<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

                                  FORM 10-Q/A

           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE

                        SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended February 29, 2000

                       Commission file number 000-29820

                         ARGOSY EDUCATION GROUP, INC.
                 (Exact name of registrant as specified in its
                                   charter)



          Illinois                                   36-2855674
  (State or other jurisdiction of                 (I.R.S. Employer
  incorporation or organization)                  Identification No.)


                       Two First National Plaza
                    20 South Clark Street, 3rd Floor
                          Chicago, Illinois 60603
                        Telephone: (312) 899-9900
(Address, including zip code, and telephone number, including area code, of
                        principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                 YES  X     NO

     At April 10, 2000 the registrant had 6,476,430 shares of common stock
outstanding.
<PAGE>

                         ARGOSY EDUCATION GROUP, INC.

                                     INDEX
<TABLE>
<CAPTION>
Description                                                             Page No.
<S>                                                                     <C>
Part I.   Financial Information

Item 1.   Financial Statements

         Condensed Consolidated Balance Sheets.............................   3
         Condensed Consolidated Statements of Operations...................   4
         Condensed Consolidated Statements of Cash Flows...................   5
         Notes to Condensed Consolidated Financial Statements..............   6


Item 2.   Management's Discussion and Analysis of Results of Operations
               and Financial Condition.....................................  12

Item 3.   Quantitative and Qualitative Disclosure About Market Risk........  16

Part II.  Other Information

Item 1.   Legal Proceedings................................................  16

Item 2.   Changes in Securities and Use of Proceeds........................  16

Item 3.   Defaults Upon Senior Securities..................................  16

Item 4.   Submission of Matters to a Vote of Security-Holders..............  16

Item 5.   Other Information................................................  17

Item 6.   Exhibits and Reports on Form 8-K.................................  17
</TABLE>

                                      -2-
<PAGE>

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


                 ARGOSY EDUCATION GROUP, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                            (Amounts in thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                      February 29, 2000                      August 31, 1999
                                                                      -----------------                      ---------------
                                                                         As Restated
                                                                          See Note 2
<S>                                                                   <C>                                    <C>
    ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                                           $           8,042                      $         8,980
  Short-term investments                                                          8,347                                6,027
  Receivables, net                                                                3,127                                1,593
  Prepaid expenses and other current assets                                         906                                1,324
                                                                      -----------------                      ---------------
        Total current assets                                                     20,422                               17,924
PROPERTY AND EQUIPMENT, net                                                       6,488                                5,617
NON-CURRENT INVESTMENTS                                                           1,824                                2,745
OTHER ASSETS                                                                      1,266                                  734
ADVANCES TO JOHN MARSHALL                                                           918                                  500
INTANGIBLES, net                                                                  6,799                                6,799
                                                                      -----------------                      ---------------
        TOTAL ASSETS                                                  $          37,717                      $       $34,319
                                                                      =================                      ===============

        LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Current maturities of long-term debt                                $             913                      $           486
  Accounts payable                                                                1,482                                1,109
  Accrued payroll and other related liabilities                                     858                                  547
  Accrued expenses                                                                  995                                  417
  Deferred revenue and student deposits                                           4,444                                2,548
                                                                      -----------------                      ---------------
        Total current liabilities                                                 8,692                                5,107
                                                                      -----------------                      ---------------

LONG-TERM DEBT, less current maturities                                           2,776                                2,998

DEFERRED RENT                                                                       723                                  610

COMMITMENTS & CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Class A common stock - 30,000,000 shares authorized,
     $.01 par value, 2,000,000 shares issued and outstanding                         21                                   20
  Class B common stock - 10,000,000 shares authorized,
     $.01 par value, 4,900,000 shares issued and outstanding                         49                                   49
  Additional paid-in capital                                                     25,118                               24,871
  Treasury Stock                                                                (2,131)                                    -
  Accumulated other comprehensive income                                            876                                  447
  Purchase price in excess of predecessor carryover                               (720)                                 (720)
  Retained earnings                                                               2,313                                  937
                                                                      -----------------                      ---------------
        Total stockholders' equity                                               25,526                               25,604
                                                                      -----------------                      ---------------
        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    $          37,717                      $        34,319
                                                                      =================                      ===============
</TABLE>


                                      -3-
<PAGE>

                 ARGOSY EDUCATION GROUP, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   (In thousands, except per share amounts)
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                           Three Months Ended                        Six Months Ended
                                                        February 29,   February 28,              February 29,    February 28,
                                                            2000           1999                      2000           1999
                                                            ----            ---                      ----           ----
                                                         As Restated                             As Restated
                                                          See Note 2.                             See Note 2.
<S>                                                     <C>             <C>                      <C>             <C>
Revenues:
  Tuition and fees, net                                 $       9,683   $     7,992              $     20,624    $      16,530
  Other                                                           893         1,087                     1,566            1,890
                                                        -------------   -----------              ------------    -------------
    Total revenues, net                                        10,576         9,079                    22,190           18,420
                                                        -------------   -----------              ------------    -------------
Operating expenses:
  Cost of education                                             4,929         4,504                     9,991            8,755
  Selling expenses                                                795           417                     1,833              778
  General and administrative expenses                           3,586         3,009                     7,513            5,496
  Related party general and administrative expense                  -           231                         -              655
                                                        -------------   -----------              ------------    -------------
    Total operating expenses                                    9,310         8,161                    19,337           15,684
                                                        -------------   -----------              ------------    -------------
  Income from operations                                        1,266           918                     2,853            2,736

Other income (expense):
  Losses attributable to John Marshall                           (570)            -                      (749)               -
  Interest income                                                 228           172                       443              313
  Interest expense                                                (72)         (147)                     (142)            (320)
  Other income (expense)                                          (68)            -                       (49)              (4)
                                                        -------------   -----------              ------------    -------------
    Total other income (expense), net                            (482)           25                      (497)             (11)
                                                        -------------   -----------              ------------    -------------

Income before provision for income taxes                          784           943                     2,356            2,725

Income taxes:
  Income tax provision on C corporation income                    345             -                       980                -
  Income tax provision on S corporation income                      -            38                         -               61
                                                       --------------   -----------              ------------    -------------
    Total provison for income taxes                               345            38                       980               61
                                                       --------------   -----------              ------------    -------------
Net income                                             $          439   $       905              $      1,376    $       2,664
                                                       ==============   ===========              ============    =============
Net income per share:
  Basic and diluted                                    $         0.07   $      0.18              $       0.21    $        0.54
                                                       ==============   ===========              ============    =============
Weighted average shares outstanding:
  Basic and diluted                                             6,472         4,900                     6,583            4,900
                                                       ==============   ===========              ============    =============
</TABLE>

                                      -4-
<PAGE>

                 ARGOSY EDUCATION GROUP, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Amounts in thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                             Six Months Ended
                                                                                     February 29,        February 28,
                                                                                         2000                1999
                                                                                         ----                ----
                                                                                      As Restated
                                                                                      See Note 2.
<S>                                                                                   <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
       Net Income                                                                            $  1,376            $  2,664
       Adjustments to reconcile net income to net cash
         provided by operating activities -
            Depreciation and amortization                                                         663                 607
            Deferred taxes                                                                       (184)                  -
            Issuance of stock performance grants                                                  228                   -
            Losses attributable to John Marshall                                                  749                   -
            Changes in operating assets and liabilities                                         1,825                 597
                                                                                             --------            --------
                Net cash provided by operating activities                                       4,657               3,868
                                                                                             --------            --------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchase of property and equipment, net                                                 (1,368)               (558)
       Business acquisitions, net of cash                                                        (165)               (186)
       (Purchase) sale of investments, net                                                       (948)                479
       Advances (to) from related party                                                        (1,167)                 65
                                                                                              --------           --------
                Net cash used in investing activities                                          (3,648)               (200)
                                                                                              --------           --------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Purchase of treasury stock                                                              (2,131)                  -
       Borrowing of long-term debt                                                                436                 150
       Payments of long-term debt                                                                (231)               (426)
       Shareholder distribution                                                                     -              (1,382)
       Repayment of shareholder note                                                                -               3,278
       Payments to former owners of acquired businesses                                             -                (268)
                                                                                              -------            --------
                Net cash (used in) provided by financing activities                            (1,926)              1,352
                                                                                              -------            --------

EFFECTIVE EXCHANGE RATE CHANGES ON CASH                                                           (21)                 (3)
                                                                                              -------            --------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
                                                                                                 (938)              5,017

CASH AND CASH EQUIVALENTS, beginning of period                                                  8,980               2,712
                                                                                              -------            --------

CASH AND CASH EQUIVALENTS, end of period                                                      $ 8,042            $  7,729
                                                                                              =======            ========
</TABLE>

                                      -5-
<PAGE>

                 ARGOSY EDUCATION GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

Note 1 - The Company and Basis of Presentation

     Argosy Education Group, Inc. (the "Company") is the nation's largest for-
profit provider of doctoral level programs. The Company's mission is to provide
academically oriented practitioner-focused education in fields with numerous
employment opportunities and strong student demand. The Company operates degree
and non-degree granting private, for-profit post-secondary schools devoted to
awarding doctoral and master's degrees in psychology, education and business as
well as bachelor's degrees in business, associate degrees in allied health
professions and diplomas in information technology.

     The accompanying condensed unaudited consolidated financial statements have
been prepared on the same basis as the annual consolidated financial statements
and, in the opinion of management, reflect all adjustments, which include only
normal recurring adjustments, necessary to present fairly the financial
condition and results of operations of the Company. These consolidated financial
statements and notes thereto are unaudited and should be read in conjunction
with the Company's audited financial statements included in the Company's report
on Form 10K, as filed with the Securities and Exchange Commission. The results
of operations for the six months ended February 29, 2000 are not necessarily
indicative of results that could be expected for the entire fiscal year.

     The condensed consolidated financial statements as of February 29, 2000 and
the six months ended February 29, 2000 and February 28, 1999 include the
accounts of the Company and its wholly owned subsidiaries. All intercompany
balances and transactions have been eliminated in consolidation.

     On March 8, 1999 the Company completed an initial public offering of
2,000,000 shares of Class A Common Stock (the "Offering"). Prior to the
Offering, the Company had one class of common stock outstanding. In connection
with the Offering, the Company's existing common stock underwent an approximate
2,941-for-one stock split which was then converted into 4,900,000 shares of
Class B Common Stock. The Company also authorized 30,000,000 shares of Class A
Common Stock and 5,000,000 shares of Preferred Stock. The effect of the stock
split has been retroactively reflected for all periods presented in the
accompanying consolidated financial statements. There was no Preferred Stock
issued or outstanding as of February 29, 2000.

     On December 3, 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin (SAB) No. 101, Revenue Recognition, to provide guidance on
the recognition, presentation, and disclosure of revenue in financial
statements. The SAB outlines basic criteria that must be met before registrants
may recognize revenue, including persuasive evidence of the existence of an
arrangement, the delivery of products or services, a fixed and determinable
sales price, and reasonable assurance of collection. SAB 101 is effective
beginning the first fiscal quarter of the first fiscal year beginning after
December 15, 1999. Prior to the release of SAB 101, our revenue recognition
policy was in compliance with generally accepted accounting principles. In the
fourth quarter of fiscal 2001, we will adopt a change in accounting principle to
comply with the specific provisions and guidance of SAB 101. SAB 101 will
require us to recognize revenue related to application, technology, and
registration fees over the contract period. Through February 29, 2000, we have
recognized application, technology and registration fees as revenue upon
receipt. We are currently in the process of estimating the cumulative effect of
this accounting change and do not believe that this change will have a material
impact on our financial position or operating results. The effect will be
recorded in the fiscal year 2001.

                                      -6-
<PAGE>

2. Restatements

     Subsequent to the issuance of the Company's consolidated financial
statements for the quarterly period ended February 29, 2000, it was determined
that the previously reported operating results for three and six month periods
ended February 29, 2000 were overstated. The accompanying financial statements
have been revised primarily to reflect adjustments to reduce the carrying value
of the Company's advances to John Marshall Law School. It was determined that
the more appropriate accounting for the advances to John Marshall is to treat
this as an equity method investment. The accounting for the advances to John
Marshall has been revised to reduce the amount of the advances to John Marshall
to reflect John Marshall's operating losses during the three and six months
ended February 29, 2000. The 2000 financial statements were restated to give
effect to the revised accounting for the John Marshall advances from the point
in time that the management agreement (Note 6) was in place (September 1, 1999).


A summary of the effects of the restatements follows (dollars in thousands):


<TABLE>
<CAPTION>
                                                   For the three months              For the six months
                                                          ended                            ended
                                                    February 29, 2000                 February 29, 2000
                                                -------------------------------------------------------
                                                    As             As              As            As
                                                Previously      Restated       Previously     Restated
                                                 Reported                       Reported
                                                ----------      --------       ----------     --------
<S>                                             <C>             <C>            <C>            <C>
Net Revenue                                     $  10,576       $ 10,576       $  22,190      $ 22,190
                                                ---------       --------       ---------      --------
Operating expenses:
 Cost of education                                  4,929          4,929           9,991         9,991
 Selling expenses                                     795            795           1,833         1,833
 General and administrative expenses                3,498          3,586           7,323         7,513
                                                ---------       --------       ---------      --------
     Total operating expenses                       9,222          9,310           9,147        19,337
                                                ---------       --------       ---------      --------
     Income from operations                         1,354          1,266           3,043         2,853
                                                ---------       --------       ---------      --------
Other income (expense):

 Losses attributable to John                           --           (570)             --          (749)
  Marshall
 Interest income                                      228            228             443           443
 Interest expense                                     (72)           (72)           (142)         (142)
 Other expense                                        (68)           (68)            (49)          (49)
                                                ---------       --------       ---------      --------
     Total other income (expense), net                 88           (482)            252          (497)
                                                ---------       --------       ---------      --------
     Income before provision for
      income taxes                                  1,442            784           3,295         2,356

Provision for income taxes                            608            345           1,356           980
                                                ---------       --------       ---------      --------
Net income                                      $     834       $    439       $   1,939      $  1,376
                                                =========       ========       =========      ========
Earnings per share
Basic                                           $    0.13       $   0.07       $    0.29      $   0.21
                                                =========       ========       =========      =======
Weighted average shares                             6,472          6,472           6,583         6,583
                                                =========       ========       =========      =======
 outstanding - basic
Diluted                                         $    0.13       $   0.07       $    0.29      $   0.21
                                                =========       ========       =========      =======
Weighted average shares                             6,472          6,472           6,583         6,583
                                                =========       ========       =========      =======
 outstanding - diluted
</TABLE>

                                      -7-
<PAGE>

                 ARGOSY EDUCATION GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
                                                                     February 29, 2000
                                                       ------------------------------------------
                                                            As
                                                        Previously
                   ASSETS                                 Reported                    As Restated
---------------------------------------------          ------------                   -----------
<S>                                                    <C>                            <C>
Current Assets:
 Cash and cash equivalents                               $    8,042                     $   8,042
 Short-term investments                                       8,347                         8,347
 Receivables, net                                             3,127                         3,127
 Prepaid expenses                                               906                           906
                                                         ----------                     ---------
           Total current assets                              20,422                        20,422
                                                         ----------
Property and equipment, net                                   6,488                         6,488
                                                         ----------                     ---------
Other Assets:
 Non-current investments                                      1,824                         1,824
 Other assets                                                   890                         1,266
 Advances to John Marshall                                    1,857                           918
 Intangibles, net                                             6,799                         6,799
                                                         ----------                     ---------
Total Assets                                             $   38,280                     $  37,717
                                                         ==========                     =========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current Liabilities:
 Current maturities on long-term debt                    $      913                     $     913
 Accounts payable                                             1,482                         1,482
 Accrued payroll and related expenses                           858                           858
 Accrued expenses                                               995                           995
 Deferred revenue                                             4,444                         4,444
                                                         ----------                     ---------
           Total current liabilities                          8,692                         8,692
                                                         ----------                     ---------
Long-term debt, less current maturities                       2,776                         2,776
                                                         ----------                     ---------
Deferred rent                                                   723                           723
                                                         ----------                     ---------
Commitments and contingencies
Shareholders' equity:
 Class A common stock                                            21                            21
 Class B common stock                                            49                            49
 Additional paid-in capital                                  25,118                        25,118
 Treasury stock                                              (2,131)                       (2,131)
Accumulated other comprehensive income                          876                           876
 Purchase price in excess of predecessor carryover             (720)                         (720)
  basis
 Retained earnings                                            2,876                         2,313
                                                         ----------                     ---------
           Total shareholders' equity                        26,089                        25,526
                                                         ----------                     ---------
Total liabilities and shareholders' equity               $   38,280                     $  37,717
                                                         ==========                     =========
</TABLE>

                                      -8-
<PAGE>

Note 3: PrimeTech Acquisition

On November 30, 1998, the Company acquired 100% of the outstanding stock of
PrimeTech, which owns two Canadian schools that award non-degree certificates in
network engineering and software programming.  Prior to that acquisition the
majority shareholder of the Company owned a one-third interest in PrimeTech.
Under the acquisition agreement, the Company was required to pay the former
owners, consisting of Dr. Markovitz and two operating managers, a total of
$500,000 (Canadian Dollars) upon closing and is obligated to issue shares of the
Company's common stock, the fair value of which is equal to 102% of PrimeTech's
net income, as defined in such agreement, in each of PrimeTech's next three
fiscal years.  The Company is negotiating agreements with such persons in lieu
of future payments per the acquisition agreement.  The agreements contemplate an
aggregate payout of approximately $200,000 (US Dollars).

Note 4 - Income Taxes

     Prior to the Offering completed on March 8, 1999, the Company included its
income and expenses with those of its shareholders for Federal and certain state
income tax purposes (an S Corporation election). Accordingly, the consolidated
statement of operations for the three months and six months ended February
28,1999 do not include a provision for Federal income taxes. In connection with
the Offering, the Company terminated its S Corporation status and recorded a
deferred income tax asset and corresponding reduction of income tax expense of
$764,222, arising from a change in the Company's tax status. Beginning March 8,
1999, the Company has provided for deferred income taxes under the asset and
liability method of accounting. This method requires the recognition of deferred
income taxes based upon the tax consequences of "temporary differences" by
applying enacted statutory tax rates applicable to future years to differences
between financial statements carrying amounts and the tax basis of existing
assets and liabilities.

Note 5: Shareholders' Equity

     The Company adopted a repurchase program for the Company's Class A Common
Stock of up to 500,000 shares.  Shares of Class A Common Stock will be purchased
by the Company from time to time through open market purchases and private
purchase, as available.  Under this program, the Company has repurchased 482,000
shares as of February 29, 2000 at a total cost of approximately $2,131,000.

Note 6: Related-Party Transactions

     As of September 1, 1999 the Company entered into an agreement to manage the
John Marshall Law School of Atlanta, Georgia ("John Marshall").  The agreement
is for 10 years and includes an option to purchase John Marshall.  The right can
be exercised at the Company's discretion.  In addition, a line of credit of
$600,000 was established between the Company and John Marshall.  As of February
29, 2000, the Company advanced approximately $500,000 under the line of credit
and approximately $1,167,000 under the management agreement, the amounts are
included in other long term assets. For the three and six months ended February
28, 2000 , the losses for John Marshall, excluding intercompany transactions, of
$0.6 million and $0.7 million, respectively, have been included as other
expenses in the Company's statements of operations and have been reflected as a
reduction of the advances made to John Marshall.

                                      -9-
<PAGE>

Note 7: Comprehensive Income

     On September 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"), which
requires companies to report all changes in equity during a period, except those
resulting from investment by owners and distributions to owners, in a financial
statement for the period in which they are recognized.  The disclosure of
comprehensive income and accumulated other comprehensive income is as follows:

<TABLE>
<CAPTION>
                                                           Comprehensive               Accumulated Other
                                                               Income                    Comprehensive
                                                                                    Income/(Loss)- Foreign
                                                                                     Currency Translation
                                                                                          Adjustment
                                                        -------------------         ------------------------
<S>                                                     <C>                         <C>
Balance August 31, 1998                                                             $                      2
Net income for the six months ended February 28, 1999   $             2,664
Other Comprehensive Income -                                              2                                2
   Foreign currency translation adjustment
Unrealized loss on investments                                          (31)                             (31)
                                                        -------------------         ------------------------


Comprehensive income for the six months
    Ended February 28, 1999                             $             2,635
                                                        ===================
Balance, February 28, 1999                                                          $                    (27)
                                                                                    ========================

Balance August 31, 1999                                                             $                    447
Net income for the six months ended February 29, 2000   $             1,376
Other Comprehensive Income -                                            (21)                             (21)
   Foreign currency translation adjustment
                                                                        450                              450
  Unrealized gain on investments                        -------------------         ------------------------


Comprehensive income for the six months
    Ended February 29, 2000                             $             1,805
                                                        ===================         ------------------------
Balance, February 29, 2000                                                          $                    876
                                                                                    ========================
</TABLE>

The accumulated other comprehensive income balance has been restated to conform
to the SFAS No. 130 requirements.

Note 8: Segment Reporting

     The Company has two business segments: 1) Schools and 2) Test Preparation
Materials and Workshops ("Test Preparation").  These segments are managed as
separate strategic business units due to the distinct nature of their
operations.  The Schools Segment, which represents the operations of ASPP, U of
S, MIA and PrimeTech, provides programs in psychology, education, business,
allied health professions, network engineering and software programming.  All
operations of the Schools Segment are located in the United States with the
exception of PrimeTech which is located in Canada.  The Test Preparation Segment
offers courses and materials for post-graduate psychology and counseling license
examinations and is located in the United States.

                                      -10-
<PAGE>

     The following table presents financial data for the three and six months
ended February 29, 2000 and February 28, 1999 for these segments (dollars in
thousands):

<TABLE>
<CAPTION>
                                   Schools        Test Preparation        Consolidated
                                   -------        ----------------        ------------
      Three Months Ended
      February 29, 2000
      ------------------
<S>                                <C>            <C>                     <C>
Revenue                            $ 9,709             $       867              $10,576
Income from operations               1,036                     230                1,266
Net Income                             309                     130                  439
Total Assets                        33,810                   3,907               37,717

      Three Months Ended
      February 28, 1999
      ------------------
Revenue                            $ 8,191             $       888              $ 9,079
Income from operations                 649                     269                  918
Net Income                             692                     213                  905
Total Assets                        22,207                   5,005               27,212

      Six Months Ended
      February 29, 2000
      -----------------
Revenue                            $20,458             $     1,732              $22,190
Income from operations               2,384                     469                2,853
Net Income                           1,111                     265                1,376
Total Assets                        33,810                   3,907               37,717

      Six Months Ended
      February 28, 1999
      ------------------
Revenue                            $16,635             $     1,785              $18,420
Income from operations               2,219                     517                2,736
Net Income                           2,269                     395                2,664
Total Assets                        22,207                   5,005               27,212
</TABLE>

                                      -11-
<PAGE>

Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition

     This Quarterly Report on Form 10-Q contains statements that may constitute
"forward-looking statements" as defined by the U.S. Private Securities
Litigation Reform Act of 1995. Such forward-looking statements can be identified
by the use of forward-looking terminology such as "believes," "estimates,"
"anticipates," "continues," "contemplates," "expects," "may," "will," "could,"
"should" or "would," or the negatives thereof. Those statements are based on the
intent, belief or expectation of the Company as of the date of this Quarterly
Report. Any such forward-looking statements are not guarantees of future
performance and may involve risks and uncertainties that are outside the control
of the Company. Results may differ materially from the forward-looking
statements contained herein as a result of changes in governmental regulations,
including those governing student financial aid, and other factors. The Company
expressly disclaims any obligation to release publicly any updates or revisions
to any forward-looking statement contained herein to reflect any change in the
Company's expectations with regard thereto or any change in events, conditions
or circumstances on which any such statement is based. The following discussion
of the Company's results of operations and financial condition should be read in
conjunction with the interim unaudited condensed financial statements of the
Company and the notes thereto included herein and in conjunction with the
information contained in the Form 10K as filed with the Securities and Exchange
Commission.

     As more fully described in Note 2. to the Consolidated Financial Statements
(and in the Companies annual report on Form 10K/A for the year ended August 31,
2000) certain financial information in the filing has been restated to correct
previously issued financial statements . The discussion in this item reflects
those restatements.

     Results of Operations

The following table summarizes the Company's operating results as a percentage
of net revenue for the period indicated:

<TABLE>
<CAPTION>
                                                         Three Months Ended                     Six Months Ended
                                                   February 29,       February 28,       February 29,      February 28,
                                                 --------------     --------------       ------------      ------------
<S>                                              <C>                <C>                  <C>               <C>
                                                      2000               1999                2000               1999
                                                      ----               ----                ----               ----

Total revenues, net                                         100%               100%               100%              100%

Operating expenses:
Cost of education                                          46.6               49.6               45.0              47.5
Selling expenses                                            7.5                4.6                8.3               4.2
General and administrative expenses                        33.9               33.1               33.9              29.8
Related party general and administrative                      -                2.6                  -               3.6
 expense                                                   ----               ----               ----              ----

Total operating expenses                                   88.0               89.9               87.2              85.1
                                                           ----               ----               ----              ----

Income from operations                                     12.0               10.1               12.8              14.9

Total other income (expense), net                          (4.6)               0.3               (2.2)             (0.1)
                                                           ----               ----               ----              ----

Income before provision for income taxes                    7.4               10.4               10.6              14.8

Provision for income taxes                                  3.2                0.4                4.4               0.3
                                                           ----               ----               ----              ----

Net income                                                  4.2%              10.0%               6.2%             14.5%
                                                           ====               ====               ====              ====
</TABLE>

                                      -12-
<PAGE>

Three Months Ended February 29, 2000 Compared to Three Months Ended February 28,
1999

     Net revenues increased 16.5% from $9.1 million in the second quarter of
fiscal 1999 to $10.6 million in the second quarter of fiscal 2000, due to
increased revenue at all schools, primarily ASPP.  For all schools owned by the
Company during fiscal 1999, the revenue increase is primarily due to internal
growth, tuition increases and the addition of new campuses and new programs.

     Cost of education increased 9.4% from $4.5 million in the second quarter of
fiscal 1999 to $4.9 million in the second quarter of fiscal 2000, due to
additional teaching costs to meet the growth in the number of students attending
the schools, and the development of new programs.  As a percentage of net
revenue, cost of education decreased from 49.6% in fiscal 1999 to 46.6% in
fiscal 2000 due to efficiencies in the student services area.

     Selling expenses increased 90.6% from $0.4 million in the second quarter of
fiscal 1999 to $0.8 million in the second quarter of fiscal 2000.  As a
percentage of revenue, selling expenses increased from 4.6% to 7.5% due to the
addition of recruiters in all of the Argosy schools.  This is an integral part
of our marketing strategy.

     General and administrative expenses increased 19.2% from $3.0 million in
the second quarter of fiscal 1999 to $3.6 million in the second quarter of
fiscal 2000 and, as a percentage of net revenue increased from 33.1% to 33.9% in
the second quarter of fiscal 2000.  The dollar increase is primarily due to
additional expenses incurred as a public company, additional management payroll
costs, additional costs of start up operations, and additional depreciation
expense due to the continued investment in the Company's equipment and computer
systems.

     Related party general and administrative expenses, which represents amounts
paid to a company owned by the majority shareholder that provided management
services for the Company and its schools, was $0.2 million in the second quarter
of fiscal 1999.  Upon consummation of the Offering, the relationship with the
related company was terminated.

     Other income (expense), net, changed from $0.03 million of income in the
second quarter of fiscal 1999 to $0.5 million of expense in the second quarter
of fiscal 2000 due to equity losses relating to the Company's investment in John
Marshall Law School of $0.6 million offset by an increase in net interest income
attributable to proceeds from the initial public offering used to reduce debt.

     The provision for income taxes increased from $0.03 million in the second
quarter of fiscal 1999 to $0.3 million in the second quarter of fiscal 2000, due
to the Company's change to a C Corporation on March 8, 1999.  There was a
negligible tax charge for the second quarter of fiscal 1999 while the Company
was an S Corporation.

     Net income decreased 51.5%, from $0.9 million in the second quarter of
fiscal 1999 to $0.4 million in the second quarter of fiscal 2000; due primarily
to start up operations at three campuses and the start up of the internet
campus, additional general and administrative expenses as relates to a public
company, higher income taxes due to a change in the tax status of the Company
and equity losses related to the Company's investment in John Marshall Law
School.  This was offset by the increased profitability at existing schools and
the elimination of related party general and administrative expenses.

Six Months Ended February 29, 2000 Compared to Six Months Ended February 28,
1999

     Net revenues increased 20.5% from $18.4 million in the first six months of
fiscal 1999 to $22.2 million in the first six months of fiscal 2000, primarily
due to additional net revenue from the acquisition of

                                      -13-
<PAGE>

PrimeTech and increased revenue at all schools owned in the first six months of
both fiscal 1999 and 2000. For schools owned by the Company during fiscal 1999,
revenue increased by 17.9% primarily due to internal growth. Additional revenue
was recognized from tuition increases and the addition of new campuses and new
programs.

     Cost of education increased 14.1% from $8.8 million in the first six months
of fiscal 1999 to $10.0 million in the first six months of fiscal 2000, due to
additional teaching costs to meet the growth in the number of students attending
the schools, the development of new programs and the acquisition of PrimeTech.
As a percentage of net revenue, cost of education decreased from 47.5% in fiscal
1999 to 45.0% in fiscal 2000 due to efficiencies in the student services area.

     Selling expenses increased 135.6% from $0.8 million in the first six months
of fiscal 1999 to $1.8 million in the first six months of fiscal 2000.  As a
percentage of revenue, selling expenses increased from 4.2% to 8.3% due to the
addition of recruiters in all of the Argosy schools.  This is an integral part
of our marketing strategy.  In addition, the acquisition of PrimeTech requires
more costly advertising media than the other Argosy companies.

     General and administrative expenses increased 36.7% from $5.5 million in
the first six months of fiscal 1999 to $7.5 million in the first six months of
fiscal 2000 and, as a percentage of net revenue increased from 29.8% to 33.9%.
The increase is primarily due to additional expenses incurred as a public
company, additional management payroll costs, additional costs of start up
operations, and additional depreciation expense due to the continued investment
in the Company's equipment and computer systems.


     Related party general and administrative expenses, which represents amounts
paid to a company owned by the majority shareholder that provided management
services for the Company and its schools, was $0.7 million in the first six
months of fiscal 1999.  Upon consummation of the Offering, the relationship with
the related company was terminated.

     Other income (expense), net increased from $0.01 million of expense in the
first six months of fiscal 1999 to $0.5 million of expense in the first six
months of fiscal 2000 due to equity losses relating to the Company's investment
in John Marshall Law School of $0.7 million offset by decreases in interest
expense due to the use of proceeds from the initial public offering to reduce
debt.

     The provision for income taxes increased from $0.06 million in the first
six months of fiscal 1999 to $1.0 million in the first six months of fiscal
2000, due to the Company's change to a C Corporation on March 8, 1999.  There
was a negligible tax charge for the first six months of fiscal 1999 while the
Company was an S Corporation.

     Net income decreased 48.3%, from $2.7 million in the first six months of
fiscal 1999 to $1.4 million in the first six months of fiscal 2000; due
primarily to start up operations at three campuses and the start up of the
internet campus, additional general and administrative expenses as relates to a
public company and higher income taxes due to a change in the tax status of the
Company. In addition the Company recorded  equity losses relating to the
Company's investment in John Marshall Law School. These reductions in operating
income were offset by the increased profitability at existing schools and the
elimination of related party general and administrative expenses.

Seasonality and Other Factors Affecting Quarterly Results

     The Company has experienced seasonality in its results of operations
primarily due to the pattern of student enrollments at most of the Company's
schools.  Historically, the Company's lowest quarterly net

                                      -14-
<PAGE>

revenue and income have been in the fourth fiscal quarter (June through August)
due to lower student enrollment during the summer months at most of the
Company's schools, while the Company's expenses remain relatively constant over
the course of a year. The Company expects that this seasonal trend will continue
and that operating results for any quarter are not necessarily indicative of the
results for any future period.

Liquidity and Capital Resources

     Since its formation, the Company has financed its operating activities
primarily through cash generated from operations.  Acquisitions have been
financed primarily through debt instruments.  Net cash provided by operating
activities increased from $3.9 million in the six months ended February 28, 1999
to $4.7 million in the six months ended February 29, 2000.  The Company had
$11.7 million of working capital as of February 29, 2000 compared to $12.8
million of working capital as of August 31, 1999.  Advances to John Marshall
approximate $1.2 million for the six months ending February 29, 2000.

     Capital expenditures increased from $0.6 million in the six months ended
February 28, 1999 to $1.4 million in the same period in 2000. The increase was
due to the investment in continued upgrading of school equipment and facilities,
the enhanced capabilities of the Company's computer system, and the investment
in the start up of an internet campus. Capital expenditures are expected to
continue to increase as the student population increases and the Company
continues to upgrade and expand current facilities and equipment. The Company
has no other commitments for material capital expenditures.

     The Company entered into a long-term management arrangement with John
Marshall Law School of Atlanta, Georgia in September 1999. The arrangement
includes a management agreement, a 10-year option to purchase John Marshall
exercisable at the Company's discretion and a line of credit of $600,000 between
the Company and John Marshall.  As of ,February 29, 2000 the Company had
advanced approximately $500,000 under the line of credit and approximately $1.2
million in operating cash under the management agreement. These advances, net of
John Marshall operating losses, are included in other long term assets.

Year 2000 Compliance

     The "Year 2000 Problem" is the potential for computer processing errors
resulting from the use of computer programs that have been written using two
digits, rather than four, to denote a year (e.g., using the digits "98" to
denote 1998). Computer programs using this nomenclature can misidentify
references to dates after 1999 as meaning dates early in the twentieth century
(e.g., "1902" rather than "2002"). The Year 2000 Problem is commonly
considered to be prevalent in computer programs written as recently as the mid-
1990s, and can cause such programs to generate erroneous information, to
otherwise malfunction or to cease operations altogether.

     The Company has installed a new management information system in its
corporate headquarters.  In addition, the Company's schools each have stand-
alone computer systems and networks for internal use and for communication with
its students and with corporate headquarters.  Since January 1, 2000,  there
have been no material adverse affects related to the Year 2000 Problem.
However, there can be no assurance that this new computer system will not still
be affected by the Year 2000 Problem and that the Company's existing systems
will not still be affected by the Year 2000 Problem, or that a failure of any
other parties, such as the DOE or other government agencies on which the Company
depends for student financial assistance or the financial institutions involved
in the processing of student loans, to address the Year 2000 Problem will not
have a material adverse effect on the Company's business, results of operations
or financial condition.  In particular, there can be no assurance that
malfunctions relating to the Year 2000 Problem will not result in the
misreporting of financial information by the Company.  The Company has made
inquiries of substantially all of its material vendors regarding the Year 2000
Problem and has not detected any significant

                                      -15-
<PAGE>

issues relating to the Year 2000 Problem. However, the Company has not made a
formal assessment of the computer programs used by government agencies or other
first parties with which the company interacts, or an assessment of its own
vulnerability to the failure of such programs to be free of the Year 2000
Problem. The Company does not have any formal contingency plans relating to the
Year 2000 Problem.

     The Company believes that the most reasonably likely worst case scenario
for the Company regarding the Year 2000 Problem is a failure of the DOE to
adequately ensure payment of financial aid amounts.  The 1998 Amendments require
the DOE to take steps to ensure that the processing, delivery and administration
of grant, loan and work assistance provided under the Title IV Programs are not
interrupted because of the Year 2000 Problem.  This legislation also authorizes
the DOE to postpone certain HEA requirements to avoid overburdening institutions
and disrupting the delivery of student financial assistance as a consequence of
this problem.  To date, we do not believe that the DOE has experienced any
disruptions associated with the Year 2000 Problem, and our students have not
experienced any delays in tuition payments as a result of the Year 2000 Problem.
There can be no assurance, however, that assistance will not be interrupted or
that any DOE requirements would be postponed so that there would be no material
adverse effect on the Company's schools.


Item 3. Quantitative and Qualitative Disclosure About Market Risk

     The Company is exposed to the impact of interest rate changes, foreign
currency fluctuations and changes in the market value of its investments.  The
Company does not utilize interest rate swaps, forward or option contracts on
foreign currencies or commodities, or other types of derivative financial
instruments.  The Company has debt with fixed annual rates of interest ranging
from 6.25% to 9.0% totaling $3.7 million at February 29, 2000.  The Company
estimates that the fair value of each of its debt instruments approximated its
market value on February 29, 2000.

     The Company is subject to fluctuations in the value of the Canadian dollar
vis-a-vis the U.S. dollar. The fair value of the assets and liabilities of these
operations approximated current market rates at February 29, 2000.

     From time to time, the Company invests excess cash in marketable
securities.  These investments principally consist of U.S. Treasury notes,
corporate bonds, short-term commercial paper and money market accounts, the fair
value of which approximated current market rates at February 29, 2000.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

     None.

Item 2. Changes in Securities and Use of Proceeds

     None.

Item 3.  Defaults Upon Senior Securities

     None.

Item 4.  Submission of Matters to a Vote of Security-Holders

                                      -16-
<PAGE>

(a)  Our annual meeting of stockholders was held on January 28, 2000.

(b)  Our stockholders voted as follows to elect seven directors to our board of
     directors:

<TABLE>
<CAPTION>
       Directors                       For                            Against
       ---------                       ---                            -------
                             Class A          Class B          Class A         Class B
                            ---------        ---------        ---------        -------
<S>                         <C>              <C>              <C>              <C>
Michael C. Markovitz        1,853,763        4,900,000           6,235            -
Harold J. O'Donnell         1,853,763        4,900,000           6,235            -
Theodore J. Herst           1,853,763        4,900,000           6,235            -
Karen M. Knab               1,853,763        4,900,000           6,235            -
Michael W. Mercer           1,853,763        4,900,000           6,235            -
Kalman K. Shiner            1,853,763        4,900,000           6,235            -
Leslie M. Simmons           1,853,763        4,900,000           6,235            -
</TABLE>

     All of the directors' terms expired as of the annual meeting and therefore
all of the directors were up for re-election at the annual meeting.

(c)  Our stockholders voted as follows to ratify the appointment of Arthur
Andersen LLP as independent auditors of our financial statements for the year
ended August 31, 2000:

<TABLE>
<CAPTION>
            For                         Against                        Abstain
            ---                         -------                        -------
  Class A         Class B         Class A        Class B         Class A         Class B
 ---------       ---------       --------        -------         -------         -------
 <S>             <C>             <C>             <C>             <C>             <C>
 1,854,779       4,900,000         2,934            -             2,285             -
</TABLE>

Item 5.  Other Information

         None.

Item 6.  Exhibits and Reports on Form 8-K:

    (a)  Exhibits

    (b)  Reports on Form 8-K:

         None

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

ARGOSY EDUCATION GROUP, INC.


March 26, 2001                                  /s/ Charles T. Gradowski
                                                -------------------------
                                                Charles T. Gradowski
                                                Chief Financial Officer

                                      -17-