$)                     |   |       | (C$)                     |   |   | (C$)                     |   |   | (C$)                          |       |   | (C$)                   |   |
| Revenues                                    |   |                     | 58,575,126  |   |                     |   | 55,954,852 |                     |   |   | 44,550,958               |   |   |                          | 31,161,279 |   |                   |   | 1,166,769 |   |   |   | 9,303,448 |   |
| Direct costs                                |   |                     | 21,430,791  |   |                     |   | 20,670,302 |                     |   |   | 16,234,348               |   |   |                          | 12,067,789 |   |                   |   | 547,266 |   |   |   | 4,587,634 |   |
| Other expenses                              |   |                     | 41,216,072  |   |                     |   | 33,669,709 |                     |   |   | 27,731,472               |   |   |                          | 22,625,691 |   |                   |   | 1,152,735 |   |   |   | 5,839,938 |   |
| Income (loss) from operations               |   |                     | (4,071,737  | )      |                     |   | 1,614,841  |                     |   |   | 585,138                  |   |   |                          | (3,532,201 | )      |                   |   | (533,232 | ) |   |   | (1,124,124 | ) |
| Other income (expenses)                     |   |                     | (6,470,385  | )      |                     |   | (3,027,643 | )                        |   |   | 193,213                  |   |   |                          | (1,124,461 | )      |                   |   | (148,031 | ) |   |   | 1,729,392 |   |
| Income (loss) before income taxes           |   |                     | (10,542,122 | )      |                     |   | (1,412,802 | )                        |   |   | 778,351                  |   |   |                          | (4,589,071 | )      |                   |   | (681,263 | ) |   |   | 605,268 |   |
| Income tax recovery (provision)             |   |                     | 894,623     |   |                     |   | 2,365,055  |                     |   |   | (285,241                 | )      |   |                          | (351,432   | )      |                   |   | (32,508 | ) |   |   | (243,684 | ) |
| Non-controlling interests                   |   |                     | (443,565    | )      |                     |   | (369,883   | )                        |   |   | (477,103                 | )      |   |                          | (109,155   | )      |                   |   | 65,334 |   |   |   | (58,294 | ) |
| Net income (loss)                           |   |                     | (10,091,064 | )      |                     |   | 582,370    |                     |   |   | 16,007                   |   |   |                          | (5,049,678 | )      |                   |   | (648,437 | ) |   |   | 303,290 |   |
| Basic and diluted earnings (loss) per share |   |                     | (0.15       | )      |                     |   | 0.01       |                     |   |   | 0.00                     |   |   |                          | (0.09      | )      |                   |   | (0.01 | ) |   |   | 0.01 |   |

|  Consolidated Income Statement Data (1) |   | Amended,YearEndedAugust 31,2011(C$) |         |   | Amended,Year EndedAugust 31,2010(C$) |   |        | Amended,Year EndedAugust 31,2009(C$) |   |   | Year EndedAugust 31,2008(C$) |   |   | Two MonthsEndedAugust 31,2007(C$) |       |   | Year EndedJune 30,2007(C$) |   |
|----------------------------------------------|--------|-------------------------------------|--------------|--------|--------------------------------------|--------|-------------|--------------------------------------|--------|--------|------------------------------|--------|--------|-----------------------------------|------------|--------|----------------------------|--------|
| Revenues                                     |   |                                | 58,575,126   |   |                                 |   | 55,954,852  |                                 |   |   | 44,550,958                   |   |   |                              | 31,161,279 |   |                       |   | 1,166,769 |   |   |   | 9,303,448 |   |
| Income (loss) from operations                |   |                                | (10,009,171) |   |                                 |   | (1,104,175) |                                 |   |   | 585,138                      |   |   |                              | (3,537,800 | )      |                       |   | (533,232 | ) |   |   | (1,133,675 | ) |
| Net income(loss)                             |   |                                | (10,211,769) |   |                                 |   | 273,599     |                                 |   |   | 16,007                       |   |   |                              | (5,905,655 | )      |                       |   | (648,437 | ) |   |   | 158 |   |
| Basic and diluted earnings (loss) per share  |   |                                | (0.15)       |   |                                 |   | 0.01        |                                 |   |   | 0.00                         |   |   |                              | (0.10      | )      |                       |   | (0.01 | ) |   |   | (0.01 | ) |

----

|  Consolidated Balance Sheet Data           |   | As atAugust 31,2011(C$) |       |   | As atAugust 31,2010(C$) |   |       | As atAugust 31,2009(C$) |   |   | As atAugust 31,2008(C$) |   |   | As atAugust 31,2007(C$) |       |   | As atJune 30,2007(C$) |   |
|-------------------------------------------------|--------|-------------------------|------------|--------|-------------------------|--------|------------|-------------------------|--------|--------|-------------------------|--------|--------|-------------------------|------------|--------|-----------------------|--------|
| Current assets                                  |   |                    | 16,577,428 |   |                    |   | 24,523,282 |                    |   |   | 22,015,521              |   |   |                    | 18,393,197 |   |                  |   | 17,732,653 |   |   |   | 15,232,534 |   |
| Current liabilities                             |   |                    | 21,179,327 |   |                    |   | 26,359,720 |                    |   |   | 21,574,878              |   |   |                    | 18,217,681 |   |                  |   | 5,058,432 |   |   |   | 2,685,972 |   |
| Working capital (deficit)                       |   |                    | (4,601,899 | )      |                    |   | (1,836,438 | )                       |   |   | 440,643                 |   |   |                    | 175,516    |   |                  |   | 12,674,221 |   |   |   | 12,546,562 |   |
| Other assets                                    |   |                    | 24,583,006 |   |                    |   | 30,446,056 |                    |   |   | 25,506,171              |   |   |                    | 25,424,368 |   |                  |   | 6,594,395 |   |   |   | 6,072,375 |   |
| Total assets                                    |   |                    | 41,160,434 |   |                    |   | 54,969,338 |                    |   |   | 47,521,692              |   |   |                    | 43,817,565 |   |                  |   | 24,327,048 |   |   |   | 21,304,909 |   |
| Capital lease obligations                       |   |                    | 249,132    |   |                    |   | 222,810    |                    |   |   | 291,220                 |   |   |                    | 176,143    |   |                  |   | 65,370 |   |   |   | 68,513 |   |
| Long-term debt                                  |   |                    | 34,232     |   |                    |   | 36,724     |                    |   |   | 44,327                  |   |   |                    | 10,322     |   |                  |   | 3,265,594 |   |   |   | 3,212,756 |   |
| Non-controlling interests                       |   |                    | 1,238,271  |   |                    |   | 1,327,126  |                    |   |   | 1,198,606               |   |   |                    | 1,345,065  |   |                  |   | 1,043,996 |   |   |   | 653,982 |   |
| Total liabilities and non-controlling interests |   |                    | 23,363,064 |   |                    |   | 27,946,380 |                    |   |   | 24,850,638              |   |   |                    | 21,322,758 |   |                  |   | 9,433,392 |   |   |   | 6,621,223 |   |
| Share capital                                   |   |                    | 48,182,766 |   |                    |   | 47,709,836 |                    |   |   | 44,350,606              |   |   |                    | 44,350,606 |   |                  |   | 26,861,878 |   |   |   | 26,851,807 |   |
| Shareholders’ equity                      |   |                    | 17,797,370 |   |                    |   | 27,022,958 |                    |   |   | 22,671,054              |   |   |                    | 22,494,807 |   |                  |   | 14,893,656 |   |   |   | 14,683,686 |   |
| Number of common shares outstanding             |   |                    | 71,949,344 |   |                    |   | 69,226,011 |                    |   |   | 64,109,297              |   |   |                    | 44,350,606 |   |                  |   | 47,858,225 |   |   |   | 47,840,073 |   |

|                                            |   | As atAugust 31,2011 |       |   | As atAugust 31,2010 |   |       | As atAugust 31,2009 |   |   | As atAugust 31,2008 |   |   | As atAugust 31,2007 |       |   | As atJune 30,2007 |   |
|-------------------------------------------------|--------|---------------------|------------|--------|---------------------|--------|------------|---------------------|--------|--------|---------------------|--------|--------|---------------------|------------|--------|-------------------|--------|
| Consolidated Balance Sheet Data                 |   | (C$)                |       |   | (C$)                |   |       | (C$)                |   |   | (C$)                |   |   | (C$)                |       |   | (C$)              |   |
| Total assets                                    |   |                | 40,881,372 |   |                |   | 54,690,276 |                |   |   | 47,521,692          |   |   |                | 43,817,565 |   |              |   | 24,327,048 |   |   |   | 21,511,074 |   |
| Total liabilities and non-controlling interests |   |                | 22,275,207 |   |                |   | 26,648,963 |                |   |   | 23,652,032          |   |   |                | 19,977,691 |   |              |   | 9,638,785 |   |   |   | 6,824,450 |   |
| Share capital                                   |   |                | 48,182,766 |   |                |   | 47,709,836 |                |   |   | 44,350,606          |   |   |                | 44,350,606 |   |              |   | 26,861,878 |   |   |   | 26,851,807 |   |
| Shareholders’ equity                      |   |                | 18,606,165 |   |                |   | 28,041,313 |                |   |   | 23,869,660          |   |   |                | 23,839,874 |   |              |   | 14,688,263 |   |   |   | 14,686,624 |   |
| Number of common shares outstanding             |   |                | 71,949,344 |   |                |   | 69,226,011 |                |   |   | 64,109,297          |   |   |                | 44,350,606 |   |              |   | 47,858,225 |   |   |   | 47,840,073 |   |

----

| Independent Auditors’ Report of Deloitte & Touche LLP, Independent Registered Chartered Accountants dated February 29, 2012 | F-1 |
|---------------------------------------------------------------------------------------------------------------------------------------|-----|
| Consolidated balance sheets as of August 31, 2011 and 2010                                                                            | F-2 |
| Consolidated Statements of Income (Loss) and Comprehensive (Loss) Income for the year ended August 31, 2011, 2010 and 2009            | F-3 |
| Consolidated Statements of Accumulated Other Comprehensive Loss for the year ended August 31, 2011, 2010 and 2009                     | F-4 |
| Consolidated Statements of Shareholders’ Equity for the year ended August 31, 2011, 2010 and 2009                               | F-5 |
| Consolidated Statements of Cash Flows for the year ended August 31, 2011, 2010 and 2009                                               | F-6 |
| Notes to Consolidated Financial Statements                                                                                            | F-7 |

----

----

----

|                                                                        |   | August 31,2011 |        |   | August 31,2010 |   |
|-----------------------------------------------------------------------------|--------|----------------|-------------|--------|----------------|--------|
|                                                                        |   |           |        |   |           |   |
| ASSETS                                                                      |   |
|                                                                        |   |           |        |   |           |   |
| CURRENT                                                                     |   |           |        |   |           |   |
| Cash and cash equivalents                                                   |   | $              | 6,456,568   |   |           | $      | 11,511,835 |   |
| Restricted cash                                                             |   |           | 250,000     |   |           |   | - |   |
| Accounts receivable (Note 4)                                                |   |           | 8,513,553   |   |           |   | 11,223,894 |   |
| Marketable securities (Note 5)                                              |   |           | -           |   |           |   | 60,000 |   |
| Prepaid expenses and other assets (Note 6)                                  |   |           | 763,469     |   |           |   | 1,197,086 |   |
| Inventory                                                                   |   |           | 593,838     |   |           |   | 530,467 |   |
|                                                                        |   |           |        |   |           |   |   |   |
| TOTAL CURRENT ASSETS                                                        |   |           | 16,577,428  |   |           |   | 24,523,282 |   |
| DUE FROM RELATED PARTIES (Note 23)                                          |   |           | 100,000     |   |           |   | 143,721 |   |
| PROPERTYAND EQUIPMENT (Note 7)                                              |   |           | 2,631,818   |   |           |   | 3,418,853 |   |
| INTANGIBLE ASSETS (Note 8)                                                  |   |           | 10,939,198  |   |           |   | 14,825,117 |   |
| GOODWILL (Note 9)                                                           |   |           | 8,711,791   |   |           |   | 10,999,696 |   |
| DEFERRED OFFERING COSTS (Note 10)                                           |   |           | -           |   |           |   | 400,252 |   |
| FUTURE INCOME TAX ASSETS (Note 17)                                          |   |           | 2,200,199   |   |           |   | 658,417 |   |
|                                                                        |   |           |        |   |           |   |   |   |
| TOTAL ASSETS                                                                |   | $              | 41,160,434  |   |           | $      | 54,969,338 |   |
|                                                                        |   |           |        |   |           |   |   |   |
| LIABILITIES                                                                 |   |
|                                                                        |   |           |        |   |           |   |   |   |
| CURRENT                                                                     |   |           |        |   |           |   |   |   |
| Accounts payable and accrued liabilities (Note 11)                          |   | $              | 4,484,536   |   |           | $      | 5,007,187 |   |
| Income taxes payable                                                        |   |           | 499,905     |   |           |   | 522,921 |   |
| Deferred educational revenue                                                |   |           | 13,881,145  |   |           |   | 17,836,047 |   |
| Capital lease obligations – current portion (Note 12)                 |   |           | 101,765     |   |           |   | 118,098 |   |
| Current portion of long-term debt (Note 12)                                 |   |           | 2,152,492   |   |           |   | 2,757,164 |   |
| Due to related parties (Note 23)                                            |   |           | 59,484      |   |           |   | 118,303 |   |
|                                                                        |   |           |        |   |           |   |   |   |
| TOTAL CURRENT LIABILITIES                                                   |   |           | 21,179,327  |   |           |   | 26,359,720 |   |
|                                                                        |   |           |        |   |           |   |   |   |
|                                                                        |   |           |        |   |           |   |   |   |
| FUTURE INCOME TAX LIABILITIES (Note 17)                                     |   |           | 662,102     |   |           |   | - |   |
|                                                                        |   |           |        |   |           |   |   |   |
| CAPITAL LEASE OBLIGATIONS (Note 12)                                         |   |           | 249,132     |   |           |   | 222,810 |   |
|                                                                        |   |           |        |   |           |   |   |   |
| LONG-TERM DEBT (Note 12)                                                    |   |           | 34,232      |   |           |   | 36,724 |   |
|                                                                        |   |           |        |   |           |   |   |   |
| TOTAL LIABILITIES                                                           |   |           | 22,124,793  |   |           |   | 26,619,254 |   |
|                                                                        |   |           |        |   |           |   |   |   |
| NON-CONTROLLING INTERESTS                                                   |   |           | 1,238,271   |   |           |   | 1,327,126 |   |
|                                                                        |   |           |        |   |           |   |   |   |
| SHAREHOLDERS’ EQUITY                                                  |   |
|                                                                        |   |           |        |   |           |   |   |   |
| SHARE CAPITAL (Note 13)                                                     |   |           | 48,182,766  |   |           |   | 47,709,836 |   |
| CONTRIBUTED SURPLUS                                                         |   |           | 5,354,158   |   |           |   | 5,200,036 |   |
| WARRANTS (Note 13)                                                          |   |           | 334,020     |   |           |   | 63,000 |   |
| TREASURY SHARES HELD (Note 14)                                              |   |           | (3,304,055  | )      |           |   | (3,273,790 | ) |
| ACCUMULATED OTHER COMPREHENSIVE LOSS                                        |   |           | (473,904    | )      |           |   | (471,573 | ) |
| DEFICIT                                                                     |   |           | (32,295,615 | )      |           |   | (22,204,551 | ) |
|                                                                        |   |           |        |   |           |   |   |   |
| RETAINED EARNINGS AND ACCUMULATED OTHER COMPREHENSIVE INCOME                |   |           | (32,769,519 | )      |           |   | (22,676,124 | ) |
| TOTAL SHAREHOLDERS’ EQUITY                                            |   |           | 17,797,370  |   |           |   | 27,022,958 |   |
|                                                                        |   |           |        |   |           |   |   |   |
| TOTAL LIABILITIES, NON-CONTROLLING INTERESTS AND SHAREHOLDERS’ EQUITY |   | $              | 41,160,434  |   |           | $      | 54,969,338 |   |

| “Toby Chu”                          |   | “Troy Rice” |
|-------------------------------------------------|--------|-------------------------|
| Toby Chu, Chief Executive Officer &Director |   | Troy Rice, Director     |

----

|                                                                                 |   | Year EndedAugust 31,2011 |        |   | Year EndedAugust 31,2010 |   |       | Year EndedAugust 31,2009 |   |
|--------------------------------------------------------------------------------------|--------|--------------------------|-------------|--------|--------------------------|--------|------------|--------------------------|--------|
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |
| REVENUES                                                                             |   |                     |        |   |                     |   |       |                     |   |
| Educational                                                                          |   | $                        | 56,665,246  |   |                     | $      | 54,388,128 |                     |   | $ | 43,236,630 |   |
| Design and advertising                                                               |   |                     | 1,909,880   |   |                     |   | 1,566,724  |                     |   |   | 1,314,328 |   |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
|                                                                                 |   |                     | 58,575,126  |   |                     |   | 55,954,852 |                     |   |   | 44,550,958 |   |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| DIRECT COSTS                                                                         |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| Educational                                                                          |   |                     | 20,434,332  |   |                     |   | 19,967,244 |                     |   |   | 15,595,946 |   |
| Design and advertising                                                               |   |                     | 996,459     |   |                     |   | 703,058    |                     |   |   | 638,402 |   |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
|                                                                                 |   |                     | 21,430,791  |   |                     |   | 20,670,302 |                     |   |   | 16,234,348 |   |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| OTHER EXPENSES                                                                       |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| General and administrative (Note 21)                                                 |   |                     | 39,237,013  |   |                     |   | 31,899,806 |                     |   |   | 25,513,613 |   |
| Amortization of property, equipment and intangible assets                            |   |                     | 1,657,575   |   |                     |   | 1,537,277  |                     |   |   | 1,636,761 |   |
| Stock-based compensation                                                             |   |                     | 91,122      |   |                     |   | 232,626    |                     |   |   | 581,098 |   |
| Business development costs                                                           |   |                     | 230,362     |   |                     |   | -          |                     |   |   | - |   |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
|                                                                                 |   |                     | 41,216,072  |   |                     |   | 33,669,709 |                     |   |   | 27,731,472 |   |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
|                                                                                 |   |                     | (4,071,737  | )      |                     |   | 1,614,841  |                     |   |   | 585,138 |   |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| INTEREST AND OTHER INCOME                                                            |   |                     | 180,645     |   |                     |   | 207,625    |                     |   |   | 72,255 |   |
| FOREIGN EXCHANGE GAIN (LOSS), NET                                                    |   |                     | 10,771      |   |                     |   | (96,677    | )                        |   |   | 162,537 |   |
| LOSS ON DISPOSAL OF ASSETS                                                           |   |                     | (39,656     | )      |                     |   | (174,516   | )                        |   |   | - |   |
| INTEREST ON LONG-TERM DEBT                                                           |   |                     | (153,656    | )      |                     |   | (92,346    | )                        |   |   | (41,579 | ) |
| IMPAIRMENT OF MARKETABLE SECURITIES (Note 5)                                         |   |                     | (60,000     | )      |                     |   | (127,229   | )                        |   |   | - |   |
| IMPAIRMENT OF LONG-LIVED ASSETS AND GOODWILL                                         |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| (Notes 7, 8 & 9)                                                                 |   |                     | (5,897,778  | )      |                     |   | (2,000,000 | )                        |   |   | - |   |
| WRITE-OFF OF DEFERRED OFFERING COSTS (Note 10)                                       |   |                     | (510,711    | )      |                     |   | (200,000   | )                        |   |   | - |   |
| RESTRUCTURING AND INTEGRATION COSTS (Note 16)                                        |   |                     | -           |   |                     |   | (544,500   | )                        |   |   | - |   |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| LOSS BEFORE INCOME TAXES                                                             |   |                     | (10,542,122 | )      |                     |   | (1,412,802 | )                        |   |   | 778,351 |   |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| INCOME TAX RECOVERY (PROVISION) (Note 17)                                            |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| Current income tax recovery (provision)                                              |   |                     | 14,943      |   |                     |   | (34,969    | )                        |   |   | (116,415 | ) |
| Future income tax recovery                                                           |   |                     | 879,680     |   |                     |   | 2,400,024  |                     |   |   | (168,826 | ) |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
|                                                                                 |   |                     | 894,623     |   |                     |   | 2,365,055  |                     |   |   | (285,241 | ) |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| (LOSS) INCOME AFTER INCOME TAXES                                                     |   |                     | (9,647,499  | )      |                     |   | 952,253    |                     |   |   | 493,110 |   |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| NON-CONTROLLING INTERESTS                                                            |   |                     | (443,565    | )      |                     |   | (369,883   | )                        |   |   | (477,103 | ) |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| NET (LOSS) INCOME                                                                    |   | $                        | (10,091,064 | )      |                     | $      | 582,370    |                     |   | $ | 16,007 |   |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| BASIC AND DILUTED (LOSS) EARNINGS PER COMMON SHARE                                   |   | $                        | (0.15       | )      |                     | $      | 0.01       |                     |   | $ | 0.00 |   |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| Basic                                                                                |   |                     | 67,229,127  |   |                     |   | 65,676,811 |                     |   |   | 61,258,923 |   |
| Diluted                                                                              |   |                     | 67,229,127  |   |                     |   | 66,017,145 |                     |   |   | 61,292,967 |   |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| COMPREHENSIVE (LOSS) INCOME                                                          |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| Net (loss) income                                                                    |   | $                        | (10,091,064 | )      |                     | $      | 582,370    |                     |   | $ | 16,007 |   |
| Other comprehensive (loss) income                                                    |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| Unrealized foreign exchange translation adjustments                                  |   |                     | (2,331      | )      |                     |   | (70,422    | )                        |   |   | (43,827 | ) |
| Reclassification of losses on available-for-sale financial assets included in income |   |                     | -           |   |                     |   | 39,574     |                     |   |   | - |   |
|                                                                                 |   |                     |        |   |                     |   |       |                     |   |   |   |   |
| Comprehensive (loss) income                                                          |   | $                        | (10,093,395 | )      |                     | $      | 551,522    |                     |   | $ | (27,820 | ) |

----

|                                                                          |   | Year EndedAugust 31,2011 |     |   | Year EndedAugust 31,2010 |   |     | Year EndedAugust 31,2009 |   |
|-------------------------------------------------------------------------------|--------|--------------------------|----------|--------|--------------------------|--------|----------|--------------------------|--------|
|                                                                          |   |                     |     |   |                     |   |     |                     |   |
| ACCUMULATED OTHER COMPREHENSIVE LOSS                                          |   |                     |     |   |                     |   |     |                     |   |
|                                                                          |   |                     |     |   |                     |   |     |                     |   |
| Balance, beginning of year                                                    |   | $                        | (471,573 | )      |                     | $      | (440,725 | )                        |   | $ | (396,898 | ) |
| Unrealized translation adjustments                                            |   |                     | (2,331   | )      |                     |   | (70,422  | )                        |   |   | (4,253 | ) |
| Decrease in fair value of available-for-sale financial assets                 |   |                     | -        |   |                     |   | -        |                     |   |   | (39,574 | ) |
| Reclassification of losses on available-for-sale financial assets to earnings |   |                     | -        |   |                     |   | 39,574   |                     |   |   | - |   |
|                                                                          |   |                     |     |   |                     |   |     |                     |   |   |   |   |
| Balance, end of year                                                          |   | $                        | (473,904 | )      |                     | $      | (471,573 | )                        |   | $ | (440,725 | ) |
|                                                                          |   |                     |     |   |                     |   |     |                     |   |   |   |   |
|                                                                          |   |                     |     |   |                     |   |     |                     |   |   |   |   |
| ENDING BALANCE OF ACCUMULATED OTHER COMPREHENSIVE LOSS IS COMPRISED OF:       |   |                     |     |   |                     |   |     |                     |   |   |   |   |
|                                                                          |   |                     |     |   |                     |   |     |                     |   |   |   |   |
| Unrealized translation adjustments                                            |   | $                        | (473,904 | )      |                     | $      | (471,573 | )                        |   | $ | (401,151 | ) |
| Change in fair value of available-for-sale financial assets                   |   |                     | -        |   |                     |   | -        |                     |   |   | (39,574 | ) |
|                                                                          |   |                     |     |   |                     |   |     |                     |   |   |   |   |
| Balance, end of year                                                          |   | $                        | (473,904 | )      |                     | $      | (471,573 | )                        |   | $ | (440,725 | ) |

----

|                                                                            |   | Share Capital |       |   |          |   |       |     |   |   |                |   |   | Accumulated     |      |   |                       |   |       |    |   |
|---------------------------------------------------------------------------------|--------|---------------|------------|--------|---------------|--------|------------|----------|--------|--------|---------------------|--------|--------|-----------------|-----------|--------|----------------------------|--------|------------|---------|--------|
|                                                                            |   | Number of     |       |   |          |   |       |     |   |   |                |   |   |            |      |   | Other                      |   |       |    |   |   |   |   |
|                                                                            |   | Common Shares |       |   | Dollar Amount |   |       | Warrants |   |   | Surplus Contributed |   |   | Shares Treasury |      |   | ComprehensiveIncome (loss) |   |       | Deficit |   |   | Total Equity |   |
| Balance, August 31, 2008                                                        |   |          | 64,109,297 |   |          | $      | 44,350,606 |     |   | $      | -                   |   |   | $               | 4,363,779 |   |                       | $      | (3,948,460 | )       |   | $ | (396,898 | ) |   | $ | (21,874,220 | ) |   | $ | 22,494,807 |   |
| Stock-based compensation                                                        |   |          | -          |   |          |   | -          |     |   |   | -                   |   |   |            | 581,098   |   |                       |   | -          |    |   |   | - |   |   |   | - |   |   |   | 581,098 |   |
| Purchase of treasury shares                                                     |   |          | -          |   |          |   | -          |     |   |   | -                   |   |   |            | -         |   |                       |   | (377,031   | )       |   |   | - |   |   |   | - |   |   |   | (377,031 | ) |
| Unrealized translation adjustments                                              |   |          | -          |   |          |   | -          |     |   |   | -                   |   |   |            | -         |   |                       |   | -          |    |   |   | (4,253 | ) |   |   | - |   |   |   | (4,253 | ) |
| Change in fair value of available-for-sale financial assets                     |   |          | -          |   |          |   | -          |     |   |   | -                   |   |   |            | -         |   |                       |   | -          |    |   |   | (39,574 | ) |   |   | - |   |   |   | (39,574 | ) |
| Charges on share purchase warrant extension                                     |   |          | -          |   |          |   | -          |     |   |   | 648,600             |   |   |            | -         |   |                       |   | -          |    |   |   | - |   |   |   | (648,600 | ) |   |   | - |   |
| Net income for the year                                                         |   |          | -          |   |          |   | -          |     |   |   | -                   |   |   |            | -         |   |                       |   | -          |    |   |   | - |   |   |   | 16,007 |   |   |   | 16,007 |   |
|                                                                            |   |          |       |   |          |   |       |     |   |   |                |   |   |            |      |   |                       |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 2009                                                        |   |          | 64,109,297 |   |          |   | 44,350,606 |     |   |   | 648,600             |   |   |            | 4,944,877 |   |                       |   | (4,325,491 | )       |   |   | (440,725 | ) |   |   | (22,506,813 | ) |   |   | 22,671,054 |   |
| Stock-based compensation                                                        |   |          | -          |   |          |   | -          |     |   |   | -                   |   |   |            | 232,626   |   |                       |   | -          |    |   |   | - |   |   |   | - |   |   |   | 232,626 |   |
| Reclassification of agent’s warrants                                      |   |          | -          |   |          |   | -          |     |   |   | 153,675             |   |   |            | (153,675  | )      |                       |   | -          |    |   |   | - |   |   |   | - |   |   |   | - |   |
| Purchase of treasury shares                                                     |   |          | -          |   |          |   | -          |     |   |   | -                   |   |   |            | -         |   |                       |   | (29,674    | )       |   |   | - |   |   |   | - |   |   |   | (29,674 | ) |
| Treasury shares sold during the year                                            |   |          | -          |   |          |   | -          |     |   |   | -                   |   |   |            | (501,267  | )      |                       |   | 1,081,375  |    |   |   | - |   |   |   | (280,108 | ) |   |   | 300,000 |   |
| Shares issued for private placement, net of issue costs of $206,270             |   |          | 4,726,714  |   |          |   | 3,039,430  |     |   |   | 63,000              |   |   |            | -         |   |                       |   | -          |    |   |   | - |   |   |   | - |   |   |   | 3,102,430 |   |
| Shares issued for cash by exercise of options                                   |   |          | 390,000    |   |          |   | 319,800    |     |   |   | -                   |   |   |            | (124,800  | )      |                       |   | -          |    |   |   | - |   |   |   | - |   |   |   | 195,000 |   |
| Warrants reclassified on expiry                                                 |   |          | -          |   |          |   | -          |     |   |   | (802,275            | )      |   |            | 802,275   |   |                       |   | -          |    |   |   | - |   |   |   | - |   |   |   | - |   |
| Unrealized translation adjustments                                              |   |          | -          |   |          |   | -          |     |   |   | -                   |   |   |            | -         |   |                       |   | -          |    |   |   | (70,422 | ) |   |   | - |   |   |   | (70,422 | ) |
| Reclassification of losses on available-for-sale financial assets to earnings   |   |          | -          |   |          |   | -          |     |   |   | -                   |   |   |            | -         |   |                       |   | -          |    |   |   | 39,574 |   |   |   | - |   |   |   | 39,574 |   |
| Net income for the year                                                         |   |          | -          |   |          |   | -          |     |   |   | -                   |   |   |            | -         |   |                       |   | -          |    |   |   | - |   |   |   | 582,370 |   |   |   | 582,370 |   |
|                                                                            |   |          |       |   |          |   |       |     |   |   |                |   |   |            |      |   |                       |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 2010                                                        |   |          | 69,226,011 |   |          |   | 47,709,836 |     |   |   | 63,000              |   |   |            | 5,200,036 |   |                       |   | (3,273,790 | )       |   |   | (471,573 | ) |   |   | (22,204,551 | ) |   |   | 27,022,958 |   |
| Stock-based compensation                                                        |   |          | -          |   |          |   | -          |     |   |   | -                   |   |   |            | 91,122    |   |                       |   | -          |    |   |   | - |   |   |   | - |   |   |   | 91,122 |   |
| Warrants reclassified on expiry                                                 |   |          | -          |   |          |   | -          |     |   |   | (63,000             | )      |   |            | 63,000    |   |                       |   | -          |    |   |   | - |   |   |   | - |   |   |   | - |   |
| Purchase of treasury shares                                                     |   |          | -          |   |          |   | -          |     |   |   | -                   |   |   |            | -         |   |                       |   | (30,265    | )       |   |   | - |   |   |   | - |   |   |   | (30,265 | ) |
| Unrealized translation adjustments                                              |   |          | -          |   |          |   | -          |     |   |   | -                   |   |   |            | -         |   |                       |   | -          |    |   |   | (2,331 | ) |   |   | - |   |   |   | (2,331 | ) |
| Shares and warrants issued for private placement, net of issue costs of $10,050 |   |          | 2,723,333  |   |          |   | 476,950    |     |   |   | 330,000             |   |   |            | -         |   |                       |   | -          |    |   |   | - |   |   |   | - |   |   |   | 806,950 |   |
|                                                                            |   |          |       |   |          |   |       |     |   |   |                |   |   |            |      |   |                       |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair value of agent’s warrants for private placement                      |   |          | -          |   |          |   | (4,020     | )        |   |   | 4,020               |   |   |            | -         |   |                       |   | -          |    |   |   | - |   |   |   | - |   |   |   | - |   |
| Net loss for the year                                                           |   |          | -          |   |          |   | -          |     |   |   | -                   |   |   |            | -         |   |                       |   | -          |    |   |   | - |   |   |   | (10,091,064 | ) |   |   | (10,091,064 | ) |
|                                                                            |   |          |       |   |          |   |       |     |   |   |                |   |   |            |      |   |                       |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, August 31, 2011                                                        |   |          | 71,949,344 |   |          | $      | 48,182,766 |     |   | $      | 334,020             |   |   | $               | 5,354,158 |   |                       | $      | (3,304,055 | )       |   | $ | (473,904 | ) |   | $ | (32,295,615 | ) |   | $ | 17,797,370 |   |

----

|                                                                          |   | Year EndedAugust 31, 2011 |        |    | Year EndedAugust 31, 2010 |   |       | Year EndedAugust 31, 2009 |   |
|-------------------------------------------------------------------------------|--------|---------------------------|-------------|---------|---------------------------|--------|------------|---------------------------|--------|
|                                                                          |   |                      |        |    |                      |   |       |                      |   |
| CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES                                |   |                      |        |    |                      |   |       |                      |   |
| Net (loss) income                                                             |   | $                         | (10,091,064 | )       |                      | $      | 582,370    |                      |   | $ | 16,007 |   |
| Adjusted for items not involving cash:                                        |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| - amortization of property, equipment and intangible assets                   |   |                      | 1,657,575   |    |                      |   | 1,537,277  |                      |   |   | 1,636,761 |   |
| - stock-based compensation                                                    |   |                      | 91,122      |    |                      |   | 232,626    |                      |   |   | 581,098 |   |
| - amortization of deferred curriculum costs                                   |   |                      | -           |    |                      |   | 295,903    |                      |   |   | 41,816 |   |
| - future income tax recovery                                                  |   |                      | (879,680    | )       |                      |   | (2,400,024 | )                         |   |   | 168,826 |   |
| - loss on disposal of assets, net                                             |   |                      | 39,656      |    |                      |   | 174,516    |                      |   |   | - |   |
| - impairment of marketable securities                                         |   |                      | 60,000      |    |                      |   | 127,229    |                      |   |   | - |   |
| - impairment of long-lived assets and goodwill                                |   |                      | 5,897,778   |    |                      |   | 2,000,000  |                      |   |   | - |   |
| - write-off of deferred offering costs                                        |   |                      | 510,711     |    |                      |   | 200,000    |                      |   |   | - |   |
| - non-controlling interests                                                   |   |                      | 443,565     |    |                      |   | 369,883    |                      |   |   | 477,103 |   |
|       - Advances from related parties           |   |                      | (58,819     | )  |                      |   | -          |                      |   |   | - |   |
| Net changes in non-cash working capital items (Note 22)                       |   |                      | (1,251,979  | )       |                      |   | (1,091,831 | )                         |   |   | (591,716 | ) |
|                                                                          |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| NET CASH FROM (USED IN) OPERATING ACTIVITIES                                  |   |                      | (3,581,135  | )       |                      |   | 2,027,949  |                      |   |   | 2,329,895 |   |
|                                                                          |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES                                |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| Purchases of property and equipment                                           |   |                      | (488,247    | )       |                      |   | (672,645   | )                         |   |   | (753,097 | ) |
| Acquisition of net assets of business entities, net of cash acquired (Note 3) |   |                      | (50,000     | )       |                      |   | (4,973,148 | )                         |   |   | (675,434 | ) |
| Curriculum development costs                                                  |   |                      | (65,041     | )       |                      |   | (106,454   | )                         |   |   | (138,543 | ) |
| Restricted cash                                                               |   |                      | (250,000    | )       |                      |   | -          |                      |   |   | - |   |
| Disposal of controlling interest in AIMI, net of cash received (Note 3(b))    |   |                      | -           |    |                      |   | -          |                      |   |   | (401,980 | ) |
|                                                                          |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| NET CASH USED IN INVESTING ACTIVITIES                                         |   |                      | (853,288    | )       |                      |   | (5,752,247 | )                         |   |   | (1,969,054 | ) |
|                                                                          |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES                                |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| Proceeds from issuance of shares and warrants, net of issue costs             |   |                      | 806,950     |    |                      |   | 3,297,430  |                      |   |   | - |   |
| Purchase of treasury shares                                                   |   |                      | (30,265     | )       |                      |   | (29,674    | )                         |   |   | (377,031 | ) |
| Advances to related parties                                                   |   |                      | 43,721      |    |                      |   | 19         |                      |   |   | (82,919 | ) |
| Non-controlling interest draws                                                |   |                      | (505,934    | )       |                      |   | (217,434   | )                         |   |   | (60,000 | ) |
| Capital Lease obligation repayments                                           |   |                      | (105,753    | )       |                      |   | (85,190    | )                         |   |   | (56,939 | ) |
| Loan principal repayments                                                     |   |                      | (607,164    | )       |                      |   | (432,551   | )                         |   |   | (366,990 | ) |
| Loan principal advances                                                       |   |                      | -           |    |                      |   | 3,000,000  |                      |   |   | - |   |
| Deferred offering costs                                                       |   |                      | (171,820    | )       |                      |   | (538,891   | )                         |   |   | - |   |
|                                                                          |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| NET CASH FROM (USED IN) FINANCING ACTIVITIES                                  |   |                      | (570,265    | )       |                      |   | 4,993,709  |                      |   |   | (943,879 | )  |
|                                                                          |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS                  |   |                      | (50,579     | )       |                      |   | (94,704    | )                         |   |   | (12,571 | ) |
|                                                                          |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| NET (DECREASE) INCREASE IN CASH                                               |   |                      | (5,055,267  | )       |                      |   | 1,174,707  |                      |   |   | (595,609 | )  |
|                                                                          |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                  |   |                      | 11,511,835  |    |                      |   | 10,337,128 |                      |   |   | 10,932,737 |   |
|                                                                          |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| CASH AND CASH EQUIVALENTS, END OF YEAR                                        |   | $                         | 6,456,568   |    |                      | $      | 11,511,835 |                      |   | $ | 10,337,128 |   |
|                                                                          |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| CASH AND CASH EQUIVALENTS:                                                    |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| Cash in bank                                                                  |   | $                         | 5,381,795   |    |                      | $      | 10,893,807 |                      |   | $ | 9,587,586 |   |
| Term deposits                                                                 |   |                      | 1,074,773   |    |                      |   | 618,028    |                      |   |   | 749,542 |   |
|                                                                          |   |                      |        |    |                      |   |       |                      |   |   |   |   |
|                                                                          |   | $                         | 6,456,568   |    |                      | $      | 11,511,835 |                      |   | $ | 10,337,128 |   |
|                                                                          |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| SUPPLEMENTAL CASH FLOW INFORMATION:                                           |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| Interest paid                                                                 |   | $                         | 164,896     |    |                      | $      | 71,937     |                      |   | $ | 49,237 |   |
| Income taxes paid                                                             |   | $                         | 14,549      |    |                      | $      | 8,139      |                      |   | $ | 31,198 |   |

----

----

----

----

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----

----

| ●   | Leasehold improvements – straight-line over the lesser of five years and remaining lease term; |
|---------------------|------------------------------------------------------------------------------------------------------|

| ●   | Furniture and equipment – 20% declining balance; |
|---------------------|--------------------------------------------------------|

| ●   | Computer equipment – 20% - 30% declining balance. |
|---------------------|---------------------------------------------------------|

----

----

----

| (a)  | Educational programs and services |
|-----------|-----------------------------------|

|   | The educational programs and services consist of tuition fee (net of discounts) on course offerings by CIBT, SSDC and KGIC. Tuition is generally paid in advance and is initially recorded as deferred revenue. Tuition revenue for educational programs and services is recognized proportionately as the instructions are delivered, and is reported net of scholarships, business taxes and related surcharges, and tuition refunds. Students are entitled to a short term course trial period which commences on the date the course begins. Tuition refunds are provided to students if they decide within the trial period that they no longer want to take the course. Tuition refunds have been insignificant in fiscal years. After the trial period, if a student withdraws from a class, usually no refunds will be provided and any collected but unearned portion of the fee is recognized at that time. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)  | Revenue sharing arrangement with education service providers |
|-----------|--------------------------------------------------------------|

|   | One of the Company’s subsidiaries, CIBT, has entered into numerous educational delivery agreements with various educational service providers whereby a portion of the tuition fees, net of discounts, are paid to these educational service providers for the provision of facilities and/or teaching staff. For the majority of these revenue sharing arrangements, CIBT is considered the primary obligor and accordingly records the tuition fee revenues on a gross basis and the portion paid to the educational service providers is included in direct educational costs. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| Balance sheet item                       | Classification        | Measurement basis |
|------------------------------------------|-----------------------|-------------------|
|                                     |                  |              |
| Cash and cash equivalents                | Held-for-trading      | Fair value        |
| Restricted cash                          | Held-for-trading      | Fair value        |
| Marketable securities                    | Available-for-sale    | Fair value        |
| Accounts receivable                      | Loans and receivables | Amortized cost    |
| Due from related parties                 | Loans and receivables | Amortized cost    |
| Accounts payable and accrued liabilities | Other liabilities     | Amortized cost    |
| Long-term debt                           | Other liabilities     | Amortized cost    |
| Due to related parties                   | Other liabilities     | Amortized cost    |

| ●   | For financial assets or liabilities classified as held for trading, all transaction costs are immediately charged to operations. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------|

| ●   | For all other financial assets or liabilities, all transactions costs are added to the carrying amount on initial classification. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------|

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----

----

| Subsidiary / division                                  |   | Non-controlling interest % |   |
|--------------------------------------------------------|--------|----------------------------|--------|
|                                                   |   |                       |   |
| Beihai College                                         |   |                       | 40.00  | % |
| Sprott-Shaw Degree College Corp. – Surrey Campus |   |                       | 33.33  | % |
| Irix Design Group Inc.                                 |   |                       | 49.00  | % |
|                                                   |   |                       |   |   |

----

----

----

----

| (a)   | up to $958,905 in cash if the net revenue of the KGIC Business exceeds $16,109,588 and the EBITDA of the KGIC Business exceeds $1,284,930 for the period March 16, 2010 to February 28, 2011, such amount to be calculated according to a formula which is based upon the excess; |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | up to $958,905 in value of the Company’s shares if the net revenue of the KGIC Business exceeds $16,109,588 and the EBITDA of the KGIC Business exceeds $1,284,930 for the period March 16, 2010 to February 28, 2011, such amount to be calculated according to a formula which is based upon the excess; |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | up to $1,000,000 in cash if the net revenue of the KGIC Business exceeds $18,200,000 and the EBITDA of the KGIC Business exceeds $2,000,000 for the period March 1, 2011 to February 29, 2012, such amount to be calculated according to a formula which is based upon the excess; and |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | up to $1,000,000 in cash if the net revenue of the KGIC Business exceeds $23,000,000 and the EBITDA of the KGIC Business exceeds $3,450,000 for the period March 1, 2012 to February 28, 2013, such amount to be calculated according to a formula which is based upon the excess. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                          |   | Fair Value ofAssets Acquired |       |
|-----------------------------------------------|--------|------------------------------|------------|
|                                          |   |                         |       |
| Cash                                          |   | $                            | 19,744     |   |
| Accounts receivable                           |   |                         | 809,750    |   |
| Inventory                                     |   |                         | 110,620    |   |
| Prepaids and other current assets             |   |                         | 258,872    |   |
| Property and equipment                        |   |                         | 352,089    |   |
| Intangible assets subject to amortization     |   |                         | 1,610,000  |   |
| Intangible assets not subject to amortization |   |                         | 1,230,000  |   |
| Goodwill                                      |   |                         | 3,542,488  |   |
| Accounts payable and accrued liabilities      |   |                         | (361,562   | ) |
| Deferred revenue                              |   |                         | (3,475,442 | ) |
|                                          |   |                         |       |   |
| Net assets acquired equal to purchase price   |   | $                            | 4,096,559  |   |

| Consideration comprised of: |   |   |      |
|-----------------------------|--------|--------|-----------|
| Cash                        |   | $      | 3,817,497 |   |
| Acquisition costs           |   |   | 279,062   |   |
|                        |   |   |      |   |
| Total consideration         |   | $      | 4,096,559 |   |

----

----

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|                                      |   | August 31,2011 |      |   | August 31,2010 |   |
|-------------------------------------------|--------|----------------|-----------|--------|----------------|--------|
|                                      |   |           |      |   |           |   |
| Trade receivables                         |   | $              | 9,427,911 |   |           | $      | 10,759,227 |   |
| Less: allowance for bad debts             |   |           | (914,358  | )      |           |   | (451,691 | ) |
| KGIC purchase price adjustment receivable |   |           | -         |   |           |   | 700,000 |   |
| Other                                     |   |           | -         |   |           |   | 216,358 |   |
|                                      |   |           |      |   |           |   |   |   |
|                                      |   | $              | 8,513,553 |   |           | $      | 11,223,894 |   |

|                        |   | August 31,2011 |       |   | August 31,2010 |   |
|-----------------------------|--------|----------------|------------|--------|----------------|--------|
|                        |   |           |       |   |           |   |
| Beginning balance           |   | $              | (451,691   | )      |           | $      | (371,430 | ) |
| Charge during the year      |   |           | (1,243,943 | )      |           |   | (778,569 | ) |
| Written-off during the year |   |           | 781,276    |   |           |   | 698,308 |   |
|                        |   |           |       |   |           |   |   |   |
| Ending balance              |   | $              | (914,358   | )      |           | $      | (451,691 | ) |

----

----

----

|                          |   | August 31, 2011    |      |   | August 31, 2010   |   |
|-------------------------------|--------|--------------------|-----------|--------|-------------------|--------|
|                          |   | Number of Shares   |      |   | Carrying Value    |   |   | Number of Shares |   |   | Carrying Value |   |
|                          |   |               |      |   |              |   |   |   |   |   |   |   |
| Available-for-sale securities |   |               | 5,862,824 |   |              | $      | - |   |   |   | 5,862,824 |   |   | $ | 60,000 |   |
|                          |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |               | 5,862,824 |   |              | $      | - |   |   |   | 5,862,824 |   |   | $ | 60,000 |   |
|                          |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Market price                  |   | US$0.00 per share* |      |   | US$0.01 per share |   |

----

|                                        |   | August 31, 2011 |    |   | August 31, 2010 |   |
|---------------------------------------------|--------|-----------------|---------|--------|-----------------|--------|
|                                        |   |            |    |   |            |   |
| Prepaid expenses and deposits               |   | $               | 739,231 |   |            | $      | 1,087,743 |   |
| Tuition fees held by Far Eastern University |   |            | 24,238  |   |            |   | 109,343 |   |
|                                        |   |            |    |   |            |   |   |   |
|                                        |   | $               | 763,469 |   |            | $      | 1,197,086 |   |

----

|                                                     |   | August 31, 2011 |       |   | August 31, 2010 |   |
|----------------------------------------------------------|--------|-----------------|------------|--------|-----------------|--------|
|                                                     |   |            |       |   |            |   |
| Furniture and equipment                                  |   | $               | 3,463,814  |   |            | $      | 3,725,295 |   |
| Leasehold improvements                                   |   |            | 1,827,167  |   |            |   | 2,805,483 |   |
| Equipment under capital lease                            |   |            | 562,096    |   |            |   | 524,524 |   |
|                                                     |   |            |       |   |            |   |   |   |
|                                                     |   |            | 5,853,077  |   |            |   | 7,055,302 |   |
|                                                     |   |            |       |   |            |   |   |   |
| Accumulated amortization - furniture and equipment       |   |            | (1,846,620 | )      |            |   | (1,795,625 | ) |
| Accumulated amortization - leasehold improvements        |   |            | (1,150,592 | )      |            |   | (1,634,967 | ) |
| Accumulated amortization - equipment under capital lease |   |            | (224,047   | )      |            |   | (205,857 | ) |
|                                                     |   |            |       |   |            |   |   |   |
|                                                     |   |            | (3,221,259 | )      |            |   | (3,636,449 | ) |
|                                                     |   |            |       |   |            |   |   |   |
|                                                     |   | $               | 2,631,818  |   |            | $      | 3,418,853 |   |

----

----

----

|     |   | Straight-line Basis |   |         | Declining Balance Basis |                   |
|----------|--------|---------------------|--------|--------------|-------------------------|------------------------|
|     |   |                |   |         |                    |                   |
|     |   | Amortization        |   |  Length |                    | Residual Buyout Amount |   |   | Amortization |   |   | Declining Rate |   |   | Residual Buyout Amount |   |
|     |   |                |   |         |                    |                   |   |   |   |   |   |   |   |   |   |   |
| IRIX (a) |   | $                   | 88,213 |         | 60 months               |                   | $ | 44,341 |   |   | $ | 21,300 |   |   |   | 20 | % |   | $ | 2 |   |
| SSDC (b) |   |                |   |         |                    |                   |   |   |   |   | $ | 408,243 |   |   |   | 20 | % |   | $ | 1,500 |   |

| a)   | Included in accumulated amortization as at August 31, 2011 is $24,717 (2010:  $78,599; 2009:  $60,353) relating to equipment under capital leases. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | Included in amortization expense for the current period is $60,075 (2010:  $72,540; 2009:  $58,131) relating to equipment under capital leases and included in accumulated amortization as at August 31, 2011 is $199,330 (2010:  $127,258; 2009:  $106,082) relating to equipment under capital leases. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                   |   |   |      |   | August 31, 2011 |   |       |     |   |
|----------------------------------------|--------|--------|-----------|--------|-----------------|--------|------------|----------|--------|
| Amounts                                |   |   |      |   | Accumulated     |   |       | Carrying |   |
|                                   |   | Cost   |      |   | Amortization    |   |       | Value    |   |
|                                   |   |   |      |   |            |   |       |     |   |
| Intangible assets with finite life     |   |   |      |   |            |   |       |     |   |
|                                   |   |   |      |   |            |   |       |     |   |
| Beginning balance                      |   | $      | 5,529,047 |   |            | $      | (2,238,270 | )        |   | $ | 3,290,777 |   |
|                                   |   |   |      |   |            |   |       |     |   |   |   |   |
| Additions during the current year      |   |   | 65,041    |   |            |   | (467,178   | )        |   |   | (402,137 | ) |
| Foreign exchange adjustments           |   |   | (3,226    | )      |            |   | 791        |     |   |   | (2,435 | ) |
|                                   |   |   |      |   |            |   |       |     |   |   |   |   |
| Ending balance                         |   | $      | 5,590,862 |   |            | $      | (2,704,657 | )        |   |   | 2,886,205 |   |
|                                   |   |   |      |   |            |   |       |     |   |   |   |   |
| Intangible assets with indefinite life |   |   |      |   |            |   |       |     |   |   |   |   |
|                                   |   |   |      |   |            |   |       |     |   |   |   |   |
| Beginning balance                      |   |   |      |   |            |   |       |     |   |   | 11,534,340 |   |
|                                   |   |   |      |   |            |   |       |     |   |   |   |   |
| Impairments during the current year    |   |   |      |   |            |   |       |     |   |   | (3,481,347 | ) |
|                                   |   |   |      |   |            |   |       |     |   |   |   |   |
| Ending balance                         |   |   |      |   |            |   |       |     |   |   | 8,052,993 |   |
|                                   |   |   |      |   |            |   |       |     |   |   |   |   |
| Total intangible assets                |   |   |      |   |            |   |       |     |   | $ | 10,939,198 |   |

|                                   |   |   |      |   | August 31, 2010 |   |       |     |   |
|----------------------------------------|--------|--------|-----------|--------|-----------------|--------|------------|----------|--------|
| Amounts                                |   |   |      |   | Accumulated     |   |       | Carrying |   |
|                                   |   | Cost   |      |   | Amortization    |   |       | Value    |   |
|                                   |   |   |      |   |            |   |       |     |   |
| Intangible assets with finite life     |   |   |      |   |            |   |       |     |   |
|                                   |   |   |      |   |            |   |       |     |   |
| Beginning balance                      |   | $      | 4,323,588 |   |            | $      | (1,837,909 | )        |   | $ | 2,485,679 |   |
|                                   |   |   |      |   |            |   |       |     |   |   |   |   |
| Additions during the current year      |   |   | 1,230,000 |   |            |   | (406,022   | )        |   |   | 823,978 |   |
| Foreign exchange adjustments           |   |   | (24,541   | )      |            |   | 5,661      |     |   |   | (18,880 | ) |
|                                   |   |   |      |   |            |   |       |     |   |   |   |   |
| Ending balance                         |   | $      | 5,529,047 |   |            | $      | (2,238,270 | )        |   |   | 3,290,777 |   |
|                                   |   |   |      |   |            |   |       |     |   |   |   |   |
| Intangible assets with indefinite life |   |   |      |   |            |   |       |     |   |   |   |   |
|                                   |   |   |      |   |            |   |       |     |   |   |   |   |
| Beginning balance                      |   |   |      |   |            |   |       |     |   |   | 11,924,340 |   |
|                                   |   |   |      |   |            |   |       |     |   |   |   |   |
| Additions during the current year      |   |   |      |   |            |   |       |     |   |   | 1,610,000 |   |
| Impairments during the current year    |   |   |      |   |            |   |       |     |   |   | (2,000,000 | ) |
|                                   |   |   |      |   |            |   |       |     |   |   |   |   |
| Ending balance                         |   |   |      |   |            |   |       |     |   |   | 11,534,340 |   |
|                                   |   |   |      |   |            |   |       |     |   |   |   |   |
| Total intangible assets                |   |   |      |   |            |   |       |     |   | $ | 14,825,117 |   |

----

----

----

|                                                 |   | August 31, 2011 |      |
|------------------------------------------------------|--------|-----------------|-----------|
| Amounts                                              |   |            |      |   | Accumulated |   |   | Carrying |   |
|                                                 |   | Cost            |      |   | Amortization |   |   | Value |   |
|                                                 |   |            |      |   |   |   |   |   |   |
| Intangible assets with finite life                   |   |            |      |   |   |   |   |   |   |
|                                                 |   |            |      |   |   |   |   |   |   |
| Agreements and contracts – curriculum access   |   | $               | 348,333   |   |   | $ | (267,966 | ) |   | $ | 80,367 |   |
| Acquired curriculum                                  |   |            | 2,912,000 |   |   |   | (624,000 | ) |   |   | 2,288,000 |   |
| Internally developed curriculum                      |   |            | 65,041    |   |   |   | (550 | ) |   |   | 64,491 |   |
| Foreign university cooperative agreements and others |   |            | 2,265,488 |   |   |   | (1,812,141 | ) |   |   | 453,347 |   |
|                                                 |   |            |      |   |   |   |   |   |   |   |   |   |
|                                                 |   | $               | 5,590,862 |   |   | $ | (2,704,657 | ) |   | $ | 2,886,205 |   |
|                                                 |   |            |      |   |   |   |   |   |   |   |   |   |
| Intangible assets with indefinite life               |   |            |      |   |   |   |   |   |   |   |   |   |
|                                                 |   |            |      |   |   |   |   |   |   |   |   |   |
| Accreditations and registrations                     |   |            |      |   |   |   |   |   |   | $ | 2,706,000 |   |
| Brand and trade names                                |   |            |      |   |   |   |   |   |   |   | 4,886,000 |   |
| Chinese university agreements and contracts          |   |            |      |   |   |   |   |   |   |   | 460,993 |   |
|                                                 |   |            |      |   |   |   |   |   |   |   |   |   |
|                                                 |   |            |      |   |   |   |   |   |   | $ | 8,052,993 |   |
|                                                 |   |            |      |   |   |   |   |   |   |   |   |   |
| Total intangible assets                              |   |            |      |   |   |   |   |   |   | $ | 10,939,198 |   |

|                                                 |   | August 31, 2010 |      |
|------------------------------------------------------|--------|-----------------|-----------|
| Amounts                                              |   |            |      |   | Accumulated |   |   | Carrying |   |
|                                                 |   | Cost            |      |   | Amortization |   |   | Value |   |
|                                                 |   |            |      |   |   |   |   |   |   |
| Intangible assets subject with finite life           |   |            |      |   |   |   |   |   |   |
|                                                 |   |            |      |   |   |   |   |   |   |
| Agreements and contracts – curriculum access   |   | $               | 348,333   |   |   | $ | (203,813 | ) |   | $ | 144,520 |   |
| Internally developed curriculum                      |   |            | 2,912,000 |   |   |   | (400,800 | ) |   |   | 2,511,200 |   |
| Foreign university cooperative agreements and others |   |            | 2,268,714 |   |   |   | (1,633,657 | ) |   |   | 635,057 |   |
|                                                 |   |            |      |   |   |   |   |   |   |   |   |   |
|                                                 |   | $               | 5,529,047 |   |   | $ | (2,238,270 | ) |   | $ | 3,290,777 |   |
|                                                 |   |            |      |   |   |   |   |   |   |   |   |   |
| Intangible assets with indefinite life               |   |            |      |   |   |   |   |   |   |   |   |   |
|                                                 |   |            |      |   |   |   |   |   |   |   |   |   |
| Accreditations and registrations                     |   |            |      |   |   |   |   |   |   | $ | 2,706,000 |   |
| Brand and trade names                                |   |            |      |   |   |   |   |   |   |   | 4,886,000 |   |
| Chinese university agreements and contracts          |   |            |      |   |   |   |   |   |   |   | 3,942,340 |   |
|                                                 |   |            |      |   |   |   |   |   |   |   |   |   |
|                                                 |   |            |      |   |   |   |   |   |   | $ | 11,534,340 |   |
|                                                 |   |            |      |   |   |   |   |   |   |   |   |   |
| Total intangible assets                              |   |            |      |   |   |   |   |   |   | $ | 14,825,117 |   |

----

----

----

----

|                        |   | August 31, 2011 |       |   | August 31, 2010 |   |
|-----------------------------|--------|-----------------|------------|--------|-----------------|--------|
|                        |   |            |       |   |            |   |
| Beginning balance           |   | $               | 10,999,696 |   |            | $      | 7,010,875 |   |
| Additions during the year   |   |            | -          |   |            |   | 3,988,821 |   |
| Impairments during the year |   |            | (2,287,905 | )      |            |   | - |   |
|                        |   |            |       |   |            |   |   |   |
| Ending balance              |   | $               | 8,711,791  |   |            | $      | 10,999,696 |   |

----

|                      |   | August 31, 2011 |     |   | August 31, 2010 |   |
|---------------------------|--------|-----------------|----------|--------|-----------------|--------|
|                      |   |            |     |   |            |   |
| Beginning balance         |   | $               | 400,252  |   |            | $      | - |   |
| Additions during the year |   |            | 110,459  |   |            |   | 600,252 |   |
| Expensed during the year  |   |            | (510,711 | )      |            |   | (200,000 | ) |
|                      |   |            |     |   |            |   |   |   |
| Ending balance            |   | $               | -        |   |            | $      | 400,252 |   |

----

----

----

|                            |   | August 31, 2011 |      |   | August 31, 2010 |   |
|---------------------------------|--------|-----------------|-----------|--------|-----------------|--------|
|                            |   |            |      |   |            |   |
| Trade accounts payable          |   | $               | 2,554,757 |   |            | $      | 2,704,039 |   |
| Payroll and related liabilities |   |            | 1,509,262 |   |            |   | 1,579,398 |   |
| Purchase price payable          |   |            | -         |   |            |   | 436,333 |   |
| Tuition fees and grants payable |   |            | 215,518   |   |            |   | 74,017 |   |
| Others                          |   |            | 204,999   |   |            |   | 213,400 |   |
|                            |   |            |      |   |            |   |   |   |
|                            |   | $               | 4,484,536 |   |            | $      | 5,007,187 |   |

----

| Demand term instalment loan, payable in monthly instalments of $50,000 plus interest at the prime rate plus 2% |   | $      | 2,750,000  |   |
|----------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|
| Promissory note payable at $460 per month including interest at 8.5% per annum, unsecured, due October 2013    |   |   | 39,013     |   |
| Promissory note payable at $505 per month including interest at 8% per annum, unsecured, due June 2011         |   |   | 4,875      |   |
|                                                                                                           |   |   | 2,793,888  |   |
| Less: current portion                                                                                          |   |   | (2,757,164 | )      |
|                                                                                                           |   |   |       |   |
| Balance at August 31, 2010                                                                                     |   | $      | 36,724     |   |
|                                                                                                           |   |   |       |   |
| Demand term instalment loan, payable in monthly instalments of $50,000 plus interest at the prime rate plus 2% |   | $      | 2,150,000  |   |
|                                                                                                           |   |   |       |   |
| Promissory note payable at $460 per month including interest at 8.5% per annum, unsecured, due October 2013    |   |   | 36,724     |   |
|                                                                                                           |   |   |       |   |
|                                                                                                           |   |   | 2,186,724  |   |
| Less: current portion                                                                                          |   |   | (2,152,492 | )      |
|                                                                                                           |   |   |       |   |
| Balance at August 31, 2011                                                                                     |   | $      | 34,232     |   |

| ●   | first priority security interest in the assets of SSDC |
|---------------------|--------------------------------------------------------|

| ●   | assignment of fire and perils insurance on the property of SSDC |
|---------------------|-----------------------------------------------------------------|

| ●   | guarantee from KGIC on the bank indebtedness of SSDC |
|---------------------|------------------------------------------------------|

| ●   | postponement of claims from the Company on advances to SSDC |
|---------------------|-------------------------------------------------------------|

| ●   | the senior debt to earnings before interest, taxes, depreciation and amortization not to exceed 1.75 to 1.0 at any time |
|---------------------|-------------------------------------------------------------------------------------------------------------------------|

| ●   | the adjusted current ratio is not less than 1.75 to 1.0 at any time |
|---------------------|---------------------------------------------------------------------|

| ●   | the adjusted fixed charge coverage ratio is not less than 1.2 to 1.0 at any time |
|---------------------|----------------------------------------------------------------------------------|

----

----

----

| For the years ending August 31, | 2012   |   | $      | 552,492   |   |
|---------------------------------|--------|--------|--------|-----------|--------|
|                            | 2013   |   |   | 602,712   |   |
|                            | 2014   |   |   | 631,520   |   |
|                            | 2015   |   |   | 400,000   |   |
|                            | 2016   |   |   | -         |   |
|                            |   |   |   |      |   |
|                            |   |   | $      | 2,186,724 |   |

| For the years ending August 31,    | 2012   |   | $      | 133,068  |   |
|------------------------------------|--------|--------|--------|----------|--------|
|                               | 2013   |   |   | 107,227  |   |
|                               | 2014   |   |   | 101,963  |   |
|                               | 2015   |   |   | 27,836   |   |
|                               | 2016   |   |   | 52,819   |   |
|                               |   |   |   |     |   |
|                               |   |   |   | 422,913  |   |
| Less: amount representing interest |   |   |   | (72,016  | )      |
|                               |   |   |   |     |   |
|                               |   |   |   | 350,897  |   |
| Less: current portion              |   |   |   | (101,765 | )      |
|                               |   |   |   |     |   |
|                               |   |   | $      | 249,132  |   |

----

|                                                           |   | Number |       |   | Value  |   |
|----------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Issued and outstanding                                         |   |   |       |   |   |   |
|                                                           |   |   |       |   |   |   |
| Balance at August 31, 2009                                     |   |   | 64,109,297 |   |   | $      | 44,350,606 |   |
|                                                           |   |   |       |   |   |   |   |   |
| - for private placement at $0.70 per share                     |   |   | 4,726,714  |   |   |   | 3,308,700 |   |
| - fees and commissions for private placement                   |   |   | -          |   |   |   | (206,270 | ) |
| - fair value of agent’s warrants for private placement   |   |   | -          |   |   |   | (63,000 | ) |
| - for cash by exercise of options at $0.50 per share           |   |   | 390,000    |   |   |   | 195,000 |   |
| - contributed surplus reallocated on exercise of stock options |   |   | -          |   |   |   | 124,800 |   |
|                                                           |   |   |       |   |   |   |   |   |
| Balance at August 31, 2010                                     |   |   | 69,226,011 |   |   |   | 47,709,836 |   |
|                                                           |   |   |       |   |   |   |   |   |
| - for private placement at $0.30 per share                     |   |   | 2,723,333  |   |   |   | 817,000 |   |
| - fees and commissions for private placement                   |   |   | -          |   |   |   | (10,050 | ) |
| - fair value of warrants for private placement                 |   |   | -          |   |   |   | (330,000 | ) |
| - fair value of agent’s warrants for private placement   |   |   | -          |   |   |   | (4,020 | ) |
|                                                           |   |   |       |   |   |   |   |   |
| Balance at August 31, 2011                                     |   |   | 71,949,344 |   |   | $      | 48,182,766 |   |

----

----

----

|                     | Number of Warrants | Weighted Average Exercise Price ($) | Weighted Average Remaining Life |
|--------------------------|--------------------|-------------------------------------|---------------------------------|
|                     |               |                                |                            |
| Balance, August 31, 2009 | 5,211,919     | 1.43                                | 0.38 years                      |
|                     |               |                                |                            |
| - warrants issued        | 210,000       | 0.70                                |                            |
| - warrants expired       | (5,211,919)        | 1.43                                |                            |
|                     |               |                                |                            |
| Balance, August 31, 2010 | 210,000       | 0.70                                | 0.18 years                      |
|                     |               |                                |                            |
| - warrants issued        | 2,756,833     | 0.35                                |                            |
| - warrants expired       | (210,000)          | 0.70                                |                            |
|                     |               |                                |                            |
| Balance, August 31, 2011 | 2,756,833     | 0.35                                | 2.84 years                      |

----

----

----

|  Number of Warrants |  Exercise Price |  Expiry Date | RemainingContractual Life |
|--------------------------|----------------------|-------------------|---------------------------|
|                     |                 |              |                      |
| 1,723,500                | $0.35                | June 29, 2014     | 2.83 years                |
| 1,033,333                | $0.35                | July 11, 2014     | 2.86 years                |
|                     |                 |              |                      |
| 2,756,833                |                 |              |                      |

|                    | August 31, 2011 | August 31, 2010 | August 31, 2009 |
|-------------------------|-----------------|-----------------|-----------------|
|                    |            |            |            |
| Exercise price          | $0.35           | $0.70           | $1.43           |
| Expected dividend yield | 0.00%           | 0.00%           | 0.00%           |
| Expected volatility     | 79.6%           | 82.9%           | 42.8%           |
| Risk-free interest rate | 1.86%           | 0.57%           | 3.64%           |
| Expected life           | 3 years         | 1 year          | 2 years         |

| ●   | The term of any options granted under the Plan is fixed by the board of directors at the time the options are granted, to a maximum term of five years. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | The exercise price of any options granted under the Plan is determined by the board of directors, but shall not be less than the last closing price on the TSX Exchange of the Company’s common shares preceding the grant of such options, less any permitted discount. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Unless otherwise imposed by the board of directors, no vesting requirement applies to options granted under the Plan but a four month hold period, commencing from the date of grant of an option, applies to all shares issued upon exercise of an option. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | All options granted under the Plan are non-assignable and non-transferable. |
|---------------------|-----------------------------------------------------------------------------|

| ●   | If an option holder ceases to hold a position with the Company in which the option holder would be eligible to be granted an option (other than by reason of death), then the option granted shall expire on the 30th day following the date that the option holder ceases to hold any such position. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                | Number of Options | Weighted Average Exercise Price ($) | Weighted Average Remaining Life |
|-------------------------------------|-------------------|-------------------------------------|---------------------------------|
| Balance, August 31,2008             | 4,535,000         | 1.18                                | 2.57 years                      |
| - options granted during the year   | 210,000           | 0.51                                |                            |
| - options expired during the year   | (495,000)         | 1.00                                |                            |
|                                |              |                                |                            |
| Balance, August 31, 2009            | 4,250,000    | 1.17                                | 1.87 years                      |
|                                |              |                                |                            |
| - options granted during the year   | 130,000      | 0.72                                |                            |
| - options expired during the year   | (25,000)          | 0.50                                |                            |
| - options exercised during the year | (390,000)         | 0.50                                |                            |
|                                |              |                                |                            |
| Balance, August 31, 2010            | 3,965,000    | 1.22                                | 1.10 years                      |
|                                |              |                                |                            |
| - options granted during the year   | 1,365,000    | 0.43                                |                            |
| - options expired during the year   | (2,465,000)       | 1.16                                |                            |
|                                |              |                                |                            |
| Balance, August 31, 2011            | 2,865,000    | 0.91                                | 2.49 years                      |

|  Number of Options |  Exercise Price |  Expiry Date | RemainingContractual Life |
|-------------------------|----------------------|-------------------|---------------------------|
|                    |                 |              |                      |
| 190,000                 | $0.51                | January 21, 2012  | 0.39 years                |
| 1,200,000               | $1.53                | June 21, 2012     | 0.81 years                |
| 60,000                  | $0.80                | May 2, 2013       | 1.67 years                |
| 50,000                  | $0.60                | August 8, 2013    | 1.94 years                |
| 100,000                 | $0.54                | October 13, 2013  | 2.12 years                |
| 1,265,000               | $0.42                | March 1, 2016     | 4.50 years                |
|                    |                 |              |                      |
| 2,865,000               | $0.91 Average Price  |              |                      |

|             | Shares Granted | Per Share Price | Fair Value | Vesting Period                                                  |
|------------------|----------------|-----------------|------------|-----------------------------------------------------------------|
|             |           |            |       |                                                            |
| May 3, 2010      | 80,000         | $0.80           | $32,000    | Vesting on grant date                                           |
|             |           |            |       |                                                            |
| August 9, 2011   | 50,000         | $0.60           | $15,000    | Vesting on grant date                                           |
|             |           |            |       |                                                            |
| October 14, 2010 | 100,000        | $0.54           | $26,000    | 20% vesting on grant and 20% at end of 12, 24, 36 and 48 months |
|             |           |            |       |                                                            |
| March 1, 2011    | 1,265,000      | $0.42           | $278,300   | 20% vesting on grant and 20% at end of 12, 24, 36 and 48 months |

| Black-Scholes Weighted Average Assumptions | August 31, 2011 | August 31, 2010 | August 31, 2009 |
|--------------------------------------------|-----------------|-----------------|-----------------|
|                                       |            |            |            |
| Expected life                              | 4.85 years      | 3.00 years      | 3,00 years      |
| Risk-free interest rate                    | 2.52%           | 2.11%           | 1.385           |
| Expected dividend yield                    | 0.00%           | 0.00%           | 0.00%           |
| Expected volatility                        | 66.99%          | 75.33%          | 75.00%          |

----

----

----

|                                                   |   | Number |      |   | Value  |   |
|--------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                   |   |   |      |   |   |   |
| Balance, August 31, 2009                               |   |   | 3,146,496 |   |   | $      | 4,325,491 |   |
|                                                   |   |   |      |   |   |   |   |   |
| Purchases of treasury shares                           |   |   | 42,000    |   |   |   | 29,674 |   |
| Carrying value of treasury shares sold during the year |   |   | (789,472  | )      |   |   | (1,081,375 | ) |
|                                                   |   |   |      |   |   |   |   |   |
| Balance, August 31, 2010                               |   |   | 2,399,024 |   |   |   | 3,273,790 |   |
|                                                   |   |   |      |   |   |   |   |   |
| Purchases of treasury shares                           |   |   | 101,000   |   |   |   | 30,265 |   |
|                                                   |   |   |      |   |   |   |   |   |
| Balance, August 31, 2011                               |   |   | 2,500,024 |   |   | $      | 3,304,055 |   |

----

----

----

----

|                                        |   | Total  |      |   | Level 1 |   |      | Level 2 |   |   | Level 3 |   |
|---------------------------------------------|--------|--------|-----------|--------|---------|--------|-----------|---------|--------|--------|---------|--------|
|                                        |   |   |      |   |    |   |      |    |   |   |    |   |
| Assets:                                     |   |   |      |   |    |   |      |    |   |   |    |   |
|    Cash and cash equivalents |   | $      | 6,456,568 |   |    | $      | 6,456,568 |    |   | $      | -       |   |   | $ | - |   |
|    Restricted cash           |   |   | 250,000   |   |    |   | 250,000   |    |   |   | -       |   |   |   | - |   |

|                                        |   | Fair Value at August 31, 2010 |       |
|---------------------------------------------|--------|-------------------------------|------------|
|                                        |   |                          |       |
|                                        |   | Total                         |       |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|                                        |   |                          |       |   |   |   |   |   |   |   |   |   |
| Assets:                                     |   |                          |       |   |   |   |   |   |   |   |   |   |
|    Cash and cash equivalents |   | $                             | 11,511,835 |   |   | $ | 11,511,835 |   |   | $ | - |   |   | $ | - |   |
|    Marketable securities     |   |                          | 60,000     |   |   |   | 60,000 |   |   |   | - |   |   |   | - |   |

----

----

----

----

|                                                                               |   | Year EndedAugust 31, 2011 |        |    | Year EndedAugust 31, 2010 |   |       | Year EndedAugust 31, 2009 |   |
|------------------------------------------------------------------------------------|--------|---------------------------|-------------|---------|---------------------------|--------|------------|---------------------------|--------|
|                                                                               |   |                      |        |    |                      |   |       |                      |   |
| Loss before taxes                                                                  |   | $                         | (10,542,122 | )       |                      | $      | (1,412,802 | )                         |   | $ | 778,351 |   |
| Statutory Canadian income tax rate                                                 |   |                      | 27.17       | %       |                      |   | 29.00      | %                         |   |   | 30.17 | % |
|                                                                               |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| Income tax recovery at statutory rate                                              |   |                      | (2,863,943  | )       |                      |   | (409,713   | )                         |   |   | 234,828 |   |
| Effect of differences in foreign tax rates                                         |   |                      | 23,908      |    |                      |   | -          |                      |   |   | (37,166 | ) |
| Expired non-capital loss carry-forwards                                            |   |                      | -           |    |                      |   | 297,968    |                      |   |   | 927,069 |   |
| Write-off of long-lived assets                                                     |   |                      | 697,119     |    |                      |   | -          |                      |   |   | - |   |
| Non-deductible expenses, net                                                       |   |                      | (33,200     | )  |                      |   | (47,622    | )                         |   |   | 49,954 |   |
| Differences between current year rate and rates used to measurefuture income taxes |   |                      | 119,439     |    |                      |   | (164,393   | )                         |   |   | 9,644 |   |
| Changes in corporate tax rates                                                     |   |                      | -           |    |                      |   | -          |                      |   |   | 170,313 |   |
| Differences in prior period tax returns as filed                                   |   |                      | (12,407     | )       |                      |   | 169,563    |                      |   |   | (213,282 | ) |
| Other taxes                                                                        |   |                      | -           |    |                      |   | -          |                      |   |   | 19,263 |   |
| Change in valuation allowance                                                      |   |                      | 1,338,628   |    |                      |   | (2,256,328 | )                         |   |   | (871,472 | ) |
| Other                                                                              |   |                      | (164,167    | )       |                      |   | 45,470     |                      |   |   | (3,910 | ) |
|                                                                               |   |                      |        |    |                      |   |       |                      |   |   |   |   |
| Income tax recovery                                                                |   | $                         | (894,623    | )       |                      | $      | (2,365,055 | )                         |   | $ | 285,241 |   |

----

----

----

|                                                      |   | Year EndedAugust 31, 2011 |       |   | Year EndedAugust 31, 2010 |   |
|-----------------------------------------------------------|--------|---------------------------|------------|--------|---------------------------|--------|
|                                                      |   |                      |       |   |                      |   |
| Future income tax assets                                  |   |                      |       |   |                      |   |
| Canada                                                    |   |                      |       |   |                      |   |
| Non-capital loss carry-forwards                           |   | $                         | 3,542,938  |   |                      | $      | 2,638,203 |   |
| Share issuance costs                                      |   |                      | 117,181    |   |                      |   | 107,329 |   |
| Investments                                               |   |                      | 398,479    |   |                      |   | 390,979 |   |
| Property and equipment                                    |   |                      | 19,073     |   |                      |   | 82,422 |   |
| Intangible assets                                         |   |                      | 4,867      |   |                      |   | 14,207 |   |
| Deferred revenues                                         |   |                      | -          |   |                      |   | 227,746 |   |
| Others                                                    |   |                      | 6,146      |   |                      |   | - |   |
| China                                                     |   |                      |       |   |                      |   |   |   |
| Non-capital loss carry-forwards                           |   |                      | 372,809    |   |                      |   | 262,898 |   |
| Property and equipment                                    |   |                      | 43,111     |   |                      |   | 23,205 |   |
|                                                      |   |                      |       |   |                      |   |   |   |
| Total future income tax assets before valuation allowance |   |                      | 4,504,606  |   |                      |   | 3,746,989 |   |
| Less: valuation allowance                                 |   |                      | (1,714,406 | )      |                      |   | (375,777 | ) |
|                                                      |   |                      |       |   |                      |   |   |   |
|                                                      |   |                      | 2,790,200  |   |                      |   | 3,371,212 |   |
|                                                      |   |                      |       |   |                      |   |   |   |
| Future income tax liabilities                             |   |                      |       |   |                      |   |   |   |
| Canada                                                    |   |                      |       |   |                      |   |   |   |
| Property and equipment                                    |   |                      | (24,116    | )      |                      |   | (238,873 | ) |
| Intangible assets                                         |   |                      | (1,107,488 | )      |                      |   | (2,369,600 | ) |
| China                                                     |   |                      |       |   |                      |   |   |   |
| Property and equipment                                    |   |                      | (5,249     | )      |                      |   | (104,322 | )  |
| Intangible assets                                         |   |                      | (115,246   | )      |                      |   | - |   |
|                                                      |   |                      |       |   |                      |   |   |   |
|                                                      |   |                      | (1,252,098 | )      |                      |   | (2,712,795 | ) |
|                                                      |   |                      |       |   |                      |   |   |   |
| Classified as:                                            |   |                      |       |   |                      |   |   |   |
| Future income tax asset, net                              |   |                      | 2,200,199  |   |                      |   | 658,417 |   |
| Future income tax liabilities, net                        |   |                      | (662,102   | )      |                      |   | - |   |
|                                                      |   |                      |       |   |                      |   |   |   |
|                                                      |   | $                         | 1,538,097  |   |                      | $      | 658,417 |   |

----

----

----

|                                                                                        |   | Year EndedAugust 31, 2011 |      |   | Year EndedAugust 31, 2010 |   |
|---------------------------------------------------------------------------------------------|--------|---------------------------|-----------|--------|---------------------------|--------|
|                                                                                        |   |                      |      |   |                      |   |
| Beginning balance                                                                           |   | $                         | 375,777   |   |                      | $      | 2,632,105 |   |
|                                                                                        |   |                      |      |   |                      |   |   |   |
|    Current period tax losses and temporary differences                       |   |                      | 1,014,646 |   |                      |   | 498,812 |   |
|       Expired tax losses during the period                    |   |                      | -         |   |                      |   | (297,968 | ) |
|       Impact of change in statutory rates on opening balance  |   |                      | -         |   |                      |   | - |   |
|       Differences in prior period tax returns as filed        |   |                      | (122,051  | )      |                      |   | 169,563 |   |
|       Tax benefit of non-capital losses (recognized) provided |   |                      | 446,033   |   |                      |   | (2,626,735 | ) |
|                                                                                        |   |                      |      |   |                      |   |   |   |
|                                                                                        |   |                      | 1,338,628 |   |                      |   | (2,256,328 | ) |
|                                                                                        |   |                      |      |   |                      |   |   |   |
| Ending balance                                                                              |   | $                         | 1,714,405 |   |                      | $      | 375,777 |   |

| Year of Expiry |   | China  |      |   | Canada |   |       | Total  |   |
|----------------|--------|--------|-----------|--------|--------|--------|------------|--------|--------|
|           |   |   |      |   |   |   |       |   |   |
| 2014           |   | $      | 179,009   |   |   | $      | 1,396,407  |   |   | $ | 1,575,416 |   |
| 2015           |   |   | 462,390   |   |   |   | 928,481    |   |   |   | 1,390,871 |   |
| 2016           |   |   | 849,838   |   |   |   | -          |   |   |   | 849,838 |   |
| 2026           |   |   | -         |   |   |   | 587,698    |   |   |   | 587,698 |   |
| 2027           |   |   | -         |   |   |   | 860,134    |   |   |   | 860,134 |   |
| 2028           |   |   | -         |   |   |   | 2,043,607  |   |   |   | 2,043,607 |   |
| 2029           |   |   | -         |   |   |   | 2,211,918  |   |   |   | 2,211,918 |   |
| 2030           |   |   | -         |   |   |   | 1,864,392  |   |   |   | 1,864,392 |   |
| 2031           |   |   | -         |   |   |   | 4,244,463  |   |   |   | 4,244,463 |   |
|           |   |   |      |   |   |   |       |   |   |   |   |   |
|           |   | $      | 1,491,237 |   |   | $      | 14,137,101 |   |   | $ | 15,628,338 |   |

----

| For the years ending August 31, |   | Corporate (Canada) |    |   | CIBT (China) |   |    | SSDC   |   |   | KGIC      |   |   | Total  |      |
|---------------------------------|--------|--------------------|---------|--------|--------------|--------|---------|--------|--------|--------|-----------|--------|--------|--------|-----------|
|                            |   |               |    |   |         |   |    |   |   |   |      |   |   |   |      |
| 2012                       |   | $                  | 88,150  |   |         | $      | 110,686 |   |   | $      | 1,220,376 |   |   | $      | 1,891,981 |   |   | $ | 3,311,193 |   |
| 2013                       |   |               | 91,088  |   |         |   | 114,021 |   |   |   | 667,271   |   |   |   | 1,971,133 |   |   |   | 2,843,513 |   |
| 2014                       |   |               | 91,676  |   |         |   | 133,538 |   |   |   | 392,102   |   |   |   | 1,624,050 |   |   |   | 2,241,366 |   |
| 2015                       |   |               | 15,279  |   |         |   | -       |   |   |   | 192,351   |   |   |   | 1,542,548 |   |   |   | 1,750,178 |   |
| 2016                       |   |               | -       |   |         |   | -       |   |   |   | 143,594   |   |   |   | 700,145   |   |   |   | 843,739 |   |
|                            |   |               |    |   |         |   |    |   |   |   |      |   |   |   |      |   |   |   |   |   |
|                            |   | $                  | 286,193 |   |         | $      | 358,245 |   |   | $      | 2,615,694 |   |   | $      | 7,729,855 |   |   | $ | 10,989,989 |   |

----

----

----

|                                     |   | Less than 1 year |       |   |  1 – 3 years |   |      |  4- 5 years |   |   | Greater than 5 years |   |   |  Total |   |
|------------------------------------------|--------|------------------|------------|--------|-------------------------|--------|-----------|------------------|--------|--------|----------------------|--------|--------|-------------|--------|
|                                     |   |             |       |   |                    |   |      |             |   |   |                 |   |   |        |   |
| Accounts payable and accrued liabilities |   | $                | 4,484,536  |   |                    | $      | -         |             |   | $      | -                    |   |   | $           | -      |   |   | $ | 4,484,536 |   |
| Income taxes payable                     |   |             | 499,905    |   |                    |   | -         |             |   |   | -                    |   |   |        | -      |   |   |   | 499,905 |   |
| Capital leases *                         |   |             | 101,765    |   |                    |   | 199,352   |             |   |   | 49,780               |   |   |        | -      |   |   |   | 350,897 |   |
| Long-term debt *                         |   |             | 2,152,492  |   |                    |   | 34,232    |             |   |   | -                    |   |   |        | -      |   |   |   | 2,186,724 |   |
| Operating leases                         |   |             | 3,311,193  |   |                    |   | 6,835,059 |             |   |   | 843,737              |   |   |        | -      |   |   |   | 10,989,989 |   |
|                                     |   |             |       |   |                    |   |      |             |   |   |                 |   |   |        |   |   |   |   |   |   |
|                                     |   | $                | 10,549,891 |   |                    | $      | 7,068,643 |             |   | $      | 893,517              |   |   | $           | -      |   |   | $ | 18,512,051 |   |

----

----

----

----

|                           |   | Year EndedAugust 31, 2011 |       |   | Year EndedAugust 31, 2010 |   |       | Year EndedAugust 31, 2009 |   |
|--------------------------------|--------|---------------------------|------------|--------|---------------------------|--------|------------|---------------------------|--------|
|                           |   |                      |       |   |                      |   |       |                      |   |
| Advertising & agency fees  |   | $                         | 12,190,564 |   |                      | $      | 8,700,663  |                      |   | $ | 5,699,158 |   |
| Bank charges and interest      |   |                      | 395,050    |   |                      |   | 347,265    |                      |   |   | 198,838 |   |
| Consulting and management fees |   |                      | 1,964,726  |   |                      |   | 1,380,305  |                      |   |   | 1,230,128 |   |
| Directors insurance            |   |                      | 45,439     |   |                      |   | 79,889     |                      |   |   | 79,074 |   |
| Investor relations             |   |                      | 99,062     |   |                      |   | 95,187     |                      |   |   | 49,892 |   |
| Office and general             |   |                      | 4,538,292  |   |                      |   | 4,055,573  |                      |   |   | 3,557,686 |   |
| Professional fees              |   |                      | 1,369,960  |   |                      |   | 1,940,634  |                      |   |   | 1,544,022 |   |
| Regulatory fees                |   |                      | 134,665    |   |                      |   | 240,688    |                      |   |   | 58,149 |   |
| Rent                           |   |                      | 6,092,868  |   |                      |   | 4,108,635  |                      |   |   | 3,019,407 |   |
| Salaries and benefits          |   |                      | 12,031,267 |   |                      |   | 10,645,586 |                      |   |   | 9,631,436 |   |
| Travel and promotion           |   |                      | 375,120    |   |                      |   | 305,381    |                      |   |   | 445,823 |   |
|                           |   |                      |       |   |                      |   |       |                      |   |   |   |   |
|                           |   | $                         | 39,237,013 |   |                      | $      | 31,899,806 |                      |   | $ | 25,513,613 |   |

----

----

----

|                                     |   | Year EndedAugust 31, 2011 |       |   | Year EndedAugust 31, 2010 |   |       | Year EndedAugust 31, 2009 |   |
|------------------------------------------|--------|---------------------------|------------|--------|---------------------------|--------|------------|---------------------------|--------|
|                                     |   |                      |       |   |                      |   |       |                      |   |
| Accounts receivable                      |   | $                         | 2,733,063  |   |                      | $      | (2,846,521 | )                         |   | $ | (4,162,671 | ) |
| Prepaid expenses and other assets        |   |                      | 423,206    |   |                      |   | 2,470,624  |                      |   |   | (150,779 | ) |
| Inventory                                |   |                      | (63,371    | )      |                      |   | 58,131     |                      |   |   | 119,894 |   |
| Accounts payable and accrued liabilities |   |                      | (407,931   | )      |                      |   | (255,373   | )                         |   |   | 666,307 |   |
| Income taxes payable                     |   |                      | (19,172    | )      |                      |   | 65,186     |                      |   |   | 30,669 |   |
| Deferred educational revenues            |   |                      | (3,917,774 | )      |                      |   | (583,878   | )                         |   |   | 2,875,843 |   |
| Other asset                              |   |                      | -          |   |                      |   | -          |                      |   |   | 29,021 |   |
|                                     |   |                      |       |   |                      |   |       |                      |   |   |   |   |
|                                     |   | $                         | (1,251,979 | )      |                      | $      | (1,091,831 | )                         |   | $ | (591,716 | ) |

----

|                                           |   | Year EndedAugust 31, 2011 |      |   | Year EndedAugust 31, 2010 |   |      | Year Ended August 31, 2009 |   |
|------------------------------------------------|--------|---------------------------|-----------|--------|---------------------------|--------|-----------|----------------------------|--------|
|                                           |   |                      |      |   |                      |   |      |                       |   |
| Accounts receivable - Weifang University (1)   |   | $                         | 2,592,660 |   |                      | $      | 1,547,344 |                       |   | $ | 2,008,503 |   |
| Accounts payable - Weifang University (1)      |   | $                         | 1,103,538 |   |                      | $      | 135,814   |                       |   | $ | 790,564 |   |
| Due to officers, employees and directors (2)   |   | $                         | 59,484    |   |                      | $      | 118,303   |                       |   | $ | 418,304 |   |
| Due from officers, employees and directors (3) |   | $                         | 100,000   |   |                      | $      | 143,721   |                       |   | $ | 143,741 |   |
| Management fees, salaries and bonuses          |   | $                         | 1,091,249 |   |                      | $      | 1,772,472 |                       |   | $ | 1,538,411 |   |

| 1)   | In 2004, CIBT established a business venture with Weifang University and received a 60% interest in Beihai College from Weifang in consideration for funding Beihai College in the amount of $714,286 (5,000,000 RMB). Beihai College is a PRC government approved college which has been in operation since 2002. In consideration for retaining a 40% interest in Beihai College, Weifang has transferred finite life intangible assets consisting of its existing programs and student enrolments to the newly named CIBT Beihai International Management School and has also agreed to provide exclusive use of the Beihai College facilities at no cost for a period of seven years (subsequently amended to 15 years). Effective July 1, 2007, the Chinese Government implemented a new cash management policy affecting Beihai College. The tuition fees of Beihai College are required to be directly remitted to the local Chinese Government when tuition fees are received, and the funds are held by the Chinese Government under the account of Weifang. Beihai College can receive funds for its operations from Weifang on an as-needed basis up to the amount of the tuition fees collected. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2)   | As of August 31, 2011, the amount due to officers, employees and directors is comprised of $13,222 (August 31, 2010:   $38,014) due to officers of the Company and $46,262 (August 31, 2010:   $80,289) due to the President of IRIX. These amounts are non-interest bearing and have no fixed terms of repayment. Transactions with related party are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Such amounts are included as part of the cash flows from operating activities in the Consolidated Statements of Cash Flow. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3)   | As at August 31, 2011, a balance of $100,000 was due from a director of the Company. The amount is included as part of the cash flows from financing activities in the Consolidated Statements of Cash Flow. The August 31, 2010, amount of $143,721 was due from the President of SSDC, which was fully repaid during the three month period ended February 28, 2011. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| Industry and Geographic Segments                         |   | Year Ended August 31, 2011 |       |
|----------------------------------------------------------|--------|----------------------------|------------|
|                                                     |   | CIBT(China)                |       |   | SSDC(Canada) |   |   | KGIC(Canada) |   |   | IRIX(Canada) |   |   | Corporate(Canada) |   |   |  Consolidated |   |
| Revenues                                                 |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Educational                                              |   | $                          | 4,206,757  |   |   | $ | 30,619,935 |   |   | $ | 21,838,554 |   |   | $ | - |   |   | $ | - |   |   | $ | 56,665,246 |   |
| Design and advertising                                   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | 1,909,880 |   |   |   | - |   |   |   | 1,909,880 |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                     |   | $                          | 4,206,757  |   |   | $ | 30,619,935 |   |   | $ | 21,838,554 |   |   | $ | 1,909,880 |   |   | $ | - |   |   | $ | 58,575,126 |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues, net of direct costs                            |   | $                          | 2,036,548  |   |   | $ | 19,929,317 |   |   | $ | 14,265,049 |   |   | $ | 913,421 |   |   | $ | - |   |   | $ | 37,144,335 |   |
| Other expenses and items:                                |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   General and administrative                   |   |                       | (2,428,574 | ) |   |   | (18,096,580 | ) |   |   | (13,930,101 | ) |   |   | (837,163 | ) |   |   | (3,944,595 | ) |   |   | (39,237,013 | ) |
|   Amortization                                 |   |                       | (466,800   | ) |   |   | (800,404 | ) |   |   | (289,174 | ) |   |   | (29,106 | ) |   |   | (72,091 | ) |   |   | (1,657,575 | ) |
|   Stock-based compensation                     |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (91,122 | ) |   |   | (91,122 | ) |
|   Business development costs                   |   |                       | (230,362   | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (230,362 | ) |
|   Interest and other income                    |   |                       | 176,775    |   |   |   | - |   |   |   | - |   |   |   | 3,870 |   |   |   | - |   |   |   | 180,645 |   |
|   Foreign exchange gain (loss), net            |   |                       | 21,648     |   |   |   | - |   |   |   | - |   |   |   | (5,968 | ) |   |   | (4,909 | ) |   |   | 10,771 |   |
|   Gain (loss) on disposal of assets            |   |                       | 21,344     |   |   |   | (60,505 | ) |   |   | - |   |   |   | (495 | ) |   |   | - |   |   |   | (39,656 | ) |
|   Interest on long-term debt                   |   |                       | -          |   |   |   | (153,656 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (153,656 | ) |
|   Impairment of marketable securities          |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (60,000 | ) |   |   | (60,000 | ) |
|   Impairment of long-lived assets and goodwill |   |                       | (5,897,778 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (5,897,778 | ) |
|   Write-off of deferred finance fees           |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (510,711 | ) |   |   | (510,711 | ) |
|   Restructuring and integration costs          |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|   Income tax recovery (provision), net         |   |                       | 698,430    |   |   |   | 483,361 |   |   |   | 48,872 |   |   |   | 28,532 |   |   |   | (364,572 | ) |   |   | 894,623 |   |
|   Non-controlling interests                    |   |                       | (54,553    | ) |   |   | (389,012 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (443,565 | ) |
|   Inter-segment transactions                   |   |                       | -          |   |   |   | (1,058,554 | ) |   |   | (543,173 | ) |   |   | (6,000 | ) |   |   | 1,607,727 |   |   |   | - |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                        |   | $                          | (6,123,322 | ) |   | $ | (146,033 | ) |   | $ | (448,527 | ) |   | $ | 67,091 |   |   | $ | (3,440,273 | ) |   | $ | (10,091,064 | ) |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                             |   | $                          | 5,136,756  |   |   | $ | 22,118,314 |   |   | $ | 11,195,200 |   |   | $ | 449,368 |   |   | $ | 2,260,796 |   |   | $ | 41,160,434 |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property and equipment                                   |   | $                          | 439,753    |   |   | $ | 1,672,908 |   |   | $ | 315,968 |   |   | $ | 164,323 |   |   | $ | 38,866 |   |   | $ | 2,631,818 |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intangible assets                                        |   | $                          | 719,440    |   |   | $ | 7,596,891 |   |   | $ | 2,542,500 |   |   | $ | - |   |   | $ | 80,367 |   |   | $ | 10,939,198 |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Goodwill                                                 |   | $                          | -          |   |   | $ | 5,169,303 |   |   | $ | 3,542,488 |   |   | $ | - |   |   | $ | - |   |   | $ | 8,711,791 |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-controlling interests                                |   | $                          | 616,945    |   |   | $ | 621,326 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 1,238,271 |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital expenditures                                     |   | $                          | 163,147    |   |   | $ | 191,863 |   |   | $ | 65,393 |   |   | $ | 22,461 |   |   | $ | 45,383 |   |   | $ | 488,247 |   |

----

----

----

| Industry and Geographic Segments                         |   | Year Ended August 31, 2010 |       |
|----------------------------------------------------------|--------|----------------------------|------------|
|                                                     |   | CIBT(China)                |       |   | SSDC(Canada) |   |   | KGIC(Canada) *** |   |   | IRIX(Canada) |   |   | Corporate(Canada) |   |   |  Consolidated |   |
| Revenues                                                 |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Educational                                              |   | $                          | 7,166,099  |   |   | $ | 36,919,922 |   |   | $ | 10,302,107 |   |   | $ | - |   |   | $ | - |   |   | $ | 54,388,128 |   |
| Design and advertising                                   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | 1,566,724 |   |   |   | - |   |   |   | 1,566,724 |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                     |   | $                          | 7,166,099  |   |   | $ | 36,919,922 |   |   | $ | 10,302,107 |   |   | $ | 1,566,724 |   |   | $ | - |   |   | $ | 55,954,852 |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues, net of direct costs                            |   | $                          | 3,388,780  |   |   | $ | 25,168,370 |   |   | $ | 5,863,734 |   |   | $ | 863,666 |   |   | $ | - |   |   | $ | 35,284,550 |   |
|  Other expenses and items:                          |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   General and administrative                   |   |                       | (3,230,571 | ) |   |   | (18,325,086 | ) |   |   | (5,277,510 | ) |   |   | (802,856 | ) |   |   | (4,263,783 | ) |   |   | (31,899,806 | ) |
|   Amortization                                 |   |                       | (491,813   | ) |   |   | (829,453 | ) |   |   | (127,923 | ) |   |   | (26,496 | ) |   |   | (61,592 | ) |   |   | (1,537,277 | ) |
|   Stock-based compensation                     |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (232,626 | ) |   |   | (232,626 | ) |
|   Business development costs                   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|   Interest and other income                    |   |                       | 204,815    |   |   |   | - |   |   |   | - |   |   |   | 2,203 |   |   |   | 607 |   |   |   | 207,625 |   |
|   Foreign exchange gain (loss), net            |   |                       | (86,729    | ) |   |   | - |   |   |   | - |   |   |   | (2,714 | ) |   |   | (7,234 | ) |   |   | (96,677 | ) |
|   Gain (loss) on disposal of assets            |   |                       | (56,412    | ) |   |   | (118,104 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (174,516 | ) |
|   Interest on long-term debt                   |   |                       | -          |   |   |   | (92,346 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (92,346 | ) |
|   Impairment of marketable securities          |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (127,229 | ) |   |   | (127,229 | ) |
|   Impairment of long-lived assets and goodwill |   |                       | (2,000,000 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,000,000 | ) |
|   Write-off of deferred finance fees           |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (200,000 | ) |   |   | (200,000 | ) |
|   Restructuring and integration costs          |   |                       | -          |   |   |   | (297,000 | ) |   |   | (100,000 | ) |   |   | - |   |   |   | (147,500 | ) |   |   | (544,500 | ) |
|   Income tax recovery (provision), net         |   |                       | 606,441    |   |   |   | (844,002 | ) |   |   | (6,392 | ) |   |   | (13,396 | ) |   |   | 2,622,404 |   |   |   | 2,365,055 |   |
|   Non-controlling interests                    |   |                       | 136,056    |   |   |   | (505,939 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (369,883 | ) |
|   Inter-segment transactions                   |   |                       | -          |   |   |   | (3,149,040 | ) |   |   | (267,361 | ) |   |   | 22,531 |   |   |   | 3,393,870 |   |   |   | - |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                        |   | $                          | (1,529,433 | ) |   | $ | 1,007,400 |   |   | $ | 84,548 |   |   | $ | 42,938 |   |   | $ | 976,917 |   |   | $ | 582,370 |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                             |   | $                          | 13,360,396 |   |   | $ | 28,981,989 |   |   | $ | 10,043,093 |   |   | $ | 298,819 |   |   | $ | 2,285,041 |   |   | $ | 54,969,338 |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property and equipment                                   |   | $                          | 816,903    |   |   | $ | 2,185,124 |   |   | $ | 329,749 |   |   | $ | 81,767 |   |   | $ | 5,310 |   |   | $ | 3,418,853 |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intangible assets                                        |   | $                          | 4,243,306  |   |   | $ | 7,688,680 |   |   | $ | 2,752,500 |   |   | $ | - |   |   | $ | 140,631 |   |   | $ | 14,825,117 |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Goodwill                                                 |   | $                          | 2,287,905  |   |   | $ | 5,169,303 |   |   | $ | 3,542,488 |   |   | $ | - |   |   | $ | - |   |   | $ | 10,999,696 |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-controlling interests                                |   | $                          | 588,878    |   |   | $ | 738,248 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 1,327,126 |   |
|                                                     |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital expenditures                                     |   | $                          | 90,482     |   |   | $ | 556,992 |   |   | $ | 18,083 |   |   | $ | 7,088 |   |   | $ | - |   |   | $ | 672,645 |   |

----

----

----

| Industry and Geographic Segments                 |   | Year Ended August 31, 2009 |       |
|--------------------------------------------------|--------|----------------------------|------------|
|                                             |   | CIBT(China)                |       |   | SSDC(Canada) |   |   | IRIX(Canada) |   |   | Corporate(Canada) |   |   |  Consolidated |   |
| Revenues                                         |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Educational                                      |   | $                          | 9,576,706  |   |   | $ | 33,659,924 |   |   | $ | - |   |   | $ | - |   |   | $ | 43,236,630 |   |
| Design and advertising                           |   |                       | -          |   |   |   | - |   |   |   | 1,314,328 |   |   |   | - |   |   |   | 1,314,328 |   |
|                                             |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   | $                          | 9,576,706  |   |   | $ | 33,659,924 |   |   | $ | 1,314,328 |   |   | $ | - |   |   | $ | 44,550,958 |   |
|                                             |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues, net of direct costs                    |   | $                          | 5,201,160  |   |   | $ | 22,439,524 |   |   | $ | 675,926 |   |   | $ | - |   |   | $ | 28,316,610 |   |
| Other expenses and items:                        |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Amortization                         |   |                       | (651,813   | ) |   |   | (893,541 | ) |   |   | (29,484 | ) |   |   | (61,923 | ) |   |   | (1,636,761 | ) |
|   General and administrative           |   |                       | (4,156,649 | ) |   |   | (17,333,591 | ) |   |   | (790,260 | ) |   |   | (3,233,113 | ) |   |   | (25,513,613 | ) |
|   Stock-based compensation             |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | (581,098 | ) |   |   | (581,098 | ) |
|   Interest on long-term debt           |   |                       | -          |   |   |   | (41,579 | ) |   |   | - |   |   |   | - |   |   |   | (41,579 | ) |
|   Foreign exchange gain (loss)         |   |                       | 119,462    |   |   |   | - |   |   |   | 19,608 |   |   |   | 23,467 |   |   |   | 162,537 |   |
|   Loss on disposal of assets           |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|   Impairment of marketable securities  |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|   Impairment of intangible assets      |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|   Write-off of deferred finance fees   |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|   Restructuring and integration costs  |   |                       | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|   Non-controlling interests            |   |                       | (2,295     | ) |   |   | (474,808 | ) |   |   | - |   |   |   | - |   |   |   | (477,103 | ) |
|   Other income                         |   |                       | 45,831     |   |   |   | - |   |   |   | 9 |   |   |   | 26,415 |   |   |   | 72,255 |   |
|   Income tax recovery (provision), net |   |                       | 4,115      |   |   |   | (289,356 | ) |   |   | - |   |   |   | - |   |   |   | (285,241 | ) |
|   Inter-segment transactions           |   |                       | -          |   |   |   | (2,342,337 | ) |   |   | 73,420 |   |   |   | 2,268,917 |   |   |   | - |   |
|                                             |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                |   | $                          | 559,811    |   |   | $ | 1,064,312 |   |   | $ | (50,781 | ) |   | $ | (1,557,335 | ) |   | $ | 16,007 |   |
|                                             |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                     |   | $                          | 16,643,989 |   |   | $ | 29,861,938 |   |   | $ | 217,610 |   |   | $ | 798,155 |   |   | $ | 47,521,692 |   |
|                                             |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property and equipment                           |   | $                          | 1,287,078  |   |   | $ | 2,343,921 |   |   | $ | 101,175 |   |   | $ | 6,638 |   |   | $ | 3,738,812 |   |
|                                             |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intangible assets                                |   | $                          | 6,325,324  |   |   | $ | 7,883,800 |   |   | $ | - |   |   | $ | 200,895 |   |   | $ | 14,410,019 |   |
|                                             |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Goodwill                                         |   | $                          | 2,287,905  |   |   | $ | 4,722,970 |   |   | $ | - |   |   | $ | - |   |   | $ | 7,010,875 |   |
|                                             |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-controlling interests                        |   | $                          | 748,863    |   |   | $ | 449,743 |   |   | $ | - |   |   | $ | - |   |   | $ | 1,198,606 |   |
|                                             |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital expenditures                             |   | $                          | 304,347    |   |   | $ | 443,953 |   |   | $ | 4,797 |   |   | $ | - |   |   | $ | 753,097 |   |

----

----

----

----

| (a) | The effect of the differences between Canadian GAAP and US GAAP on the significant captions on the Company’s consolidated balance sheets, statement of (loss) income and comprehensive (loss) income and cash flows is summarized as follows: |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Consolidated Balance Sheets                                             |   | August 31, 2011 |       |   | August 31, 2010 |   |
|-------------------------------------------------------------------------|--------|----------------------|------------|--------|----------------------|--------|
|                                                                    |   |                 |       |   |                 |   |
| Total assets under Canadian GAAP                                        |   | $                    | 41,160,434 |   |                 | $      | 54,969,338 |   |
| (c) Acquisition costs                                                   |   |                 | (279,062   | )      |                 |   | (279,062 | ) |
| Total assets under US GAAP                                              |   | $                    | 40,881,372 |   |                 | $      | 54,690,276 |   |
|                                                                    |   |                 |       |   |                 |   |   |   |
| Total liabilities under Canadian GAAP                                   |   | $                    | 22,124,793 |   |                 | $      | 26,619,254 |   |
| (b) Income tax uncertainties – unrecognized tax benefits          |   |                 | (18,352    | )      |                 |   | (10,960 | ) |
| (b) Income tax uncertainties – accrual for interest and penalties |   |                 | 168,766    |   |                 |   | 40,669 |   |
| Total liabilities under US GAAP                                         |   |                 | 22,275,207 |   |                 |   | 26,648,963 |   |
|                                                                    |   |                 |       |   |                 |   |   |   |
| Non-controlling interest under Canadian GAAP                            |   |                 | 1,238,271  |   |                 |   | 1,327,126 |   |
| (d) Non-controlling interest in subsidiaries                            |   |                 | (1,238,271 | )      |                 |   | (1,327,126 | ) |
| Non-controlling interest under US GAAP                                  |   |                 | -          |   |                 |   | - |   |
|                                                                    |   |                 |       |   |                 |   |   |   |
| Total shareholders' equity under Canadian GAAP                          |   |                 | 17,797,370 |   |                 |   | 27,022,958 |   |
| (b) Income tax uncertainties – unrecognized tax benefits          |   |                 | 18,352     |   |                 |   | 10,960 |   |
| (b) Income tax uncertainties – accrual for interest and penalties |   |                 | (168,766   | )      |                 |   | (40,669 | ) |
| (c) Acquisition costs                                                   |   |                 | (279,062   | )      |                 |   | (279,062 | ) |
| (d) Non-controlling interest in subsidiaries                            |   |                 | 1,238,271  |   |                 |   | 1,327,126 |   |
| Total shareholder’s equity under US GAAP                          |   |                 | 18,606,165 |   |                 |   | 28,041,313 |   |
|                                                                    |   |                 |       |   |                 |   |   |   |
| Total liabilities and shareholders' equity under US GAAP                |   | $                    | 40,881,372 |   |                 | $      | 54,690,276 |   |

----

----

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| Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income |   | Year Ended August 31, 2011 |        |   | Year Ended August 31, 2010 |   |     | Year Ended August 31, 2009 |   |
|--------------------------------------------------------------------------|--------|---------------------------------|-------------|--------|----------------------------|--------|----------|----------------------------|--------|
|                                                                     |   |                            |        |   |                       |   |     |                       |   |
| Net (loss) income under Canadian GAAP                                    |   | $                               | (10,091,064 | )      |                       | $      | 582,370  |                       |   | $ | 16,007 |   |
|                                                                     |   |                            |        |   |                       |   |     |                       |   |   |   |   |
| (b) Income tax uncertainties – unrecognized tax benefits           |   |                            | 7,392       |   |                       |   | 10,960   |                       |   |   | - |   |
| (b) Income tax uncertainties – accrual for interest and penalties  |   |                            | (128,097    | )      |                       |   | (40,669  | )                          |   |   | - |   |
|                                                                     |   |                            |        |   |                       |   |     |                       |   |   |   |   |
| (c) Acquisition costs                                                    |   |                            | -           |   |                       |   | (279,062 | )                          |   |   | - |   |
|                                                                     |   |                            |        |   |                       |   |     |                       |   |   |   |   |
| Net (loss) income under US GAAP                                          |   | $                               | (10,211,769 | )      |                       | $      | 273,599  |                       |   | $ | 16,007 |   |
| Basic and diluted (loss) income per share under US GAAP                  |   | $                               | (0.15       | )      |                       | $      | 0.00     |                       |   | $ | 0.00 |   |

| Consolidated Statements of Cash Flows                                                 |   | Year Ended August 31, 2011 |       |   | Year Ended August 31, 2010 |   |       | Year Ended August 31, 2009 |   |
|---------------------------------------------------------------------------------------|--------|----------------------------|------------|--------|----------------------------|--------|------------|----------------------------|--------|
| Net cash provided by (used in) operating activities under Canadian and US GAAP        |   | $                          | (3,581,135 | )      |                       | $      | 2,027,949  |                       |   | $ | 2,329,895 |   |
| Net cash used in investing activities under Canadian GAAP                             |   |                       | (853,288   | )      |                       | $      | (5,752,247 | )                          |   | $ | (1,969,054 | ) |
| (d) Disposal of controlling interest in variable interestentity, net of cash received |   |                       | -          |   |                       |   | -          |                       |   |   | 401,980 |   |
| Net cash used in investing activities under US GAAP                                   |   | $                          | (853,288   | )      |                       | $      | (5,752,247 | )                          |   | $ | (1,567,074 | ) |
| Net cash provided by (used in) financing activities under Canadian GAAP               |   | $                          | (570,265   | )      |                       | $      | 4,993,709  |                       |   | $ | (943,879 | ) |
| (d) Disposal of controlling interest in variable interestentity, net of cash received |   |                       | -          |   |                       |   | -          |                       |   |   | (401,980 | ) |
| Net cash provided by (used in) financing activities under US GAAP                     |   | $                          | (570,265   | )      |                       | $      | 4,993,709  |                       |   | $ | (1,345,859 | ) |
| Effect of exchange rate changes under Canadian and US GAAP                            |   | $                          | (50,579    | )      |                       | $      | (94,704    | )                          |   | $ | (12,571 | ) |

----

----

----

| Presentation differences between Canadian to US GAAP are: |   | Year Ended August 31, 2011 |       |   | Year Ended August 31, 2010 |   |       | Year Ended August 31, 2009 |   |
|-----------------------------------------------------------|--------|----------------------------|------------|--------|----------------------------|--------|------------|----------------------------|--------|
|                                                      |   |                       |       |   |                       |   |       |                       |   |
| Direct costs – Canadian  GAAP             |   | $                          | 21,430,791 |   |                       | $      | 20,670,302 |                       |   | $ | 16,234,348 |   |
| Amortization for the year                                 |   |                       | 1,657,575  |   |                       |   | 1,537,277  |                       |   |   | 1,636,761 |   |
|                                                      |   |                       |       |   |                       |   |       |                       |   |   |   |   |
| Direct costs – US GAAP                              |   | $                          | 23,088,366 |   |                       | $      | 22,207,579 |                       |   | $ | 17,871,109 |   |

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----

|                                                          |   | Year Ended August 31, 2011 |    |   | Year Ended August 31, 2010 |   |    | Year Ended August 31, 2009 |   |
|---------------------------------------------------------------|--------|---------------------------------|---------|--------|---------------------------------|--------|---------|---------------------------------|--------|
|                                                          |   |                            |    |   |                            |   |    |                            |   |
| Balance, beginning of  period                       |   | $                               | 398,396 |   |                            | $      | 409,356 |                            |   | $ | 293,181 |   |
| Additions based on tax positions related to thecurrent period |   |                            | -       |   |                            |   | -       |                            |   |   | 214,925 |   |
| Additions for tax positions of prior periods                  |   |                            |    |   |                            |   |    |                            |   |   | - |   |
| Reductions for tax positions of prior periods                 |   |                            | -       |   |                            |   | -       |                            |   |   | (98,463 | ) |
| Settlements                                                   |   |                            | -       |   |                            |   | -       |                            |   |   | - |   |
| Effect of foreign currency movements                          |   |                            | (7,392  | )      |                            |   | (10,960 | )                               |   |   | (287 | ) |
| Balance, end of period                                        |   | $                               | 391,004 |   |                            | $      | 398,396 |                            |   | $ | 409,356 |   |

|                                                 |   | Year Ended August 31, 2011 |    |   | Year Ended August 31, 2010 |   |    | Year Ended August 31, 2009 |   |
|------------------------------------------------------|--------|---------------------------------|---------|--------|---------------------------------|--------|---------|---------------------------------|--------|
|                                                 |   |                            |    |   |                            |   |    |                            |   |
| Balance, beginning of period                         |   | $                               | 156,906 |   |                            | $      | 116,237 |                            |   | $ | 52,214 |   |
| Accrual for interest and penalties during the period |   |                            | 130,025 |   |                            |   | 79,674  |                            |   |   | 67,279 |   |
| Effect of foreign currency movements                 |   |                            | (1,928  | )      |                            |   | (39,005 | )                               |   |   | (3,256 | ) |
| Balance, end of period                               |   | $                               | 285,003 |   |                            | $      | 156,906 |                            |   | $ | 116,237 |   |

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|                                 |   | Year Ended                      |       |    | Year Ended                 |   |
|--------------------------------------|--------|---------------------------------|------------|---------|----------------------------|--------|
|                                 |   | August 31, 2010(unaudited) |       |    | August 31, 2009(unaudited) |   |
|                                 |   |                            |       |    |                       |   |
| Revenues                             |   | $                               | 61,090,584 |    |                       | $      | 59,429,104 |   |
|                                 |   |                            |       |    |                       |   |   |   |
| Net earnings                         |   | $                               | (1,269,760 | )  |                       | $      | (1,155,238 | ) |
|                                 |   |                            |       |    |                       |   |   |   |
| Pro forma basic earnings per share   |   | $                               | (0.02      | )       |                       | $      | (0.02 | ) |
|                                 |   |                            |       |    |                       |   |   |   |
| Pro forma diluted earnings per share |   | $                               | (0.02      | )       |                       | $      | (0.02 | ) |

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|                                                                                                                        |   | Year Ended      |        |    | Year Ended      |   |    | Year Ended      |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|-----------------|-------------|---------|-----------------|--------|---------|-----------------|--------|
|                                                                                                                        |   | August 31, 2011 |        |    | August 31, 2010 |   |    | August 31, 2009 |   |
|                                                                                                                        |   |            |        |    |            |   |    |            |   |
| Net income (loss) under US GAAP attributed to the owners of the parent and non-controlling interest                         |   | $               | (10,688,209 | )       |            | $      | 252,559 |            |   | $ | 40,890 |   |
|                                                                                                                        |   |            |        |    |            |   |    |            |   |   |   |   |
| Basic and diluted income (loss) per share under US GAAP attributed to the owners of the parent and non-controlling interest |   | $               | (0.15       | )  |            | $      | 0.00    |            |   | $ | 0.00 |   |

|                                             |   | Year Ended      |        |   | Year Ended      |   |       | Year Ended      |   |
|--------------------------------------------------|--------|-----------------|-------------|--------|-----------------|--------|------------|-----------------|--------|
|                                             |   | August 31, 2011 |        |   | August 31, 2010 |   |       | August 31, 2009 |   |
|                                             |   |            |        |   |            |   |       |            |   |
| Net (loss) income under US GAAP                  |   | $               | (10,211,769 | )      |            | $      | 273,599    |            |   | $ | 16,007 |   |
|                                             |   |            |        |   |            |   |       |            |   |   |   |   |
| Weighted average common shares basic             |   |            | 67,229,127  |   |            |   | 65,676,811 |            |   |   | 61,258,923 |   |
| Effect of dilutive stock options and warrants    |   |            | -           |   |            |   | 340,334    |            |   |   | 34,044 |   |
|                                             |   |            |        |   |            |   |       |            |   |   |   |   |
| Weighted average common shares diluted           |   |            | 67,229,127  |   |            |   | 66,017,145 |            |   |   | 61,292,967 |   |
|                                             |   |            |        |   |            |   |       |            |   |   |   |   |
| Basic and diluted income (loss) per common share |   | $               | (0.15       | )      |            | $      | 0.00       |            |   | $ | 0.00 |   |

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|                                                      |   | Year Ended      |    |   | Year Ended      |   |    | Year Ended      |   |
|-----------------------------------------------------------|--------|-----------------|---------|--------|-----------------|--------|---------|-----------------|--------|
|                                                      |   | August 31, 2011 |    |   | August 31, 2010 |   |    | August 31, 2009 |   |
|                                                      |   |            |    |   |            |   |    |            |   |
| Stock option aggregate intrinsic value                    |   | $               | -       |   |            | $      | 8,400   |            |   | $ | 67,400 |   |
|                                                      |   |            |    |   |            |   |    |            |   |   |   |   |
| Weighted average grant-date fair value of options granted |   | $               | 304,300 |   |            | $      | 47,000  |            |   | $ | 52,500 |   |
|                                                      |   |            |    |   |            |   |    |            |   |   |   |   |
| Total intrinsic value of options exercised                |   | $               | -       |   |            | $      | 89,700  |            |   | $ | - |   |
|                                                      |   |            |    |   |            |   |    |            |   |   |   |   |
| Total cash received from options                          |   |            |    |   |            |   |    |            |   |   |   |   |
| exercised                                                 |   | $               | -       |   |            | $      | 195,000 |            |   | $ | - |   |

| Nonvested Stock Options                           |   | Options |       |   | Weighted Average Grant Date Fair Value per Option ($) |   |
|---------------------------------------------------|--------|---------|------------|--------|-------------------------------------------------------|--------|
|                                              |   |    |       |   |                                                  |   |
| Nonvested at August 31, 2008                      |   |    | 1,877,500  |   |                                                  |   | 0.64 |   |
| Granted                                           |   |    | 210,000    |   |                                                  |   | 0.25 |   |
| Vested                                            |   |    | (1,306,250 | )      |                                                  |   | 0.59 |   |
|                                              |   |    |       |   |                                                  |   |   |   |
|                                              |   |    |       |   |                                                  |   |   |   |
| Nonvested at August 31, 2009                      |   |    | 781,250    |   |                                                  |   | 0.25 |   |
| Granted                                           |   |    | 130,000    |   |                                                  |   | 0.36 |   |
| Vested                                            |   |    | (911,250   | )      |                                                  |   | 0.49 |   |
|                                              |   |    |       |   |                                                  |   |   |   |
| Nonvested at August 31, 2010                      |   |    | -          |   |                                                  |   | - |   |
| Granted                                           |   |    | 1,365,000  |   |                                                  |   | 0.22 |   |
| Vested                                            |   |    | (253,000   | )      |                                                  |   | 0.22 |   |
|                                              |   |    |       |   |                                                  |   |   |   |
| Nonvested and expected to vest at August 31, 2011 |   |    | 1,112,000  |   |                                                  |   | 0.22 |   |

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| For the years ending August 31 | 2011   |   | $      | 447,660   |   |
|--------------------------------|--------|--------|--------|-----------|--------|
|                           | 2012   |   |   | 355,175   |   |
|                           | 2013   |   |   | 263,784   |   |
|                           | 2014   |   |   | 263,784   |   |
|                           | 2015   |   |   | 263,784   |   |
|                           |   |   | $      | 1,594,187 |   |

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| Exhibit Number | Description                                                                                                                              |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------|
| 1.1            | Certificate of Incorporation(1)                                                                                                          |
| 1.2            | Articles of Incorporation(1)                                                                                                             |
| 1.3            | Certificate of change of name as filed with British Columbia, Canada on November 14, 2007(2)                                             |
| 1.4            | Notice of Articles(3)                                                                                                                    |
| 4.1            | Toby Chu Employment Agreement(2)                                                                                                         |
| 4.2            | Employment Agreement with Sung Sub Lim(3)                                                                                                |
| 4.3            | Employment Agreement with Steve Sohn(3)                                                                                                  |
| 4.4            | Acquisition Agreement for Concordia Career College(4)                                                                                    |
| 4.5            | Memorandum of Understanding with Thompson River University and Vancouver Career College(4)                                               |
| 4.6            | Form of Cooperative Joint Program Agreements with Institutions for Hotel and Tourism Division(4)                                         |
| 4.7            | Acquisition Agreement for Pan Pacific English College(4)                                                                                 |
| 4.8            | Memorandum of Understanding between Sprott-Shaw and the Ministry of Labour and Social Security of Jamaica(4)                             |
| 4.9            | Memorandum of Understanding between Sprott-Shaw, Brown’s Town College and the Ministry of Labour and Social Security of Jamaica(4) |
| 4.10           | Education Program Cooperation Agreement with Far Eastern University(4)                                                                   |
| 4.11           | Agreement between CIBT and Zhuzhou Technical College(4)                                                                                  |
| 4.12           | Agreement between CIBT and Jinhua Career & Technical College(4)                                                                      |
| 4.13           | Agreement with Zhangzhou Normal University(4)                                                                                            |
| 4.14           | Education Program Cooperation Agreement between CIBT and National Cambridge College(4)                                                   |
| 4.15           | Memorandum of Understanding between Sprott-Shaw and Thang Long University(4)                                                             |
| 4.16           | Cooperation Agreement with China Central Radio and Television University(4)                                                              |
| 4.17           | Memorandum of Understanding between Sprott-Shaw and Hanoi Tourism College(4)                                                             |
| 4.18           | License granted by AHL-EI(4)                                                                                                             |
| 4.19           | Assignment of License to CIBT Education Group(4)                                                                                         |
| 4.20           | Agreement with Weifang University regarding CIBT Beihai Center(4)                                                                        |

| 4.21 | Agreement with Wyotech(1)                                                            |
|------|--------------------------------------------------------------------------------------|
| 4.22 | Agreement with Beijing University of Technology(1)                                   |
| 4.23 | Agreement with ITT Educational Services, Inc. and Weifang University(1)              |
| 4.24 | Acquisition Agreement of Sprott-Shaw(5)                                              |
| 4.25 | Acquisition Agreement of Tourism Training Institute(5)                               |
| 4.26 | Acquisition Agreement of the KGIC Education Group of Companies(6)                    |
| 4.27 | Securities Purchase Agreement with Shane Corp.(1)                                    |
| 4.28 | Agreement and Plan of Reorganization with Shane Corp.(3)                             |
| 4.29 | Memorandum of Understanding with Meridian International Business and Arts College(3) |
| 4.30 | Stock Option Plan (7)                                                                |
| 4.31 | Agreement with Open University of China(7)                                           |
| 4.32 | Global Recruitment Agreement with Southpointe Academy(7)                             |
| 4.33 | Memorandum of Understanding with China Yunnan Radio and TV University(7)             |
| 4.34 | Cooperation Agreement with CIBT and Yunnan International Exchange Centre(7)          |
| 4.35 | Cooperation Agreement with University of Zhejiang Continuing Studies and CIBT(7)     |
| 4.36 | Cooperation Agreement with Guangzhou University and CIBT(7)                          |
| 4.37 | Cooperation Agreement with Zhaoqing University and CIBT(7)                           |
| 4.38 | Agreement between CIBT and Hebei Normal University Foreign Language College(7)       |
| 4.39 | Cooperation Agreement between CIBT and Henan Radio and Television University(7)      |
| 4.40 | Agreement between CIBT and Hunan Radio and Television University(7)                  |
| 4.41 | Agreement with Open University of China re: hospitality management(7)                |
| 4.42 | Agreement with Hainan Human Resources Training Center(7)                             |
| 4.43 | Employment Agreement with Patrick Dang(7)                                            |
| 4.44 | Employment Agreement with Dennis Huang(7)                                            |
| 4.45 | Earn Out Agreement with KGIC Vendors(7)                                              |
| 4.46 | Agreement with the Canadian Institute of Education(7)                                |
| 4.47 | Agreement with Beijing Language and Culture University(7)                            |
| 8.1  | List of Subsidiaries(3)                                                              |
| 11.1 | Code of Ethical Conduct(2)                                                           |
| 11.2 | Insider Trading Policy(4)                                                            |
| 12.1 | CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*         |
| 12.2 | CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*         |
| 13.1 | CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*         |
| 13.2 | CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*         |

| (1)   | Included as exhibits to our Form 20-FR filed May 10, 2007   |
|-----------------|-------------------------------------------------------------|
| (2)   | Included as exhibits to our Form 20-F filed January 2, 2008 |

| (3)   | Included as an exhibit to our Form F-1 filed July 15, 2010  |
|-----------------|-------------------------------------------------------------|
| (4)   | Included as an exhibit to our Form 20-F filed March 1, 2010 |

| (5)   | Included as exhibits to our Form 20-F filed March 17, 2009  |
|-----------------|-------------------------------------------------------------|
| (6)   | Included as an exhibit to our Form 6-K filed March 19, 2010 |

| (7)   | Included as exhibits to our Form 20-F filed March 1, 2012 |
|-----------------|-----------------------------------------------------------|
| *          | Filed hereto                                              |

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| SIGNATURES       |   | TITLE                                       |   | DATE          |
|------------------|--------|---------------------------------------------|--------|---------------|
|             |   |                                        |   |          |
| /s/ Toby Chu     |   | Director, President,Chief Executive Officer |   | June 15, 2012 |
| Toby Chu         |
|             |   |                                        |   |          |
| /s/ Dennis Huang |   | Chief Financial Officer                     |   | June 15, 2012 |
| Dennis Huang     |   |