<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 May 31, 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 July 10, 2000 the registrant had 6,477,417 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...................................................   11

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.................................................................   16

Item 6.   Exhibits and Reports on Form 8-K..................................................   16
</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>
                                                                     May 31, 2000          August 31, 1999
                                                                     ------------          ---------------
                                                                      As Restated
                                                                       See Note 2.
<S>                                                                 <C>                    <C>
           ASSETS
CURRENT ASSETS:
     Cash and cash equivalents                                      $        10,530        $         8,980
     Short-term investments                                                   7,406                  6,027
     Receivables, net                                                         3,151                  1,593
     Prepaid expenses and other current assets                                  897                  1,324
                                                                    ---------------        ---------------
           Total current assets                                              21,984                 17,924
PROPERTY AND EQUIPMENT, net                                                   6,391                  5,617
NON-CURRENT INVESTMENTS                                                       1,085                  2,745
OTHER ASSETS                                                                  1,560                    734
ADVANCES TO JOHN MARSHALL                                                       807                    500
INTANGIBLES, net                                                              6,762                  6,799
                                                                    ---------------        ---------------
           TOTAL ASSETS                                             $        38,589        $        34,319
                                                                    ===============        ===============

           LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
     Current maturities of long-term debt                           $           957        $           486
     Accounts payable                                                         1,024                  1,109
     Accrued payroll and other related liabilities                            1,043                    547
     Accrued expenses                                                         1,073                    417
     Deferred revenue and student deposits                                    4,400                  2,548
                                                                    ---------------        ---------------
           Total current liabilities                                          8,497                  5,107
                                                                    ---------------        ---------------

LONG-TERM DEBT, less current maturities                                       2,656                  2,998

DEFERRED RENT                                                                   717                    610

COMMITMENTS & CONTINGENCIES

STOCKHOLDERS' EQUITY:
     Class A common stock - 30,000,000 shares authorized,
      $.01  par  value, 2,058,430 and 2,000,000 shares issued and
      outstanding at May 31, 2000 and August 31, 1999 respectively               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                                              25,128                 24,871
     Treasury Stock-at cost: 482,000 shares at May 31, 2000,
      none at August 31, 1999                                                (2,131)                     -
     Accumulated other comprehensive income                                     697                    447
     Purchase price in excess of predecessor carryover                         (720)                  (720)
     Retained earnings                                                        3,675                    937
                                                                    ---------------        ---------------
           Total stockholders' equity                                        26,719                 25,604
                                                                    ---------------        ---------------
           TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               $        38,589        $        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              Nine Months Ended
                                                         May 31,         May 31,         May 31,        May 31,
                                                         -------         -------         -------        -------
                                                           2000            1999            2000           1999
                                                           ----            ----            ----           ----
                                                        As Restated                     As Restated
                                                        See Note 2.                     See Note 2.
<S>                                                     <C>              <C>            <C>            <C>
Revenues:
       Tuition and fees, net                              $   11,928     $    9,887     $   32,552     $   26,586
       Other                                                     689            808          2,255          2,529
                                                          ----------     ----------     ----------     ----------
            Total revenues, net                               12,617         10,695         34,807         29,115
                                                          ----------     ----------     ----------     ----------
Operating expenses:
       Cost of education                                       5,285          4,838         15,276         13,593
       Selling expenses                                          900            307          2,733          1,086
       General and administrative expenses                     3,783          2,607         11,296          8,103
       Related party general and administrative expense           -             13              -            668
                                                          ----------     ----------     ----------     ----------
            Total operating expenses                           9,968          7,765         29,305         23,450
                                                          ----------     ----------     ----------     ----------
       Income from operations                                  2,649          2,930          5,502          5,665
Other income (expense):
       Losses attributable to John Marshall                     (442)             -         (1,191)              -
       Interest income                                           206            244            649            557
       Interest expense                                          (79)          (181)          (221)          (504)
       Other income (expense)                                    (15)             -            (64)             -
                                                          ----------     ----------     ----------     ----------
            Total other income (expense), net                   (330)            63           (827)            53
                                                          ----------     ----------     ----------     ----------

Income before provision for income taxes                       2,319          2,993          4,675          5,718
Income taxes:
       Income tax provision on C corporation income              956          1,182          1,936          1,182
       Income tax provision on S corporation income                                                            62
       Deferred income taxes recorded in conjunction
         with termination of S corporation election                -           (764)             -           (764)
                                                          ----------     ----------     ----------     ----------
         Total income taxes                                      956            418            480          1,936
                                                          ----------     ----------     ----------     ----------
Net income                                                $    1,363     $    2,575     $    2,739     $    5,238
                                                          ==========     ==========     ==========     ==========
Net income per share:
       Basic and diluted                                  $     0.21     $     0.38     $     0.42     $     0.95
                                                          ==========     ==========     ==========     ==========
Weighted average shares outstanding:
       Basic                                                   6,476          6,748          6,547          5,523
                                                          ==========     ==========     ==========     ==========
       Diluted                                                 6,478          6,748          6,547          5,523
                                                          ==========     ==========     ==========     ==========
</TABLE>

                                      -4-
<PAGE>

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

<TABLE>
<CAPTION>
                                                                         Nine Months Ended
                                                                                May 31,
                                                                      2000                 1999
                                                                      ----                 ----
                                                                   As Restated
                                                                   See Note 2.
<S>                                                                <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
       Net Income                                                      $  2,739            $  5,238
       Adjustments to reconcile net income to net cash
         provided by operating activities -
            Depreciation and amortization                                 1,103                 961
            Deferred taxes                                                 (246)                  -
            Issuance of stock performance grants                            228                   -
            Losses attributable to John Marshall                          1,191
            Changes in operating assets and liabilities                   1,344               1,002
                                                                      ---------           ---------
                Net cash provided by operating activities                 6,359               7,201
                                                                      ---------           ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchase of property and equipment, net                           (1,600)               (992)
       Business acquisitions, net of cash                                  (247)               (185)
       Sale (purchase) of investments, net                                  560              (5,120)
       Advances (to)/ from related party                                 (1,498)                 33
                                                                      ---------           ---------
                Net cash used in investing activities                    (2,785)             (6,264)
                                                                      ---------           ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Issuance of common stock                                               -              26,040
       Offering costs                                                         -              (1,184)
       Purchase of treasury stock                                        (2,131)                  -
       Borrowing of long-term debt                                          480                 150
       Payments of long-term debt                                          (351)             (5,281)
       Shareholder distribution                                               -             (15,469)
       Repayment of shareholder note                                          -               3,278
       Payments to former owners of acquired businesses                       -                (272)
                                                                      ---------           ---------
                Net cash (used in) provided by financing activities      (2,002)              7,262
                                                                      ---------           ---------
EFFECTIVE EXCHANGE RATE CHANGES ON CASH                                     (22)                (23)
                                                                      ---------           ---------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                 1,550               8,176

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

CASH AND CASH EQUIVALENTS, end of period                              $  10,530           $  10,888
                                                                      =========           =========
</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 nine months ended May 31, 2000 are not necessarily
indicative of results that can be expected for the entire fiscal year.

     The condensed consolidated financial statements as of May 31, 2000 and the
nine months ended May 31, 2000 and May 31, 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 May 31, 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 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 May 31, 2000, we have recognized application,
technology and registration fees as revenue upon receipt. We have estimated the

                                      -6-
<PAGE>

cumulative effect of this accounting change to be approximately $0.2 million as
of May 31, 2000. The effect will be recorded in the of fiscal year 2001.

Note 2. Restatements

     Subsequent to the issuance of the Company's consolidated financial
statements for the quarterly period ended May 31, 2000, it was determined that
the previously reported operating results for three and nine month periods ended
May 31, 2000 were overstated. The accompanying financial statements have been
revised 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 nine months ended May 31,
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 (See 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 nine months
                                                       ended May  31, 2000            ended May 31, 2000

                                                    -------------------------------------------------------
                                                         As             As             As           As
                                                     Previously      Restated      Previously    Restated
                                                      Reported                       Reported
                                                     -----------    ----------     -----------   ----------
<S>                                                  <C>            <C>            <C>           <C>
Net Revenue                                            $12,696        $12,617        $34,886      $ 34,807
                                                     ---------      ---------      ---------      --------
Operating expenses:
    Cost of education                                    5,285          5,285         15,276        15,276
    Selling expenses                                       900            900          2,733         2,733
    General and administrative expenses                  3,702          3,783         11,025        11,296
                                                     ---------      ---------      ---------      --------

       Total operating expenses                          9,887          9,968         29,034        29,305
                                                     ---------      ---------      ---------      --------
       Income from operations                            2,809          2,649          5,852         5,502
                                                     ---------      ---------      ---------      --------
Other income (expense):
    Losses attributable to John Marshall                    --           (442)            --        (1,191)
    Interest income                                        206            206            649           649
    Interest expense                                       (79)           (79)          (221)         (221)
    Other expense                                          (15)           (15)           (64)          (64)
                                                     ---------      ---------      ---------      --------
       Total other income (expense), net                   112           (330)           364          (827)
                                                     ---------      ---------      ---------      --------

       Income before provision for                       2,921          2,319          6,216         4,675
    income taxes
Provision for income taxes                               1,197            956          2,553         1,936
                                                     ---------      ---------      ---------      --------
Net income                                            $  1,724       $  1,363       $  3,663      $  2,739
                                                     =========      =========      =========      ========
Earnings per share
Basic                                                 $   0.27       $   0.21       $   0.56      $   0.42
                                                     =========      =========      =========      ========
Weighted average shares outstanding - basic              6,476          6,476          6,547         6,547

                                                     =========      =========      =========      ========
Diluted                                               $   0.27       $   0.21       $   0.56      $   0.42
                                                     =========      =========      =========      ========
Weighted average shares outstanding - diluted            6,478          6,478          6,547         6,547
                                                     =========      =========      =========      ========
</TABLE>

                                      -7-
<PAGE>

                 ARGOSY EDUCATION GROUP, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
                                                              May 31, 2000
                                                  -----------------------------------
                                                     As Previously
                          ASSETS                        Reported       As Restated
----------------------------------------------    ----------------- -----------------
<S>                                               <C>               <C>
Current Assets:
    Cash and cash equivalents                           $ 10,530         $ 10,530
    Short-term investments                                 7,406            7,406
    Receivables, net                                       3,230            3,151
    Prepaid expenses                                         865              897
                                                   -------------    -------------
                     Total current assets                 22,031           21,984
                                                   -------------    -------------
Property and equipment, net                                6,391            6,391
                                                   -------------    -------------
Other Assets:
    Non-current investments                                1,085            1,085
    Other assets                                             976            1,560
    Advances to John Marshall                              2,269              807
    Intangibles, net                                       6,762            6,762
                                                   -------------    -------------
Total Assets                                            $ 39,514         $ 38,589
                                                   =============    =============

           LIABILITIES AND SHAREHOLDERS' EQUITY
          --------------------------------------
Current Liabilities:
    Current maturities on long-term debt                $    957         $    957
    Accounts payable                                       1,024            1,024
    Accrued payroll and related expenses                   1,043            1,043
    Accrued expenses                                       1,073            1,073
    Deferred revenue                                       4,400            4,400
                                                   -------------    -------------
                    Total current liabilities              8,497            8,497
                                                   -------------    -------------
Long-term debt, less current maturities                    2,656            2,656
                                                   -------------    -------------
Deferred rent                                                717              717
                                                   -------------    -------------
Commitments and contingencies
Shareholders' equity:
    Class A common stock                                      21               21
    Class B common stock                                      49               49
    Treasury stock                                        (2,131)          (2,131)
    Additional paid-in capital                            25,128           25,128
    Accumulated other comprehensive income                   697              697
    Purchase price in excess of predecessor
       carryover basis                                      (720)            (720)
    Retained earnings                                      4,600            3,675
                                                   -------------    -------------
                     Total shareholders' equity           27,644           26,719
                                                   -------------    -------------
Total liabilities and shareholders' equity              $ 39,514         $ 38,589
                                                   =============    =============
</TABLE>

Note 3: Acquisitions

                                      -8-
<PAGE>

     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 has negotiated agreements with the two operating
managers in lieu of future stock issuance as provided for in the acquisition
agreement. The agreements specify an aggregate payout of approximately $150,000
(US Dollars) which was paid prior to May 31, 2000.

     In April 2000, the Washington School of Professional Psychology (WSPP)
gained its regional accreditation from the North Central Association of Colleges
and Schools (NCA) and officially became a regionally accredited campus. This was
the final step in a purchase agreement for WSPP and resulted in a payment of
approximately $100,000 to the former owner.

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). 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 May 31, 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 May 31, 2000, the
Company advanced approximately $500,000 under the line of credit and
approximately $1,498,000 to fund operations under the management agreement.
For the three and nine months ended May 31, 2000 , the losses for John Marshall,
excluding intercompany transactions, of $0.4 million and $1.2 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.


Note 7: Comprehensive Income

                                      -9-
<PAGE>

     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>
                                                   Three Months Ended             Nine Months Ended
                                                   ------------------             -----------------
                                             May 31,            May 31,         May 31,     May 31,
                                             -------            -------         -------     -------
                                               2000               1999            2000        1999
                                               ----               ----            ----        ----
<S>                                         <C>               <C>           <C>             <C>
Net income                                   $     1,363      $    2,575      $   2,739     $   5,238

Other comprehensive income:
   Unrealized gain/(loss) on investments            (170)             17            280           (14)
   Foreign currency translation adjustment            (9)             (4)           (30)           (2)
                                            ----------------------------    -------------------------

Total other comprehensive income                    (179)             13            250           (16)
                                            ----------------------------    -------------------------

Comprehensive income                          $    1,184      $    2,588      $   2,925     $   5,222
                                            ============================    =========================
</TABLE>

     For the period ended May 31, 2000 and May 31, 1999 Accumulated Other
Comprehensive Income, net of tax, was approximately $418,000 and $7,000,
respectively, and would have resulted in a reduction of Comprehensive Income.


Note 8: Segment Reporting

     The Company has two business segments: 1) Schools ("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 nine months
ended May 31, 2000 and May 31, 1999 for these segments (dollars in thousands):

<TABLE>
<CAPTION>
                                     Schools    Test Preparation    Consolidated
                                     -------    ----------------    ------------
<S>                                  <C>        <C>                 <C>
       Three Months Ended
          May 31, 2000
          ------------
Revenue                               $11,697        $   920           $12,617
Income from operations                  2,339            310             2,649
Net Income                              1,209            154             1,363
Total Assets                           34,787          3,802            38,589

       Three Months Ended
          May 31, 1999
          ------------
Revenue                               $ 9,644        $ 1,051           $10,695
Income from operations                  2,510            420             2,930
Net Income                              2,184            391             2,575
Total Assets                           32,836          4,045            36,881

        Nine Months Ended
          May 31, 2000
          ------------
Revenue                               $32,155        $ 2,652           $34,807
Income from operations                  4,723            779             5,502
Net Income                              2,320            419             2,739
Total Assets                           34,787          3,802            38,589

        Nine Months Ended
          May 31, 1999
          -------------
Revenue                               $26,279        $ 2,836           $29,115
Income from operations                  4,728            937             5,665
Net Income                              4,452            786             5,238
Total Assets                           32,836          4,045            36,881
</TABLE>

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

                                      -11-
<PAGE>

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       Nine Months Ended
                                                      May 31,      May 31,     May 31,     May 31,
                                                      -------      -------     -------     -------
                                                       2000         1999         2000        1999
                                                       ----         ----         ----        ----
<S>                                                   <C>          <C>         <C>         <C>
Total revenues, net                                      100%         100%         100%        100%

Operating expenses:
Cost of education                                       41.9         45.2         43.8        46.7
Selling expenses                                         7.1          2.9          7.9         3.7
General and administrative expenses                     30.0         24.4         32.5        27.8
Related party general and administrative expense           -          0.1            -         2.3
                                                        ----         ----         ----        ----

Total operating expenses                                79.0         72.6         84.2        80.5
                                                        ----         ----         ----        ----

Income from operations                                  21.0         27.4         15.8        19.5

Total other income (expense), net                       (2.6)         0.6         (2.4)        0.2
                                                        ----         ----         ----        ----

Income before provision for income taxes                18.4         28.0         13.4        19.7

Provision for income taxes                               7.6          3.9          5.5         1.6
                                                        ----         ----         ----        ----

Net income                                              10.8%        24.1%         7.9%       18.1%
                                                        ====         ====         ====        ====
</TABLE>

Three Months Ended May 31, 2000 Compared to Three Months Ended May 31, 1999

     Net revenues increased 18.0% from $10.7 million in the third quarter of
fiscal 1999 to $12.6 million in the third 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 9.2% from $4.8 million in the third quarter of
fiscal 1999 to $5.3 million in the third 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 campuses and programs. As a percentage
of net revenue, cost of education decreased from 45.2% in fiscal 1999 to 41.9%
in fiscal 2000 due to efficiencies in the student services area.

                                      -12-
<PAGE>

     Selling expenses increased 193.2% from $0.3 million in the third quarter of
fiscal 1999 to $0.9 million in the third quarter of fiscal 2000. As a percentage
of revenue selling expenses increased from 2.9% to 7.1%, primarily 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 45.1% from $2.6 million in
the third quarter of fiscal 1999 to $3.8 million in the third quarter of fiscal
2000 and, as a percentage of net revenue increased from 24.4% to 30.0% from
quarter to quarter. 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. In
addition, charges totaling $0.2 million were recorded in relation to the final
settlement of matters arising in connection with the purchase of MIM and a
settlement of a minor dispute.

     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 $0.01 million in the third quarter
of fiscal 1999. Upon consummation of the Offering, the relationship with the
related company was terminated.

     Other income (expense), changed from income of $0.1 million in fiscal 1999
to expense of $0.3 million in fiscal 2000 due primarily to equity losses
resulting from the Company's investment in John Marshall Law School of $0.4
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 $0.4 million in the third
quarter of fiscal 1999 to $1.0 million in the third quarter of fiscal 2000, due
to the Company's change to a C Corporation on March 8, 1999. Upon the
termination of its S Corporation status in the third quarter of 1999, the
Company recorded a deferred income tax asset and corresponding reduction of
income tax expense of $0.8 million.

     Net income decreased 47.1%, from $2.6 million in the third quarter of
fiscal 1999 to $1.4 million in the third quarter of fiscal 2000 due to the
reasons discussed above.

Nine Months Ended May 31, 2000 Compared to Nine Months Ended May 31, 1999

     Net revenues increased 19.6% from $29.1 million in the first nine months of
fiscal 1999 to $34.8 million in the first nine months of fiscal 2000, primarily
due to increased revenue at all schools owned in the first nine months of both
fiscal 1999 and 2000. For schools owned by the Company during fiscal 1999,
revenue increased by 21.1% primarily due to internal growth. Additional revenue
was recognized from tuition increases and the addition of new campuses and new
programs. Also, the fiscal 1999 totals include revenue from PrimeTech only for
the six months following its acquisition as compared to nine months of revenues
in fiscal 2000.

     Cost of education increased 12.4% from $13.6 million in the first nine
months of fiscal 1999 to $15.3 million in the first nine 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 campuses and programs and the
acquisition of PrimeTech. As a percentage of net revenue, cost of education
decreased from 46.7% in fiscal 1999 to 43.8% in fiscal 2000 due to efficiencies
in the student services area.

     Selling expenses increased 151.7% from $1.1 million in the first nine
months of fiscal 1999 to $2.7 million in the first nine months of fiscal 2000.
As a percentage of revenue, selling expenses increased from

                                      -13-
<PAGE>

3.7% to 7.9% 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 39.4% from $8.1 million in
the first nine months of fiscal 1999 to $11.3 million in the first nine months
of fiscal 2000 and, as a percentage of net revenue increased from 27.8% to
32.5%. The increase is primarily due to additional management payroll costs,
additional expenses incurred as a public company, additional costs of start up
operations, and additional depreciation expense due to the continued investment
in the Company's equipment and computer systems. In addition, charges totaling
$0.2 million were recorded in relation to the final settlement of matters
arising in connection with the purchase of MIM and a settlement of a minor
dispute.

     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 nine
months of fiscal 1999. Upon consummation of the Offering, the relationship with
the related company was terminated.

     Other income (expense), changed from income of $0.1 million in the first
nine months of fiscal 1999 to expense of $0.8 million in the first nine months
of fiscal 2000 due primarily to equity losses resulting from the Company's
investment in John Marshall Law School of $1.2 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 $0.5 million in the first
nine months of fiscal 1999 to $1.9 million in the first nine months of fiscal
2000, due to the Company's change to a C Corporation on March 8, 1999. Upon the
termination of its S Corporation status in the third quarter of 1999, the
Company recorded a deferred income tax asset and corresponding reduction of
income tax expense of $0.8 million. In addition, there was a negligible tax
charge for the first half of fiscal 1999 while the Company was an S Corporation.

     Net income decreased 52.3%, from $5.2 million in the first nine months of
fiscal 1999 to $2.7 million in the first nine months of fiscal 2000 due to the
reasons discussed above.

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 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 decreased from $7.2 million in the nine months ended May 31, 1999 to
$6.4 million in the nine months ended May 31, 2000. The Company had $13.5
million of working capital as of May 31, 2000 compared to $12.8 million of
working capital as of August 31, 1999. Advances made to John Marshall during the
nine months ended May 31, 2000 were approximately $1.5 million.

                                      -14-
<PAGE>

     Capital expenditures increased from $1.0 million in the nine months ended
May 31, 1999 to $1.6 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 May 31, 2000, the Company had advanced
approximately $500,000 under the line of credit and approximately $1.5 million
in operating cash under the management agreement. These advances, net of John
Marshall operating losses, are included in the 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
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

                                      -15-
<PAGE>

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 $3.2 million at May 31, 2000. In addition, at May
31, 2000, the Company has debt in the amount of $0.4 million with interest at
the higher of the Federal Funds Rate plus 0.5% or the lender's rate of interest.
The Company estimates that the fair value of each of its debt instruments
approximated its market value on May 31, 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 May 31, 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 May 31, 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

       None.

Item 5. Other Information

       None.

Item 6. Exhibits and Reports on Form 8-K

   (a)  Exhibits

                                      -16-
<PAGE>


   (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-