**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-K/A**

| x | Annual                  Report Pursuant to Section 13 or 15(d) of the Securities Exchange                  Act of                  1934 **for                  the fiscal year ended December 31,                  2006** |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | Transition                Report under Section 13 of 15(d) of the Securities Exchange Act of                1934 |
|---|------------------------------------------------------------------------------------------------------------------|

**EVCI      Career Colleges Holding Corp.**

| Delaware                                       | 06-1488212                                          |
|------------------------------------------------|-----------------------------------------------------|
| (State                or other jurisdiction of | (I.R.S.                Employer Identification No.) |
| incorporation                or organization)  |                                                |

| Title                of each class                                        | Name                of each exchange on which registered                       |
|---------------------------------------------------------------------------|--------------------------------------------------------------------------------|
| common                stock,$**.**0001                par value per share | The                Nasdaq Stock Market LLCBoston                Stock Exchange |

----

| Large                  accelerated filer o  | Accelerated                  filer o | Non-accelerated                  filer x |
|-------------------------------------------------------|-------------------------------------------|------------------------------------------|

----

**Explanatory        Note**

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**EVCI      CAREER COLLEGES HOLDING CORP.**

**Form      10-K**

**Year      Ended December 31, 2006**

**TABLE      OF CONTENTS**

| **Item**                     |                                                                     | **Page**                                           |
|------------------------------|--------------------------------------------------------------------------|----------------------------------------------------|
| **PART                  I**  |
| **1.**                       | Description                  of Business                                 |                                               | 1 |
|                         |                                                                     | General                                            |   | 1 |
|                         |                                                                     | About                  EVCI                        |   | 1 |
|                         |                                                                     | Significant                  Developments          |   | 2 |
|                         |                                                                     | Target                  Market                     |   | 11 |
|                         |                                                                     | Availability                  of Grants and Loans  |   | 11 |
|                         |                                                                     | Tuition                                            |   | 14 |
|                         |                                                                     | Enrollments                                        |   | 14 |
|                         |                                                                     | Our                  Operating Strategy            |   | 15 |
|                         |                                                                     | Our                  Growth Strategy               |   | 19 |
|                         |                                                                     | Marketing                                          |   | 20 |
|                         |                                                                     | Accreditation                                      |   | 20 |
|                         |                                                                     | Regulation                  of Proprietary Schools |   | 21 |
|                         |                                                                     | Competition                                        |   | 27 |
|                         |                                                                     | Employees                                          |   | 28 |
| **1A.**                      | Risk                  Factors                                            |                                               | 29 |
| **1B.**                      | Unresolved                  Staff Comments                               |                                               | 46 |
| **2.**                       | Description                  of Property                                 |                                               | 46 |
| **3.**                       | Legal                  Proceedings                                       |                                               | 47 |
| **4.**                       | Submission                  of Matters to a Vote of Security Holders     |                                               | 48 |
|                         |                                                                     |                                               |   |   |
| **PART                  II** |
|                         |                                                                     |                                               |   |   |
| **5.**                       | Market                  for Common Equity, Related Stockholder           |                                               |   |
|                         | Matters                and Issuer Purchases of Equity Securities         |                                               | 48 |
| **6.**                       | Selected                  Financial Data                                 |                                               | 49 |
| **7.**                       | Management’s                  Discussion and Analysis of Financial |                                               |   |
|                         | Condition                and Results of Operations                       |                                               | 50 |
| **7A.**                      | Quantitative                  and Qualitative Disclosures About          |                                               |   |
|                         | Market                Risk                                               |                                               | 66 |
| **8.**                       | Financial                  Statements                                    |                                               | 67 |
| **9.**                       | Changes                  in and Disagreements with Accountants on        |                                               |   |
|                         | Accounting                and Financial Disclosures                      |                                               | 67 |
| **9A.**                      | Controls                  and Procedures                                 |                                               | 67 |
| **9B.**                      | Other                  Information                                       |                                               | 68 |

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| **PART                  III**            |
|------------------------------------------|
|                                     |   |   |   |   |
| **10,                  11, 12 and 14**   |   | 69 |
|                                     |   |   |   |
|   **PART                  IV** |
|                                     |
| **15**.                                  | Exhibits                  and Financial Statement Schedules |   | 69 |
|                                     |   |   |   |   |
| **SIGNATURES**                           |   | 80 |

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**PART      I**

**Item      1.**
**      Description of Business.**

**General**

*TCI*

*Interboro.*

*PSB.*

**About      EVCI**

----

**Significant      Developments**

*ComVest      Financing*

|   | · | Interest                accrues at 12% per annum. The first 12 months of interest of $1,048,365                will be accrued upon issuance of the ComVest Note and added to                principal. If an event of default occurs under the ComVest Note,                interest accrues at 24% per annum. To the extent permitted by law,                the                accrued interest will accrue interest at 12% per annum compounded                quarterly. After June 30, 2008, regularly scheduled cash payments                of                interest can be made provided EVCI satisfies certain financial                covenants. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Matures                the earlier of 36 months after issuance or the date more than 50%                of the                voting power of EVCI is acquired by a person or group other than                ComVest.                Events of default that would permit ComVest to accelerate the maturity                date include the failure of EVCI’s stockholders to approve an increase in                EVCI’s authorized common stock to at least the number of shares that would                permit full conversion of the ComVest Note, and the exercise of warrants                and payment of fees described below (the “Share                Authorization”). |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Prepayable                at EVCI’s option without penalty. |
|--------|--------|-------------------------------------------------------------------|

|   | · | Convertible                at ComVest’s option, if not repaid within 12 months after issuance, into                shares of EVCI’s common stock at $0.60 per share, subject to                adjustment. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Secured                by substantially all assets of                EVCI. |
|--------|--------|----------------------------------------------------------------------------|

|   | · | Ranks                junior to EVCI’s current debt to Harris N.A. and senior to any other                existing or future EVCI indebtedness. The subordination of the ComVest                Note will be pursuant to an intercreditor agreement with Harris                N.A. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Exercisable                at $0.54 per share, subject to                adjustment. |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | Permit                a cashless exercise and have full ratchet and other anti-dilution                provisions for issuances of other equity securities below their exercise                price. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Not                exercisable unless the Share Authorization is                obtained. |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | Cash                proceeds from exercise of the Warrants must be used to pay accrued                interest and then principal of the ComVest                Note. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | ComVest                will be entitled to receive a cash fee of $234,500 that will accrue                until                the senior debt is paid. To the extent EVCI is required to provide                the                Letter of Credit, EVCI will accrue a monthly fee of 1.37% of the                face                amount of the outstanding Letter of                Credit. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                Letter of Credit would be used to satisfy financial responsibility                standards of regulators of our                schools. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | ComVest                would either provide a corporate guaranty to the provider of the                Letter of                Credit or procure the Letter of                Credit. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A                portion of Participating Management’s investment will be used as cash                collateral in connection with the Letter of                Credit. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*pari      passu*

----

*Dr.      Arol I. Buntzman - Chairman of the Board*

|  | · | Waive                any change of control payment that may be payable to him as a result                of                the ComVest Financing transaction. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Terminate                his existing change of control agreement. |
|--|--------|--------------------------------------------------------------------|

|  | · | Cancel                his 602,026 existing options, effective April 24, 2007. |
|--|--------|-------------------------------------------------------------------------------|

|  | · | Amend                his employment agreement to: |
|--|--------|---------------------------------------------------|

|  | · | Provide                for a term expiring in two years from the                closing; |
|--|--------|------------------------------------------------------------------------------------------|

|  | · | Reduce                his salary from $630,000 to $385,000; provided his salary reverts                to                $630,000, retroactively, if the Share Authorization is not obtained,                and the following conditions are met (the “Salary Reversion Conditions”):                the ComVest Note has been repaid and ComVest’s obligations with respect to                the Letter of Credit have been extinguished and, thereafter, EVCI’s common                stock bid price is greater than $1.00 for 30 consecutive trading                days. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Provide                for the payment of an annual bonus of up to 100% of his salary based                on                2.75% of EBITDA (as defined) if EVCI meets 75% of EBITDA objectives. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Add                a provision for the payment of a merger and acquisition transaction                fee of                1.5% on acquisitions or sales EVCI makes, including the sale of its                entire                business but excluding any going private transaction involving ComVest                on                an affiliate. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Provide                for the payment of six months severance if his employment is terminated                for any reason. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------|

|  | · | Provide                for the payment of a $150,000 bonus in 90 days of signing the Definitive                Agreement if Dr. McGrath certifies that Dr. Buntzman has improved                relations between Interboro and the community of Washington Heights,                Manhattan, New York. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Dr.      John J. McGrath - Chief Executive Officer and Presiden*

|  | · | Waive                any change of control payment that may be payable to him as a result                of                the ComVest Financing. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | · | Terminate                his change of control agreement. |
|--|--------|-----------------------------------------------------------|

|  | · | Cancel                his 261,125 existing options, effective April 24, 2007. |
|--|--------|-------------------------------------------------------------------------------|

|  | · | Revise                his employment agreement to: |
|--|--------|----------------------------------------------------|

|  | · | Provide                for a term expiring in three years; |
|--|--------|------------------------------------------------------------|

|  | · | Reduce                his salary from $490,000 to $350,000; provided his salary reverts                to                $490,000, retroactively, if the Share Authorization is not approved                and                the Salary Reversion Conditions are                met. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Provide                for the payment of an annual bonus of up to 100% of his salary based                on                4.75% of EBITDA if EVCI meets 75% of EBITDA                objectives. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Provide                for the payment of 12 months severance if his employment is terminated                for                any reason. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

*Joseph      D. Alperin - General Counsel and Vice President for Corporate      Affairs*

|  | · | Terminate                his change of control agreement. |
|--|--------|-----------------------------------------------------------|

|  | · | Cancel                his 53,333 existing options, effective April 24, 2007. |
|--|--------|------------------------------------------------------------------------------|

|  | · | Revise                his employment agreement to: |
|--|--------|----------------------------------------------------|

|  | · | Provide                for a term expiring in three years. |
|--|--------|------------------------------------------------------------|

|  | · | Reduce                his salary from $260,000 to $230,000; provided his salary will revert                retroactively to $260,000 if the Share Authorization is not approved                and                the Salary Reversion Conditions are                met. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Terminate                his change of control agreement. |
|--|--------|-----------------------------------------------------------|

|  | · | Provide                for the payment of an annual bonus of up to 100% of his salary based                on                0.75% of EBITDA if EVCI meets 75% of EBITDA                objectives. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Provide                for the payment of six months severance if his employment is terminated                for any reason. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------|

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*Mr.      Stephen Schwartz - Chief Financial Officer*

|  | · | Enter                into an employment agreement pursuant to which Mr. Schwartz will                replace                Richard Goldenberg as the chief financial officer of EVCI on the                following                principal terms: |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Provide                for a term expiring in five years. |
|--|--------|-----------------------------------------------------------|

|  | · | Provide                for a salary of $180,000 per annum. |
|--|--------|------------------------------------------------------------|

|  | · | Provide                for the payment of an annual bonus of up to 100% of his salary based                on                1.75% of EBITDA if EVCI meets 75% of EBITDA                objectives. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Provide                for the payment of six months severance if his employment is terminated                for any reason. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------|

*Resignation      and Election of Director*

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*Bank      Debt Restructuring*

|   | · | The                revolver increases from $2.0 million to $5.0 million and the term                loan is                reduced from $10.375 million to approximately $2.35 million. The                term loan                can be increased once only up to $6.0 million for use in paying                disallowances resulting from the DOE mandated ATB test rescoring                by                Interboro. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                maturity date of the revolver and term loan is April 1,                2009. |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | The                interest rate on the revolver and term loan is, at EVCI’s option, prime +                2.75% or LIBOR +4%. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                term loan amortizes quarterly with six payments of $750,000 from                September                30, 2007 through December 31, 2008. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Financial                covenants are either eliminated or                reset. |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | Existing                defaults are waived. |
|--------|--------|----------------------------------------------|

*2006      Developments*

|   | · | On                January 13, 2006, EVCI announced that SED had imposed enrollment                caps on                new students enrolled at Interboro during the spring 2006 through                spring                2007 semesters. The caps limit initial new enrollment at the beginning                of                each semester and enrollment for new students after approximately                the                third week of the semester as                follows: |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                       |   |  **Initial** |   | **After                approximately****3                Weeks*** |   |
|----------------------------|--------|-------------------|--------|-------------------------------------------------------------------|--------|
| Spring                2006 |   |              | 900    |                                                              |   | 850 |   |
| Summer                2006 |   |              | 900    |                                                              |   | 850 |   |
| Fall                2006   |   |              | 1,080  |                                                              |   | 1,000 |   |
| Spring                2007 |   |              | 1,080  |                                                              |   | 1,000 |   |

----

|   | · | SED                monitored Interboro’s progress with site visits in the summer and fall of                2006. On March 23, 2007, Interboro received an interim report from                SED                that sets forth substantial progress and evident improvements but                also                notes continuing areas of weakness and concern                that prevent any upward adjustment or removal of the SED enrollment                caps                at this time. SED does not intend to issue a final report until after                a                third site visit, tentatively scheduled for summer                2007. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | The                SED enrollment caps are tied to an SED expectation that at least                65% of                students who are first enrolled at Interboro will persist to their                second                semester of attendance at Interboro. Interboro’s persistence rate to a                second semester for the spring 2006 semester was approximately 50%,                which                is a 19% increase over the 42% persistence rate for the spring 2005                semester. Interboro’s persistence rate to a second semester for the summer                2006 semester was approximately 54%, which represents a 20% increase,                over                the 45% persistence rate in the summer 2005 semester. Interboro’s                persistence rate for the fall 2006 semester was approximately 60%,                which                is a 15% increase over the 52% rate for the fall 2005                semester. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                February 3, 2006, EVCI announced that SED had requested Interboro                and TCI                to develop teach out plans for their students. This SED action was                in                response to a Regents Advisory Council on Postsecondary Accreditation                recommendation that was based on concerns about Interboro’s and EVCI’s                financial viability, notwithstanding the fact that the Regents Advisory                Council did not have (nor did it request from EVCI) financial information                regarding EVCI or Interboro that we believe was reasonably necessary                to                assess EVCI’s financial viability at that time. If in the future. SED                determines it is necessary to close either or both schools, teach                out                plans would give students the opportunity to complete their course                of                study at other colleges. The EVCI announcement noted that Johanna-Duncan                Poitier, Deputy Commissioner of SED’s Office of Higher Education, was                quoted in a *New                York Times*                article that the request for teach out plans “does not mean we expect to                be closing them down, but there should be a plan because of the large                number of students.” |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | EVCI                submitted to SED Interboro’s Institutional Effectiveness Plan, on February                22, 2006. By letter, dated March 13, 2006, SED advised EVCI of the                following about the Plan: “in general, it satisfactorily addresses both                the registration standards in Commissioner’s Regulations and the findings                and recommendations based on the Department’s review in the spring 2005.”                The letter indicated that the effectiveness of specific components                of the                Plan “in promoting and assessing intended changes will be determined                through careful internal and Department reviews.” SED’s letter directed                effectiveness assessments to focus on contributions being made to                “increased persistence and graduation                rates.” |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | By                letter to EVCI, dated March 14, 2006, SED itemized the documents                that                constitute the full final report of SED’s review process that began with                two site reviews in the spring 2005. The letter and those documents                were                filed as exhibits to EVCI’s Form 10-K for its year ended December 31,                2006. SED’s letter advised that the information in Interboro’s final                response, dated February 3, 2006, to the Draft Report regarding measures                taken and planned “appear to be appropriate.” The SED letter “extends the                registration of Interboro’s programs in accordance with the Commissioner’s                Regulations and Department practice for renewal.” It also advised that SED                is expecting additional information regarding the scope of implementation                and on outcomes, noting that SED wants improvements in performance                with                respect to “(1) admission of students who have a reasonable prospect of                academic success in the context of the institution’s services and                programs; and (2) a record of student persistence and serious achievement                at the college level.” |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | In                May 2006, Interboro graduated 697 students. This graduating class                is the                largest in Interboro’s history. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In                May 2006, TCI’s faculty recommended to the Regents 237 students for                graduation. During the two years following a change of ownership                and                control of a school, the authority to confer degrees reverts to the                Regents. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Effective                May 31, 2006, Joseph Looney resigned as EVCI’s Chief Financial Officer and                Richard Goldenberg, EVCI’s former CFO and Interboro’s then and now current                CFO, resumed his additional duties as EVCI’s                CFO. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In                November 2006, Interboro reported to the U.S. Department of Education                the                results of its rescoring of exams of 9,513 ability to benefit students.                Those results and subsequent developments relating to the rescoring                are                discussed in Note 7 of Notes to Consolidated Financial                Statements. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                November 28, 2006, EVCI announced that the Middle States Commission                on                Higher Education, TCI’s regional accrediting body, had approved the change                of ownership to EVCI of Technical Career Institutes. This approval                had                been pending since EVCI acquired TCI on September 16, 2005. The next                Middle States self-study evaluation for TCI is in the academic year                2009/2010. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In                December 2006, we received notice from The Nasdaq Stock Market indicating                that, in accordance with Marketplace Rule 4310 (c) (8) (D), EVCI                has been                granted a 180 day extension, or until June 11, 2007, to regain compliance                with the minimum $1.00 bid price per share requirement of The Nasdaq                Capital Market. EVCI had received a notice from The Nasdaq Stock                Market in                June 2006 indicating that  EVCI                was not in compliance with the minimum bid price rule because the                closing                bid  price                per share for our common stock was below $1.00 per share for 30                consecutive  trading                days. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                December 21, 2006, we filed a Form 8-K that disclosed we did not                believe a                private placement of equity to institutional investors would be completed.                It also disclosed that we were pursuing other strategic alternatives                that                could include our incurrence of additional debt or substitute debt                for our                bank debt, sales of EVCI equity that may or may not result in a change                of                control, one or more transactions that result in EVCI going private                or                sales of assets. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Effective                in December 2006, the Rules of the Board of Regents require a change                of                ownership or control of a degree granting proprietary college in                New York                be approved prior to the change. The approval process could take                up to 180                days. This new rule has had an adverse affect on our ability to raise                additional financing. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Target      Market**

**Availability      of Tuition Grants and Loans**

----

*Accelerated      TAP*

----

*2007      budget proposal*

----

**Tuition**

**Enrollments**

|               |   | **Spring** |   | **Summer** |   | **Fall** |   | **Total** |   |
|---------------|--------|------------|--------|------------|--------|----------|--------|-----------|--------|
| **2006**      |   |       |   |       |   |     |   |      |   |
| **TCI**       |   |       | 3,000  |       |   | 2,200    |   |      | 3,100  |   |   | 8,300 |   |
| **Interboro** |   |       | 3,000  |       |   | 1,800    |   |      | 2,700  |   |   | 7,500 |   |
| **PSB**       |   |       | 160    |       |   | 140      |   |      | 220    |   |   | 520 |   |
|          |   |       | 6,160  |       |   | 4,140    |   |      | 6,020  |   |   | 16,320 |   |
| **2005**      |   |       |   |       |   |     |   |      |   |   |   |   |   |
| **TCI**       |   |       | *      |       |   | *        |   |      | 3,000  |   |   | 3,000 |   |
| **Interboro** |   |       | 3,700  |       |   | 2,650    |   |      | 4,500  |   |   | 10,850 |   |
| **PSB**       |   |       | **     |       |   | **       |   |      | 100    |   |   | 100 |   |
|          |   |       | 3,700  |       |   | 2,650    |   |      | 7,600  |   |   | 13,950 |   |

----

----

|          |   | **Spring                2007** |   | **Spring                2006** |   |
|---------------|--------|--------------------------------|--------|--------------------------------|--------|
| **TCI**       |   |                           | 3,090  |                           |   | 3,000 |   |
| **Interboro** |   |                           | 2,730  |                           |   | 3,000 |   |
| **PSB**       |   |                           | 325    |                           |   | 160 |   |

**Our      Operating Strategy**

*Focus      on career based academic curricula with transfer options*

|   | · | Business                and new media technology includes programs in business administration,                accounting, digital media arts, office technology (general and medical)                and computerized accounting systems                technology. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Computer                and electronics technology includes technology programs in networking,                electronic security systems, electronic engineering and rail                electronics. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Climate                control technology includes technology programs in HVAC and                refrigeration. |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | Automotive                technology prepares students to become automotive service technicians.                Laboratory courses are taught at the Harlem Auto Mall complex operated                by                Potamkin Cadillac. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Business                administration: accounting and                management |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | Paralegal                studies |
|--------|--------|----------------------------------|

|   | · | Computer                technology: networking |
|--------|--------|------------------------------------------------|

|   | · | Ophthalmic                dispensing |
|--------|--------|--------------------------------------|

|   | · | Office                technologies: medical office assistant and executive                assistant |
|--------|--------|-----------------------------------------------------------------------------------------------------|

----

|   | · | Information                technology |
|--------|--------|---------------------------------------|

|   | · | Business                administration |
|--------|--------|----------------------------------------|

|   | · | Office                administration |
|--------|--------|--------------------------------------|

*Provide      a quality and caring educational experience *

----

*Improve      student persistence and graduation rates*

*“Smart      Start”*

*“Immersion”*

----

*“Leap”*

*“Faces”*

|   | · | The                college is being more selective in granting                admission. |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | Late                registration is limited to one                week. |
|--------|--------|-------------------------------------------------------------------------|

|   | · | Students                with poor attendance are being                dropped. |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | Interboro’s                faculty is being evaluated more often by Interboro’s academic                administration, especially with respect to further improving retention                while maintaining academic                integrity |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                curriculum committee regularly reviews course offerings and teaching                methods to further enhance academic rigor and quality as well as                techniques for assisting students to master the material. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Ways                to attract more high school graduates and students with a GED have                been                implemented |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                pass point has been increased by Interboro on the reading portion                of the                federally approved ability to benefit test as reading strength correlates                most strongly with subsequent academic                performance. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                number of full-time faculty, and the ratio of full-time faculty to                students, have been strengthened continuously over the past four                years. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                libraries have been moved into larger space and their collections                greatly                increased. The librarians are increasingly pro-active in helping                students                gain information literacy skills. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | The                skills of the tutors in the Academic Resource Centers have been upgraded                through a national training and certification                program. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | New                Counseling Centers have been opened on the campuses to assist students                cope with non-academic challenges and issues which might interfere                with                academic performance. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Maintain      academic integrity and create cutting edge programs*

*Focus      on placement of graduates *

**Our      Growth Strategy**

*Enrollments*

*New      sites *

*Acquisitions*

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**Marketing**

** **

**Accreditation      **

|   | · | the                recognition and acceptance by other higher education institutions,                employers and governmental entities of the degrees and credits earned                by                students |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | qualification                to participate in Title IV programs, including Pell grants, and New                York                TAP grants and Pennsylvania PHEAA                grants |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Regulation      of Proprietary Schools **

*Title      IV*

----

|   | · | the                federal government, which acts through the                DOE |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | state                higher education regulatory bodies |
|--------|--------|---------------------------------------------------------|

|   | · | the                accrediting agencies recognized by the                DOE |
|--------|--------|------------------------------------------------------------------------------|

|   | · | state                higher education regulatory bodies |
|--------|--------|---------------------------------------------------------|

|   | · | A                college cannot receive in excess of 90% of its cash basis revenue                from                Title IV programs for tuition, fees and institutional charges. TCI                and                Interboro each derive substantially less than 90% of their revenue                from                Title IV funds. PSB derived approximately 88% of its revenue in 2006                from                Title IV funds. Management expects PSB to decrease its percentage                of                revenue from Title IV funds in the future as a result of a significant                increase in PHEAA grants. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A                college cannot pay any commission, bonus, or other incentive payment,                based directly or indirectly on success in securing new student                enrollments or financial aid, to any person or entity engaged in                any                domestic student recruitment, admission or financial aid awarding                activity. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Participation                in Title IV is based, in part, on satisfying administrative capability                requirements. A college must demonstrate that it complies with Title                IV                regulations, has capable and sufficient personnel to administer its                Title                IV program and advise students about financial aid, satisfactorily                measures its students’ academic progress, and timely submits all reports                and financial statements as required by                DOE. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Independent                auditors annually audit each of our college’s administration of Title IV                funds. The resulting audit report is submitted to the DOE. In addition,                colleges are subject to periodic audits by the DOE or the DOE’s Office of                the Inspector General. If it is determined that a college improperly                disbursed Title IV funds, or violated a provision of                the HEA, it could be required to repay a portion of such funds and                might                be assessed an administrative fine. A college could also become subject                to                heightened monitoring or transfer from the advance system of payment                to                the reimbursement system, under which it must disburse its own funds                to                students and document the student's eligibility for Title IV funds                before                receiving funds from the DOE. Information about the DOE’s program review                that has focused on the scoring of ATB exams by Interboro is disclosed                in                Notes 6 and 7 of Notes to Consolidated Financial                Statements. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | In                the event a student withdraws or stops attending and does not complete                an                academic program during a semester, the college must perform a Federal                refund calculation to determine if funds must be returned on the                student’s                behalf. For example, it must return a prorata portion of the Title                IV                funds received by a college if a student withdraws prior to completion                of                60% of a semester. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our                colleges must satisfy DOE numeric standards of financial responsibility                on                a consolidated basis. Compliance with these standards is evaluated                for                purposes of recertification to participate in Title IV and also annually                after submission of audited financial statements to the DOE by June                30th                of                the following year. If the DOE determines the colleges do not meet                the                standards of financial responsibility, they can continue to participate                in                the Title IV programs if they can demonstrate they are financially                responsible on an alternative basis. Alternatives include posting                a letter                of credit in favor of the DOE and possibly accepting other conditions                on                participation in Title IV programs. EVCI failed to meet the minimum                numeric standard of financial responsibility as of December 31, 2006.                Additional information about this failure is disclosed below in a                risk                factor captioned, “Our failure to satisfy specific financial                responsibility standards established by federal and state regulatorsor                the non-governmental agencies that accredit our colleges could have                a material adverse effect on us.” |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*TAP      grants*

----

|   | · | The                college must timely disburse financial aid funds due to                students. |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | The                college cannot certify ineligible students to receive TAP                grants. |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | The                college must have and comply with an acceptable tuition refund                policy. |
|--------|--------|----------------------------------------------------------------------------------------------------------|

|   | · | SED                must continue to register the programs of the                college. |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | The                college must continue to be accredited by a regional or national                accrediting agency recognized by U.S. Secretary of                Education. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*PHEAA      grants*

** **
** **

|   | · | a                graduate of a state-approved high school or have a GED; |
|--------|--------|--------------------------------------------------------------------------|

|   | · | a                Pennsylvania resident for at least 12 months before the application                filing                deadline; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | enrolled                for at least half-time. |
|--------|--------|-------------------------------------------------|

*Change      of ownership or control*

*Title      IV. *

----

|   | · | It                occurs if a person acquires ownership and control that requires EVCI                to                file a Form 8-K with the Securities and Exchange Commission disclosing                a                change of control. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | It                occurs if an existing stockholder (other than an institutional investor)                ceases to be a controlling stockholder. A controlling stockholder                is                someone who holds or controls by agreement 25% or more of the total                outstanding voting stock and more shares of voting stock than any                other                stockholder. EVCI does not now have a controlling stockholder under                this                definition. Under the terms of the ComVest Financing, ComVest could                become                a controlling stockholder in the                future. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*New      York. *

|   | · | capacity                to operate the college in compliance with applicable New York and                federal                laws, rules and regulations |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | sufficient                financial resources |
|--------|--------|-----------------------------------------------|

----

| ·   | experience                operating an educational institution or other business enterprise                in an                effective manner which demonstrates capacity to operate a degree-grating                college |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | compliance                with laws, rules, regulations and accreditation requirements applicable                to                any other postsecondary school(s)                operated |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | not                having engaged in fraudulent or deceptive                practices. |
|--------------------|----------------------------------------------------------------------------------------|

*Pennsylvania      *

*Middle      States Commission on High Education*

*ACCSCT*

| ·   | 25%                or more of the voting stock is acquired along with the ability to                exercise                control over the corporation’s management and operations,                or |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | a                holder of 25% or more of the voting stock reduces its holdings to                less                than 25% and loses the ability to exercise control over the corporation’s                management and operations, or |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | control                is deemed to have been acquired or lost under applicable securities                laws. |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

*Opening      new college sites and adding educational college programs*

**Competition**

*Community      College Week *

----

| ·   | the                Title IV requirement that proprietary and vocational post-secondary                institutions be fully operational for two years before applying to                participate in Title IV programs |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                time it takes to obtain                accreditation |
|--------------------|-------------------------------------------------------------------------|

| ·   | the                considerable expense of start-up                operations |
|--------------------|-------------------------------------------------------------------------------|

| ·   | the                difficulty of achieving acceptable margins with a low tuition rate                that is                competitive with our colleges |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | for                those existing colleges or universities that need to participate                in Title                IV loan programs, the risk of losing eligibility to participate in                any                Title IV program because loan default rates exceed permissible limits.                Because of their financial circumstances, students from our target                market                are more likely to default, especially if they are ATB                students. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Employees**

----

**Item      1A. Risk Factors **

**A      failure by any of our colleges to comply with extensive federal and state      regulations could have a material adverse impact on its ability to operate      and      grow.**

**Adverse      changes in the rules governing TAP disbursements could materially impede      Interboro’s and TCI’s ability to operate**

----

**Changes      in Ability to Benefit regulations could materially and adversely affect      Interboro’s and TCI’s ability to operate and grow**

----

**The      amount and timing of TAP disbursements could materially impede the ability      of      Interboro and TCI to operate.**

| ·   | In                December 2004, TAP advised that a total of approximately $3.8 million                of                payments payable for Interboro’s and TCI’s spring 2005 semesters would be                deferred until August 1, 2005. This deferral turned out to be less,                as                Interboro and TCI received the following approximate payments of                their                deferred amounts: |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Month** |   | **Interboro** |      | **TCI** |   |
|-----------|--------|---------------|-----------|---------|--------|
| March     |   | $             | 1,100,000 |    | $      | 430,000 |   |
| June      |   |          | 1,200,000 |    |   | 280,000 |   |
| July      |   |          | 400,000   |    |   | 390,000 |   |

| ·   | In                December 2005, TAP advised that a total of approximately $3.6 million                of                payments payable for Interboro’s and TCI’s spring 2006 semesters would be                deferred until August 1, 2006. This deferral also turned out to be                less as                Interboro and TCI received the following                approximate payments of their deferred                amounts: |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Month** |   | **Interboro** |      | **TCI** |   |
|-----------|--------|---------------|-----------|---------|--------|
| March     |   | $             | 1,800,000 |    | $      | 700,000 |   |
| June      |   |          | 700,000   |    |   | 370,000 |   |

| **Year** |        | **Interboro** |      | **TCI** |   |
|----------|--------|---------------|-----------|---------|--------|
| 2005     |   | $             | 1,015,000 |    | $      | 919,000 |   |
| 2006     |   |          | 674,000   |    |   | 940,000 |   |

----

| ·   | the                losses from operations at Interboro |
|--------------------|--------------------------------------------------------|

| ·   | payments                of interest and principal on our bank                debt |
|--------------------|-----------------------------------------------------------------------------------|

| ·   | Interboro                not receiving prepayments of TAP funds resulting in delays of receipt                of                these funds for up to eight weeks |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                seasonality of our business, particularly during July and                August |
|--------------------|----------------------------------------------------------------------------------------------------|

**Interboro      may be subject to even more severe action by SED if it is not able to achieve      a      65% persistence rate or to implement other required changes at Interboro to      SED’s satisfaction.**

----

**A      new TAP requirement relating to accelerated study could have a material adverse      impact on our revenue and retention and graduation rates.**

----

**Adverse      changes in the rules governing, or the amount or timing of, Pell program      disbursements could materially impede our college’s ability to      operate.**

**Title      IV program reviews and audits of any EVCI college could result in it being      required to make material refunds of Title IV and TAP funds and EVCI being      required to reduce its operating income by the amount of those refunds.**

----

**Our      failure to satisfy specific financial responsibility standards established      by      federal and state regulators or the non-governmental agencies that accredit      our      schools could have a material adverse effect on us. **

| ·   | equity                ratio, which measures the institution’s capital resources, ability to                borrow and financial viability |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | primary                reserve ratio, which measures the institution’s ability to support current                operations from expendable resources                and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | net                income ratio, which measures the institution’s ability to operate at a                profit. |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

**.      **
** **

----

**A      future TAP audit could result in Interboro or TCI being required to make      material refunds of TAP and Pell grants and EVCI being required to reduce its      operating income by the full amount of those refunds.**

**.**

**Over      the longer term, we expect enrollments at, and earnings of, our colleges to      grow      at a much slower rate than they have since we acquired      Interboro.**

----

**If      Interboro is unable to improve its graduation rate to levels SED deems      acceptable, the Board of Regents may deny or adversely condition Interboro’s      reaccreditation.**

| ·   | an                institution that has an associate degree completion rate that is                more than                five percentage points below the mean associate degree completion                rate                reported by all New York state colleges is required to submit to                SED a                plan to improve graduation rates. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an                institution whose mission includes the preparation of students for                employment, that reports job placement rates to SED and that offers                no                programs higher than the associate degree level is required to submit                to                SED a plan to improve job placement rates if its job placement rates                are                more than five percentage points below the mean job placement rate                reported by all New York state associate degree                colleges. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

** **

----

**The      capital and operating costs of implementing agreements with SED, in response      to      SED’s recommendations, could significantly exceed the estimates we have made to      date.**

**Our      margins may continue to erode if the maximum federal and state grants and loans      do not increase over time.**

|  **Award                Year** |   | **Maximum****Pell                Grants** |   |
|-------------------------------------|--------|-------------------------------------------|--------|
| 2000/2001                           |   | $                                         | 3,300  |   |
| 2001/2002                           |   |                                      | 3,750  |   |
| 2002/2003                           |   |                                      | 4,000  |   |
| 2003/2004                           |   |                                      | 4,050  |   |
| 2004/2005                           |   |                                      | 4,050  |   |
| 2005/2006                           |   |                                      | 4,050  |   |
| 2006/2007                           |   |                                      | 4,050  |   |
| 2007/2008                           |   |                                      | 4,310  |   |

----

**The      seasonality of our enrollments produces significant variations in our results      from quarter to quarter.**

** **

**The      liquidity of our common stock and our ability to raise additional capital when      we may need it most will be adversely affected by a delisting of our common      stock from the Nasdaq Capital Market. **

----

| ·   | the                liquidity of our common stock would be impaired, not only in the                number of                shares that could be bought and sold and lower prices for them, but                also                through delays in the timing of transactions and reduction in security                analysts’ and the news media’s coverage of                us. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | these                trading factors would also make our common stock materially less                attractive to potential sources of financing that we may require                in                connection with a refinancing or repayment of our bank                debt. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Actual      or threatened legal proceedings against us or any of our colleges by regulatory      agencies or private parties could have a material adverse effect on our      business.**

**Provisions      of laws or regulations, our certificate of incorporation and by-laws and the      terms of the ComVest Financing discourage takeover attempts by any party except,      perhaps, ComVest.**

----

**The      loss of the services of key management personnel could have a material adverse      effect on our operations and growth. **

**Our      business and results could materially suffer if we improperly balance or divert      resources from our operations to making acquisitions or if we make acquisitions      that do not meet our expectations. **

----

| ·   | possible                loss of key employees |
|--------------------|-----------------------------------------------|

| ·   | an                inability to integrate the acquisition because of differences in                vision,                management style, work ethic or other                causes |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | difficulties                in integrating academic, administrative and financial systems, including                technology of the acquired company with                ours |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | diversion                of our management resources or otherwise stretching our resources                too thin |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

| ·   | adverse                effects on our operating results as a result of lower operating margins                of                the acquired company |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | unanticipated                business or regulatory uncertainties or                liabilities |
|--------------------|-------------------------------------------------------------------------------------------------|

| ·   | an                inability to fund operations of the acquired                company |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | breaches                of representations or warranties by the seller of the acquired company                for                which we do not have adequate                recourse |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | underestimation                      of capital needs |
|--------------------|-------------------------------------------------------|

| ·   | failure                to develop or implement a viable business plan, including with respect                to                managing Title IV loans that are needed to support                tuition |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an                inability to continue a school’s participation in financial aid programs                as a result of regulatory change in control                provisions |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an                inability to effectively deal with                unions |
|--------------------|----------------------------------------------------------------------------|

| ·   | difficulties                in maintaining accreditation and program                registration |
|--------------------|--------------------------------------------------------------------------------------------------|

----

**We      cannot predict the impact on our future results of negotiations with TCI’s union      to extend the current collective bargaining agreement.**

**If      the operation of a college’s computer system is adversely affected by computer      viruses that are not recognized by available anti-virus software, or for any      other reason, its ability to operate could be severely      impaired.**

**Terrorist      activity, or the threat of it, in the New York Metropolitan area could adversely      affect Interboro and TCI.**

**Interboro’s      inability to foster and maintain relationships with community organizations      in      the communities where its college sites are located could adversely affect      those      sites.**

**The      change in ownership of our common stock as the result of the ComVest Financing      will substantially limit the utilization of our net operating loss      carryforwards.**

----

**Actual      or potential future sales of shares of our common stock by management could      have      an adverse effect on the market price of our common stock.**

**Our      share price has ranged greatly since we went public and may be very volatile      in      the future.**

| ·   | exceeding                or not meeting expectations for our semester enrollment numbers and                our                quarterly or yearly operating results |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | regulatory                developments that affect our cash flow or ability to open or expand                sites |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

| ·   | an                ongoing Pell program review or a TAP                audit |
|--------------------|-----------------------------------------------------------------------------|

| ·   | allegations,                even if untrue, that a college failed to comply with regulations                relating                to TAP or Title IV, its accreditation by the Board of Regents or                corporate                compliance with Sarbanes-Oxley or other securities                laws |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | exceeding                or not meeting expectations for our semester enrollment numbers and                our                quarterly or yearly operating results |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | trading                by investors that are more interested in quarterly versus long-term                results |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | changes                in securities analysts’ expectations as to our future                performance |
|--------------------|---------------------------------------------------------------------------------------------------------------|

----

| ·   | adverse                media coverage of our colleges or other for profit-schools owned                by public                companies |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increased                competition in our target market |
|--------------------|-----------------------------------------------------------|

| ·   | the                operating and stock price performance of other comparable companies,                including as a result of fraud allegations or Congressional investigations                relating to their operations |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | general                stock market or economic conditions, including as a result of uncertainty                about, or the occurrence of, war or                terrorism |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | sales                of our stock by our management or others pursuant to a prospectus                or                otherwise |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------|

| ·   | acquisitions                of other colleges |
|--------------------|-----------------------------------------------|

| ·   | additional                financings |
|--------------------|--------------------------------------|

**Our      classified board limits stockholder voting for election and removal of      directors.**

**Indemnification      and limitation of liability of our officers and directors may insulate them      from      accountability to stockholders at substantial cost to us.**

----

**Item      1B. Unresolved Staff Comments.**

**Item      2. Description of Property**

| **Location**                                        |   | **Square                Footage** |   | **Expiration                Date****(1)**                                                                                    |   | **Use**                                             |
|-----------------------------------------------------|--------|-----------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| **Interboro**                                       |   |                              |   |                                                                                                                         |   |                                                |
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| Mid-town                New                York, NY |   | 39,000                       |   | 1/31/2014                                                                                                                    |   | Main                campus                          |
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| 8th                Avenue NY                        |   | 13,500                            |   | 8/31/15                3rd                &                4th                floor and 9/30/11 2nd                floor |   | Annex                                               |
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| Flushing,                NY                         |   | 11,700                            |   | 12/31/2010                                                                                                                   |   | Extension                center                     |
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| Flushing,                NY                         |   | 10,100                            |   | 6/30/2025                                                                                                                    |   | Annex                                               |
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| Washington                Heights, NY               |   | 7,400                             |   | 7/31/2012                                                                                                                    |   | Extension                center                     |
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| Washington                Heights, NY               |   | 3,700                             |   | 7/31/2014                                                                                                                    |   | Annex                                               |
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| Yonkers,                NY (2)                      |   | 8,000                             |   | 4/15/2013                                                                                                                    |   | Site                                                |
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| Yonkers,                NY (2)                      |   | 16,000                            |   | 8/31/2014                                                                                                                    |   | Annex                                               |
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| **TCI**                                             |   |                              |   |                                                                                                                         |   |                                                |
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| 31st                Street, NY                      |   | 119,000                           |   | 6/30/2013                                                                                                                    |   | Main                campus                          |
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| 8th                Avenue, NY                       |   | 19,000                            |   | 5/31/2008                                                                                                                    |   | Annex                                               |
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| **PSB**                                             |   |                              |   |                                                                                                                         |   |                                                |
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| Allentown,                PA                        |   | 15,000                            |   | 5/31/2010                                                                                                                    |   | Main                campus                          |
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| **EVCI**                                            |   |                              |   |                                                                                                                         |   |                                                |
|                                                |   |                              |   |                                                                                                                         |   |                                                |
| Yonkers,                NY                          |   | 2,400                             |   | 10/31/2013                                                                                                                   |   | Corporate                and administrative offices |

----

| (1)   | Includes                renewals at Interboro’s option. |
|-----------------|---------------------------------------------------------------|

|   |   |
|--------|--------|
| (2)   | Vacant                except for approximately 100 square feet used for our computer                hub. |
|-----------------|----------------------------------------------------------------------------------------------------------|

----

**Item      3.**
**      Legal Proceedings.**

*Securities      Class Actions.*

*Stockholder      Derivative Action. *

*Delaware      Books and Records Action*

----

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

**Part      II**

**Item      5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases      of      Equity Securities.**

|                               |   | **        ****High** |   | **Low** |   |
|-------------------------------|--------|--------------------------------------------------------------|--------|---------|--------|
| **2005**                      |   |                                                         |   |    |   |   |   |
| First                Quarter  |   | $                                                            | 11.05  |    | $      | 6.34 |   |
| Second                Quarter |   |                                                         | 7.76   |    |   | 4.75 |   |
| Third                Quarter  |   |                                                         | 7.00   |    |   | 6.14 |   |
| Fourth                Quarter |   |                                                         | 6.64   |    |   | 1.50 |   |
|                          |   |                                                         |   |    |   |   |   |
| **2006**                      |   |                                                         |   |    |   |   |   |
| First                Quarter  |   |                                                         | 1.88   |    |   | 1.32 |   |
| Second                Quarter |   |                                                         | 1.53   |    |   | 0.67 |   |
| Third                Quarter  |   |                                                         | 0.96   |    |   | 0.54 |   |
| Fourth                Quarter |   |                                                         | 0.78   |    |   | 0.39 |   |

----

**Item      6. Selected Financial Data.**

|                                                                       |   | **Years                ended December 31,** |         |
|----------------------------------------------------------------------------|--------|---------------------------------------------|--------------|
|                                                                       |   | **2006**                                    |         | **2005** |   | **2004** |   | **2003** |   | **2002** |   |
|                                                                       |   |                                        |         |   |   |   |   |   |   |   |   |
| Statement                of operations data                                |   |                                        |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                revenue                                               |   | $                                           | 65,446,392   |   | $ | 50,741,564 |   | $ | 33,069,973 |   | $ | 20,237,728 |   | $ | 15,433,940 |   |
| Operating                expenses                                          |   |                                        | 77,093,919   |   |   | 49,705,327 |   |   | 29,425,882 |   |   | 18,603,202 |   |   | 14,946,671 |   |
| Income                (loss) from operations                               |   |                                        | (11,647,527  | ) |   | 1,036,237 |   |   | 3,644,091 |   |   | 1,634,526 |   |   | 487,269 |   |
| Other                income (expense)                                      |   |                                        | (1,894,547   | ) |   | (371,270 | ) |   | (152,479 | ) |   | (114,626 | ) |   | (94,810 | ) |
| Loss                from discontinued operations                           |   |                                        | -            |   |   | - |   |   | - |   |   | - |   |   | (2,202,641 | ) |
| Net                income (loss)                                           |   |                                        | (13,542,074  | ) |   | 360,967 |   |   | 6,253,612 |   |   | 3,379,900 |   |   | (2,005,182 | ) |
| Accreted                value of warrants and transaction costs - Series B |   |                                        | -            |   |   | - |   |   | - |   |   | (179,382 | ) |   | (239,176 | ) |
| Dividends                on preferred stock - Series B                     |   |                                        | -            |   |   | - |   |   | - |   |   | (630,333 | ) |   | (910,000 | ) |
| Dividends                on preferred stock - Series C                     |   |                                        | -            |   |   | - |   |   | - |   |   | - |   |   | (6,253 | ) |
| Accreted                value of warrants - Series C                       |   |                                        | -            |   |   | - |   |   | - |   |   | - |   |   | (3,081 | ) |
| Net                income (loss) available to common stockholders          |   |                                        | ($13,542,074 | ) | $ | 360,967 |   | $ | 6,253,612 |   | $ | 2,570,185 |   | $ | (3,163,092 | ) |
|                                                                       |   |                                        |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income loss per common share                            |   |                                        |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                      |   |                                        |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                Operations                                       |   | $                                           | (1.08        | ) | $ | 0.03 |   | $ | 0.53 |   | $ | 0.35 |   | $ | (0.20 | ) |
|  Discontinued                Operations                               |   |                                        | -            |   |   | - |   |   | - |   |   | - |   |   | (0.45 | ) |
|                                                                       |   | $                                           | (1.08        | ) | $ | 0.03 |   | $ | 0.53 |   | $ | 0.35 |   | $ | (0.65 | ) |
| Diluted                                                                    |   |                                        |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                Operations                                       |   | $                                           | (1.08        | ) | $ | 0.03 |   | $ | 0.50 |   | $ | 0.31 |   | $ | (0.20 | ) |
|  Discontinued                Operations                               |   |                                        | -            |   |   | - |   |   | - |   |   | - |   |   | (0.45 | ) |
|                                                                       |   | $                                           | (1.08        | ) | $ | 0.03 |   | $ | 0.50 |   | $ | 0.31 |   | $ | (0.65 | ) |
| Dividends                per share                                         |   |                                        |         |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                  |   | As                of December 31, |       |
|-------------------------------------------------------|--------|-----------------------------------|------------|
|                                                  |   | 2006                              |       | 2005 |   | 2004 |   | 2003 |   | 2002 |   |
| Balance                sheet data                     |   |                              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                current assets                   |   | $                                 | 10,010,145 |   | $ | 16,554,987 |   | $ | 16,657,437 |   | $ | 5,430,892 |   | $ | 4,412,159 |   |
| Total                assets                           |   |                              | 41,684,297 |   |   | 49,986,477 |   |   | 31,337,972 |   |   | 13,309,328 |   |   | 8,934,308 |   |
| Long-term                debt, net of current portion |   |                              | 9,813,317  |   |   | 10,841,743 |   |   | 871,855 |   |   | 2,823,389 |   |   | 1,875,761 |   |
| Total                stockholders’ equity       |   | $                                 | 13,468,463 |   | $ | 25,363,077 |   | $ | 23,894,225 |   | $ | 7,014,764 |   | $ | 2,521,963 |   |

----

**Item      7. Management’s Discussion and Analysis of Financial Condition and Results of      Operations.**

**Critical      Accounting Policies**

*Revenue      Recognition*

*Student      accounts receivable*

*Estimates*

*Goodwill      and other intangible assets*

----

*Marketing*

| **Period**                             |   | **Semester** |
|----------------------------------------|--------|--------------|
|                                   |   |         |
| June                through September  |   | Fall         |
| October                through January |   | Spring       |
| February                through May    |   | Summer       |

*SFAS      No. 123R*

----

*Income      taxes*

**Overview**

*Bank      Debt Restructuring*

*Business      Plan*

----

*Niche      market*

*Enrollments*

|   |   | **2006** |   | **2005** |   | **2004** |   | **2003** |   | **2002** |   |
|--------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|
|   |   |     |   |     |   |     |   |     |   |     |   |
| Spring |   |     | 6,160  |     |   | 3,700    |   |     | 2,800  |     |   | 1,850 |   |   | 1,400 |   |
| Summer |   |     | 4,140  |     |   | 2,650    |   |     | 1,975  |     |   | 1,100 |   |   | 950 |   |
| Fall   |   |     | 6,020  |     |   | 7,600    |   |     | 3,900  |     |   | 2,300 |   |   | 1,750 |   |
|   |   |     | 16,320 |     |   | 13,950   |   |     | 8,675  |     |   | 5,250 |   |   | 4,100 |   |

----

|                       |   |  **Initial                Enrollment** |   | **After                Approximately****3                Weeks*** |   |
|----------------------------|--------|---------------------------------------------|--------|-------------------------------------------------------------------|--------|
|                       |   |                                        |   |                                                              |   |
| Spring                2006 |   |                                        | 900    |                                                              |   | 850 |   |
| Summer                2006 |   |                                        | 900    |                                                              |   | 850 |   |
| Fall                2006   |   |                                        | 1,080  |                                                              |   | 1,000 |   |
| Spring                2007 |   |                                        | 1,080  |                                                              |   | 1,000 |   |

----

*U.S.      Department of Education Program Review*

----

*New      York State Regulatory Developments*

*Accelerated      TAP*

*2007      Budget Proposal*

----

*Change      of Control*

*Seasonality      *

*Billing      and collections*

----

*Cost      of revenue*

*Other      Salaries and all benefits*

*Acquisitions*

**Year      ended December 31, 2006 Compared to Year ended December 31,      2005**

|                                                           |   | **Year                ended December 31,** |      |
|----------------------------------------------------------------|--------|--------------------------------------------|-----------|
|                                                           |   | **2006**                                   |      | ** ****2005** |   |
|                                                           |   |                                       |      |   |   |
| Total                revenue                                   |   |                                       | 100.0     | % |   | 100.0 | % |
|                                                           |   |                                       |      |   |   |   |   |
| Cost                of revenue                                 |   |                                       | 36.3      |   |   | 31.4 |   |
| Selling,                general and administrative expenses    |   |                                       | 72.9      |   |   | 66.6 |   |
| Loss                on settlement of tuition disallowance      |   |                                       | 5.7       |   |   | - |   |
| Loss                on closed facilities                       |   |                                       |  2.9 |   |   | 0.7 |   |
| Total                operating expenses                        |   |                                       | 117.8     |   |   | 98.0 |   |
| Other                expense                                   |   |                                       | (2.8      | ) |   | (0.7 | ) |
| Income/(loss)                before provision for income taxes |   |                                       | (20.6     | ) |   | 1.3 |   |
| Net                income/(loss)                               |   |                                       | (20.6     | ) |   | 0.7 |   |

----

----

|                                 |   | **December                31, 2006** |   |
|--------------------------------------|--------|--------------------------------------|--------|
|                                 |   | **Interboro**                        |   | **TCI** |   | **PSB** |   | **Total** |   |
|                                 |   |                                 |   |   |   |   |   |   |   |
| Adjunct                instructors   |   |                                 | 87     |   |   | 93 |   |   | 20 |   |   | 200 |   |
| Full-time                instructors |   |                                 | 59     |   |   | 70 |   |   | 6 |   |   | 135 |   |
| Tutors                and Testers    |   |                                 | 23     |   |   | 9 |   |   | - |   |   | 32 |   |
| Admissions                staff      |   |                                 | 28     |   |   | 39 |   |   | 6 |   |   | 73 |   |
| Deans                and staff       |   |                                 | 4      |   |   | 22 |   |   | - |   |   | 26 |   |
| Academic                advisors     |   |                                 | 13     |   |   | 5 |   |   | 2 |   |   | 20 |   |
| Librarians                           |   |                                 | 8      |   |   | 5 |   |   | - |   |   | 13 |   |
| Total                                |   |                                 | 222    |   |   | 243 |   |   | 34 |   |   | 499 |   |

|                                            |   | **Year                ended December 31,** |   |
|-------------------------------------------------|--------|--------------------------------------------|--------|
|                                            |   | **2006**                                   |   | **2005** |   |
| Salaries                and benefits            |   |                                       | 27.2   | % |   | 25.4. | % |
| Marketing                                       |   |                                       | 10.6   |   |   | 10.1 |   |
| Depreciation                                    |   |                                       | 4.3    |   |   | 4.1 |   |
| Professional                and consulting fees |   |                                       | 3.6    |   |   | 4.5 |   |
| Non                cash compensation            |   |                                       | 2.5    |   |   | 0.8 |   |
| Other                expenses                   |   |                                       | 24.7   |   |   | 21.7 |   |
| Total                                           |   |                                       | 72.9   | % |   | 66.6 | % |

** **

----

|                                    |   | **2006** |       |  **2005** |   |
|-----------------------------------------|--------|----------|------------|----------------|--------|
| Rent                and utilities       |   | $        | 7,583,000  |           | $      | 4,422,000 |   |
| Security                                |   |     | 1,152,000  |           |   | 1,049,000 |   |
| Insurance                               |   |     | 845,000    |           |   | 576,000 |   |
| Supplies                                |   |     | 503,000    |           |   | 422,000 |   |
| Telephone                               |   |     | 731,000    |           |   | 771,000 |   |
| Equipment                rental         |   |     | 441,000    |           |   | 370,000 |   |
| Travel                and entertainment |   |     | 177,000    |           |   | 203,000 |   |
| Bad                debts*               |   |     | 1,883,000  |           |   | 1,257,000 |   |
| Taxes                                   |   |     | 795,000    |           |   | 356,000 |   |
| Total                                   |   | $        | 14,110,000 |           | $      | 9,426,000 |   |

----

----

**Year      ended December 31, 2005 Compared to Year ended December 31,      2004**

|                                                                   |   | **Year                ended December 31,** |   |
|------------------------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                                   |   | **2005**                                   |   | ** ****2004** |   |
|                                                                   |   |                                       |   |   |   |
| Total                revenue                                           |   |                                       | 100.0  | % |   | 100.0 | % |
|                                                                   |   |                                       |   |   |   |   |   |
| Cost                of revenue                                         |   |                                       | 31.4   |   |   | 25.5 |   |
| Selling,                general and administrative expenses            |   |                                       | 66.6   |   |   | 60.5 |   |
| Loss                on settlement of tuition disallowance              |   |                                       | -      |   |   | 3.0 |   |
| Total                operating expenses                                |   |                                       | 98.0   |   |   | 89.0 |   |
| Other                income(expense)                                   |   |                                       | (0.7   | ) |   | (0.5 | ) |
| Income                before provision for (benefit from) income taxes |   |                                       | 1.3    |   |   | (10.6 | ) |
| Net                income                                              |   |                                       | 0.7    | % |   | 18.9 | % |

----

** **

|                                 |   |  **December                31,                2005** |   |
|--------------------------------------|--------|-----------------------------------------------------------|--------|
|                                 |   | **Interboro**                                             |   | **TCI** |   | **PSB** |   | **Total** |   |
| Adjunct                instructors   |   |                                                      | 127    |   |   | 92 |   |   | 3 |   |   | 222 |   |
| Full-time                instructors |   |                                                      | 78     |   |   | 78 |   |   | 1                157 |   |   |   |   |
| Tutors                and Testers    |   |                                                      | 44     |   |   | 6 |   |   | - |   |   | 50 |   |
| Admissions                staff      |   |                                                      | 44     |   |   | 43 |   |   | 6 |   |   | 93 |   |
| Deans                and staff       |   |                                                      | 10     |   |   | 25 |   |   | 1 |   |   | 36 |   |
| Academic                advisors     |   |                                                      | 19     |   |   | 6 |   |   | - |   |   | 25 |   |
| Librarians                           |   |                                                      | 11     |   |   | 5 |   |   | - |   |   | 16 |   |
| Total                                |   |                                                      | 333    |   |   | 255 |   |   | 11 |   |   | 599 |   |

----

|                                            |   | **Year                ended December 31**, |   |
|-------------------------------------------------|--------|--------------------------------------------|--------|
|                                            |   | **2005**                                   |   | **2004** |   |
|                                            |   |                                       |   |   |   |
| Salaries                and benefits            |   |                                       | 25.4   | % |   | 29.2 | % |
| Marketing                                       |   |                                       | 10.1   |   |   | 9.0 |   |
| Depreciation                                    |   |                                       | 4.1    |   |   | 3.1 |   |
| Professional                and consulting fees |   |                                       | 4.5    |   |   | 2.2 |   |
| Non                cash compensation            |   |                                       | 0.8    |   |   | 1.2 |   |
| Other                expenses                   |   |                                       | 21.6   |   |   | 15.8 |   |
| Total                                           |   |                                       | 66.5   | % |   | 60.5 | % |

----

|                                    |   | **2005** |      | **2004** |   |
|-----------------------------------------|--------|----------|-----------|----------|--------|
|                                    |   |     |      |     |   |
| Rent                and utilities       |   | $        | 4,422,000 |     | $      | 2,398,000 |   |
| Security                                |   |     | 1,049,000 |     |   | 129,000 |   |
| Insurance                               |   |     | 576,000   |     |   | 426,000 |   |
| Supplies                                |   |     | 422,000   |     |   | 381,000 |   |
| Telephone                               |   |     | 771,000   |     |   | 594,000 |   |
| Equipment                rental         |   |     | 370,000   |     |   | 216,000 |   |
| Travel                and entertainment |   |     | 203,000   |     |   | 237,000 |   |
| Bad                debts*               |   |     | 1,257,000 |     |   | - |   |
| Taxes                                   |   |     | 356,000   |     |   | 124,000 |   |
| Total**                                 |   | $        | 9,426,000 |     | $      | 4,505,000 |   |

----

----

**Financial      Condition, Liquidity and Capital Resources**

|                                              |   | Payments                due by period(in                thousands of dollars) |   |
|---------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|
|                                              |   |  Total                                                                   |   | Less                thanOne                year |   | 1-3Years |   | 4-5years |   | More                than5                years |   |
| Line                of Credit                     |   | $                                                                             | 2,000  |   | $ | 2,000 |   | $ | - |   | $ | - |   | $ | - |   |
| Long-term                debt                     |   |                                                                          | 12,064 |   |   | 2,386 |   |   | 9,597 |   |   | 81 |   |   | - |   |
| Capital                leases                     |   |                                                                          | 462    |   |   | 327 |   |   | 135 |   |   | - |   |   | - |   |
| Operating                leases                   |   |                                                                          | 46,651 |   |   | 6,430 |   |   | 18,398 |   |   | 14,223 |   |   | 7,600 |   |
| Total                contractual cash obligations |   | $                                                                             | 61,177 |   | $ | 11,143 |   | $ | 28,130 |   | $ | 14,304 |   | $ | 7,600 |   |

----

**Item      7A. Quantitative and Qualitative Disclosures about Market      Risk.**

*Interest      Rate Risk*

----

**PART      II**

**OTHER      INFORMATION**

**Item      8.**
**      Financial Statements.**

**Item      9. Changes in and Disagreements with Accountants on Accounting and Financial      Disclosures.**

**Item      9A. Controls and Procedures.**

*Disclosure      Controls and Procedures*

*Remediation*

----

*Control      Environment:*

| ·   | EVCI                began using undercover personnel to test compliance, at all of EVCI’s                colleges, with regulations relating to enrollment processes. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A                document scanner that is used to convert student records at Interboro                to                electronic format became functional beginning with the fall 2006                semester. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Revenue      and Student Accounts Receivable:*

| **·  ** | We                further mitigated the risk of students improperly receiving federal                and                state financial aid by refining a multi-step process to more quickly                identify those students who have become ineligible for financial                aid as a                result of poor attendance or academics. |
|------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We                completed documenting new procedures for estimating the collectibility                of                Interboro’s accounts receivable. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Cash      Management:*

* *

*Property      Plant and Equipment: *

**Item      9B. Other Information.**

----

**PART      III**

**PART      IV**

**Item      15. Exhibits and Financial Statement Schedules**
**.**

| Exhibit                No.* |    | Description                of Exhibit                                                                                                                                                |
|-----------------------------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        |    |                                                                                                                                                                                 |
| 3.1[1]                      | — | Certificate                of Incorporation of the Registrant.                                                                                                                       |
|                        |    |                                                                                                                                                                                 |
| 3.2[1]                      | — | Certificate                of Merger of Educational Video Conferencing, Inc. (a New York Corporation)                into the Registrant (a Delaware Corporation).                   |
|                        |    |                                                                                                                                                                                 |
| 3.3[1]                      | — | Certificate                of Correction of the Certificate of Incorporation of the                Registrant.                                                                       |
|                        |    |                                                                                                                                                                                 |
| 3.4[3]                      | — | Certificate                of Amendment, dated February 22, 1999, to Certificate of Incorporation                of                the Registrant.                                   |
|                        |    |                                                                                                                                                                                 |
| 3.5[23]                     | — | Amended                and Restated By-Laws of the Registrant.                                                                                                                       |
|                        |    |                                                                                                                                                                                 |
| 3.6[5]                      | — | Certificate                Eliminating Reference to Series A 7.5% Convertible Preferred Stock                from                the Certificate of Incorporation of the Registrant. |
|                        |    |                                                                                                                                                                                 |
| 3.7[16]                     | — | Certificate                of Amendment, dated May 23, 2002, to Certificate of Incorporation                of the                Registrant.                                        |
|                        |    |                                                                                                                                                                                 |
| 3.8[5]                      | — | Certificate                Eliminating Reference to Series B 7% Convertible Preferred Stock                from the                Certificate of Incorporation of the Registrant.   |
|                        |    |                                                                                                                                                                                 |
| 3.9[5]                      | — | Certificate                Eliminating Reference to Series C 8% Convertible Preferred Stock                from the                Certificate of Incorporation of the Registrant.   |
|                        |    |                                                                                                                                                                                 |
| 3.10[20]                    | — | Certificate                of Amendment, filed August 9, 2004, to Certificate of Incorporation                of the                Registrant.                                      |
|                        |    |                                                                                                                                                                                 |
| 4.2[2]                      | — | Form                of Common Stock certificate.                                                                                                                                     |

----

| 4.3[4]                      | — | Warrant                Agreement, dated January 14, 2000, between the Registrant and Bruce.                R.                Kalisch.                                                                                                                 |
|-----------------------------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        |    |                                                                                                                                                                                                                                                  |
| 4.4[6]                      | — | Warrant                Agreement, dated April 18, 2000, between the Registrant and Peter                J.                Solomon Company Limited.                                                                                                    |
|                        |    |                                                                                                                                                                                                                                                  |
| 4.5[7]                      | — | Form                of Warrant issued to each seller of shares of ICTS,                Inc.                                                                                                                                                           |
|                        |    |                                                                                                                                                                                                                                                  |
| 4.6[14]                     | — | Common                Stock Purchase Warrant issued in September 2003, to purchase 45,000                shares                of the Registrant’s common stock.                                                                                |
|                        |    |                                                                                                                                                                                                                                                  |
| 4.7[17]                     | — | Common                Stock Purchase Warrant issued to placement agent on March 29,                2004.                                                                                                                                              |
|                        |    |                                                                                                                                                                                                                                                  |
| 10.1[28]                    | — | Amended                and Restated Employment Agreement between the Registrant and Dr.                Arol I.                Buntzman, dated August 12, 2005.                                                                                        |
|                        |    |                                                                                                                                                                                                                                                  |
| 10.2[28]                    | — | Amended                and Restated Employment Agreement between the Registrant and Dr.                John J.                McGrath, dated August 12, 2005.                                                                                         |
|                        |    |                                                                                                                                                                                                                                                  |
| 10.3                (a)[9]  | — | Employment                Agreement between the Registrant and Richard Goldenberg, dated January                1,                2003.                                                                                                               |
|                        |    |                                                                                                                                                                                                                                                  |
| 10.3                (b)[23] | — | Letter                agreement, dated September 30, 2005, amending Employment Agreement                between                the Registrant and Richard Goldenberg dated January 1,                2003.                                            |
|                        |    |                                                                                                                                                                                                                                                  |
| 10.4[10]                    | — | Amended                and Restated 1998 Incentive Stock Option Plan of the                Registrant.                                                                                                                                                |
|                        |    |                                                                                                                                                                                                                                                  |
| 10.5[11]                    | — | 2001                Non-Qualified Stock Option Plan.                                                                                                                                                                                                  |
|                        |    |                                                                                                                                                                                                                                                  |
| 10.6[9]                     | — | Form                of Change in Control Agreement used for agreements the Registrant                has with                each of Dr. Arol I. Buntzman, Dr. John J. McGrath, and Richard Goldenberg,                dated February 11, 2003.       |
|                        |    |                                                                                                                                                                                                                                                  |
| 10.7[1]                     | — | Form                of Indemnification Agreement. [Used for each director and executive                officer of the Registrant.]                                                                                                                    |
|                        |    |                                                                                                                                                                                                                                                  |
| 10.8[4]                     | — | Stock                Purchase Agreement, dated January 14, 2000, among Bruce R. Kalisch,                Interboro Holding, Inc. and Interboro Institute, Inc.                                                                                         |
|                        |    |                                                                                                                                                                                                                                                  |
| 10.9[12]                    | — | Lease                Agreement between 444 Realty Company and Interboro Institute, Inc.                dated                July 27, 1983, as amended by agreements dated September 20, 1988,                September 1, 1992, and February 1, 1993. |
|                        |    |                                                                                                                                                                                                                                                  |
| 10.10[12]                   | — | Lease                Agreement between Interboro Institute, Inc. and JUYI, Inc., dated                January                26, 2001.                                                                                                                |

----

| 10.11[8]                     | — | Promissory                Note for $1,000,000, dated August 4, 2003, payable by Interboro Institute,                Inc. to North Fork Bank.                                                                                                                                                                                                                       |
|------------------------------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                         |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.12[8]                     | — | Form                of the Registrant’s Subscription and Registration Rights Agreement                relating to the Registrant’s August 1, 2003 issuance of common stock and                warrants.                                                                                                                                                |
|                         |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.13[13]                    | — | Settlement                Agreement, made October 3, 2003, between Amaranth Trading L.L.C.                and the                Registrant.                                                                                                                                                                                                                       |
|                         |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.14[13]                    | — | Form                of Share Claim Purchase and Registration Rights Agreement between                the                Registrant and each investor acquiring a portion of the Amaranth                Trading                L.L.C.’s rights to claims to shares of EVCI’s common stock upon conversion                of Series B Preferred shares. |
|                         |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.15[14]                    | — | Third                Amendment and Lease Extension Agreement, made as of August 1, 2003,                between 444 Realty Company, L.L.C. and Interboro Institute,                Inc.                                                                                                                                                                            |
|                         |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.16[15]                    | — | Ownership                and Registration Rights Agreement, dated November 11, 2003, between                the                Registrant and JLF Partners I, L.P., JLF Partners II, L.P. and JLF                Offshore Fund.                                                                                                                                    |
|                         |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.17(a)[16]                 | — | Employment                Agreement between the Registrant and Joseph D. Alperin datedJanuary                1, 2004.                                                                                                                                                                                                                                              |
|                         |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.17                (b)[23] | — | Letter                agreement, dated September 30, 2005, amending Employment Agreement                between                the Registrant and Joseph D. Alperin dated January 1,                2004.                                                                                                                                                          |
|                         |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.18[16]                    | — | Option                Agreement between the Registrant and Joseph D. Alperin dated January                1, 2004.                                                                                                                                                                                                                                                 |
|                         |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.19[16]                    | — | Change                of control letter agreement between the Registrant and Joseph D.                Alperin                dated January 1, 2004.                                                                                                                                                                                                                |
|                         |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.20[16]                    | — | Agreement,                made February 28, 2004, between Interboro Institute, Inc. and OPEIU                Local                153, AFL-CIO.                                                                                                                                                                                                                    |
|                         |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.21[17]                    | — | Securities                Purchase Agreement, dated March 29, 2004, by and among the Registrant                and                each buyer named in the Schedule of Buyers.                                                                                                                                                                                      |
|                         |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.22[17]                    | — | Registration                Rights Agreement, dated March 29, 2004, by and among the Registrant                and                each buyer named in the Schedule of Buyers.                                                                                                                                                                                      |
|                         |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.23[18]                    | — | Ownership                and Registration Rights Agreement, dated April 2, 2004, by and among                the                Registrant and nine funds managed by Wellington Management Company,                LLP.                                                                                                                                            |
|                         |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.24[19]                    | — | 2004                Amended and Restated Incentive Stock                Plan                                                                                                                                                                                                                                                                                       |

----

| 10.25[20]                    | — | Form                of Stock Option Agreement (Nonqualified Stock Option)                                                                                                                                                                                                                                                                                                                                                                                         |
|------------------------------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.26[20]                    | — | Form                of Stock Option Agreement (Nonqualified Stock Option) covering option                grants to executive officers that were approved at the Registrant’s July                27, 2004 stockholders meeting.                                                                                                                                                                                                                             |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.27[21]                    | — | Lease                made November 17, 2003 between Spruce Spires Associates, LP, and                Interboro                Institute, Inc.                                                                                                                                                                                                                                                                                                                     |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.28                (a)[22] | — | Sublease                for Premises at 37-02 Main Street, Flushing, NY 11354, dated March                28, 2005, between Genking, LLC and Interboro Institute, Inc. with                Exhibit                A and letter agreement, dated April 15, 2005, amending such sublease.                                                                                                                                                                           |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.28                (b)[22] | — | Consent                to Sublease, dated April 22, 2005, among Mehran Enterprises Ltd.,                Futurama                Home Furniture of Queens, Inc., Genking, LLC and Interboro Institute,                Inc.                                                                                                                                                                                                                                         |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.28                (c)[22] | — | Sublease,                dated March 30, 2004, between Futurama Home Furniture of Queens,                Inc. and                Genking, LLC.                                                                                                                                                                                                                                                                                                                    |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.28                (d)[22] | — | Agreement                of Lease, dated March 6, 2001, between Mehran Enterprise Ltd. and                Futurama                Home Furniture of Queens, Inc.                                                                                                                                                                                                                                                                                                  |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.29                [24]    | — | Stock                Purchase Agreement, dated September 30, 2005, among EVCI Career Colleges                Holding Corp., Technical Career Institutes, Inc., East Coast Training                Services of Delaware, Inc., East Coast Capital Corp. and North American                Training Services, Inc., with Exhibits (Schedules will be provided                supplementally to the Securities and Exchange Commission upon                request). |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.30(a)[25]                 | — | Loft                Lease dated as of September 1, 2004 between Getty Square Partners                LLC and                Interboro Institute, Inc.                                                                                                                                                                                                                                                                                                             |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.30(b)[25]                 | — | Letter                agreement dated August 18, 2004 between Getty Square Partners LLC                and                Interboro Institute, Inc.                                                                                                                                                                                                                                                                                                               |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.30(c)[25]                 | — | First                Amendment to Lease dated as of July 14, 2005 between Getty Square                Partners                LLC and Interboro Institute, Inc.                                                                                                                                                                                                                                                                                                   |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.31[28]                    | — | 2004                Amended and Restated Incentive Stock Plan Restricted Stock Award                Agreement, dated August 12, 2005, between the Registrant and Dr.                Arol I.                Buntzman.                                                                                                                                                                                                                                              |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.32[28]                    | — | 2004                Amended and Restated Incentive Stock Plan Restricted Stock Award                Agreement, dated August 12, 2005, between the Registrant and Dr.                John J.                McGrath.                                                                                                                                                                                                                                               |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.33                (a)[26] | — | Credit                Agreement, dated as of September 16, 2005, among the Registrant,                the                Guarantors from time-to-time parties thereto, the lenders from                time-to-time parties thereto and Harris                N.A.                                                                                                                                                                                                |

----

| 10.33                (b) [28] | — | First                Amendment to Credit Agreement , dated as of November 10, 2005, between                the                Registrant and Harris, N.A.                                                                                                                                                                                                                                     |
|-------------------------------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          |    |                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.34                [26]     | — | Security                Agreement, dated as of September 16, 2005, among EVCI and other Debtors                and Harris N.A.                                                                                                                                                                                                                                                                |
|                          |    |                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.35                [26]     | — | Trademark                Collateral Agreement, dated September 16, 2005, between Technical                Career                Institutes, Inc. and Harris N.A.                                                                                                                                                                                                                              |
|                          |    |                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.36                [27]     | — | Employment                Agreement, dated as of September 29, 2005, between EVCI andJoseph                J. Looney.                                                                                                                                                                                                                                                                         |
|                          |    |                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.37                [27]     | — | Change                of control letter agreement, dated September 29, 2005, between EVCI                and                Joseph J. Looney.                                                                                                                                                                                                                                                 |
|                          |    |                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.38                [28]     | — | Lease                Agreement between Brill & Sharma Equities and Pennsylvania School of                Business for a term commencing June 1, 2005.                                                                                                                                                                                                                                     |
|                          |    |                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.39                (a)[28]  | — | Net                Lease, dated as of December 19, 1997, between Overtime Properties                LLC and                Technical Career Institutes, Inc.                                                                                                                                                                                                                                  |
|                          |    |                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.39                (b)[28]  | — | First                Amendment of Lease dated as of October 1, 2002 between Overtime                Properties, LLC and Technical Career Institutes, Inc.                                                                                                                                                                                                                                     |
|                          |    |                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.40                (a)[28]  | — | Lease,                dated October 11, 1994, between F.H.E.A. Associates and Technical                Career                Institutes, Inc.                                                                                                                                                                                                                                                 |
|                          |    |                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.40                (b)[28]  | — | First                Amendment of Lease, dated January 20, 1995, between F.H.E.A. Associates                and Technical Career Institutes, Inc.                                                                                                                                                                                                                                             |
|                          |    |                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.40                (c)[28]  | — | Second                Modification and Extension of Lease Agreement, dated April 15, 2005,                between Eighth Avenue Limited Liability Company and Technical Career                Institutes, Inc.                                                                                                                                                                                |
|                          |    |                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.41                (a)[28]  | — | Collective                Bargaining Agreement between Technical Career Institutes, Inc. and                T.O.P.                Local 2110 UAW, AFL-CIO, effective October 10, 1992- October 9, 1995,                and                covering office clerical employees.                                                                                                                 |
|                          |    |                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.41                (b)[28]  | — | Memorandum                of Agreement, dated October 10, 1995, between T.O.P. Local 2110                UAW-AFL-CIO and Technical Career Institutes, Inc., amending collective                bargaining agreement between the parties covering office and clerical                employees, which was effective October 10, 1992- October 9,                1995.                          |
|                          |    |                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.41                (c)[28]  | — | Memorandum                of Agreement, dated October ____, 1998, between T.O.P. Local 2110                UAW-AFL-CIO and Technical Career Institutes, Inc., amending collective                bargaining agreement between the parties covering office clerical                employees, which was effective from October 10, 1995 through October                9,                1998. |

----

| 10.41                (d)[28] | — | Collective                Bargaining Agreement between Technical Career Institutes, Inc. and                T.O.P.                Local 2110 UAW-AFL-CIO effective October 10, 1998-October 9, 2001,                covering instructors, laboratory technicians and maintenance persons                (This                agreement amends and restates the prior collective bargaining agreements                with the instructors, laboratory technicians and maintenance                employees.)                                                                |
|------------------------------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.41                (e)[28] | — | Memorandum                of Agreement, dated October 10, 2001, between T.O.P. Local 2110                UAW-AFL-CIO and Technical Career Institutes, Inc., amending (A) collective                bargaining agreement between the parties covering instructors, laboratory                technicians and maintenance employees and (B) collective bargaining                agreement between the parties covering office clerical employees,                each                such prior agreement effective October 10, 1998 through October 9,                2001. |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.41                (f)[28] | — | Memorandum                of Agreement, dated October 10, 2004, between T.O.P. Local 2110                UAW-AFL-CIO and Technical Career Institutes, Inc., amending (A) collective                bargaining agreement between the parties covering instructors, laboratory                technicians and maintenance employees and (B) collective bargaining                agreement between the parties covering office clerical employees,                each                such agreement effective October 10, 2001 through October 9,                2004.       |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.42                [29]    | — | Letter                agreement, dated March 1, 2006, between the Registrant and Dr.                John J. McGrath.                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.43                [29]    | — | Form                of Restricted Stock Award Agreement for the restricted stock awards                to                participant's in the March 2006 salary reduction plan, including                Dr. John                J. McGrath, Dr. Arol I. Buntzman and Joseph J. Looney, without Annexes                A                and B.                                                                                                                                                                                                                              |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.44                [29]    | — | Employment                Agreement, dated March 1, 2006, between the Registrant andJoseph                D. Alperin.                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.45                [29]    | — | Restricted                Stock Award Agreement, dated March 1, 2006, between the Registrant                and                Joseph D. Alperin, without Annex A.                                                                                                                                                                                                                                                                                                                                                                                                          |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.46[34]                    | — | Amended                and Restated Credit Agreement dated as of September 16, 2005, amended                and                restated as of March 31, 2006, among EVCI Career Colleges Holding                Corp.,                the Guarantors from time to time parties hereto, and Harris N.A.                as                lender. Schedules will be provided supplementally to the Securities                and                Exchange Commission upon request.                                                                                             |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.47[35]                    | — | First                Amendment, made April 30, 2006, to Amended and Restated Credit Agreement                dated as of September 16, 2005 and amended and restated as of March                31,                2006.                                                                                                                                                                                                                                                                                                                                                    |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.48[36]                    | — | Second                Amendment, made June 26, 2006, to Amended and Restated Credit Agreement                dated as of September 16, 2005 and amended and restated as of March                31,                2006.                                                                                                                                                                                                                                                                                                                                                    |
|                         |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.49[36]                    | — | Waiver                Agreement, made August 9, 2006, relating to Amended and Restated                Credit                Agreement dated September 16, 2005 and amended and restated as of                March                31, 2006.                                                                                                                                                                                                                                                                                                                                 |

----

| 10.50[37]                  | — | Letter                Agreement, dated October 24, 2006, between the Registrant andDr.                Arol I. Buntzman.                                                                                                                                                                                                                    |
|----------------------------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       |    |                                                                                                                                                                                                                                                                                                                                       |
| 10.51**                    | — | Memorandum                of Agreement dated January 30, 2007 between Office & Professional                Employees International Union Local 153, AFL-CIO, and Interboro                Institute.                                                                                                                                   |
|                       |    |                                                                                                                                                                                                                                                                                                                                       |
| 10.52                (a)** | — | Securities                Purchase Agreement, dated as of April 24, 2007, (the “SPA”) between the                Registrant and ComVest Investment Partners III, L.P. (“ComVest”).                Schedules will be provided supplementally to the Securities and Exchange                Commission upon request. |
|                       |    |                                                                                                                                                                                                                                                                                                                                       |
| 10.52                (b)** | — | Exhibit                A to Securities Purchase Agreement: Form of ComVest Secured Convertible                Promissory .                                                                                                                                                                                                                 |
|                       |    |                                                                                                                                                                                                                                                                                                                                       |
| 10.52                (c)** | — | Exhibit                C to Securities Purchase Agreement: Intercreditor                Agreement.                                                                                                                                                                                                                                         |
|                       |    |                                                                                                                                                                                                                                                                                                                                       |
| 10.52                (d)** | — | Exhibit                D to Securities Purchase Agreement: Form of ComVest Registration                Rights                Agreement.                                                                                                                                                                                                    |
|                       |    |                                                                                                                                                                                                                                                                                                                                       |
| 10.52                (e)** | — | Exhibit                E to Securities Purchase Agreement: Form of Security                Agreement.                                                                                                                                                                                                                                      |
|                       |    |                                                                                                                                                                                                                                                                                                                                       |
| 10.52                (f)** | — | Exhibit                F to Securities Purchase Agreement: Form of ComVest                Warrant.                                                                                                                                                                                                                                         |
|                       |    |                                                                                                                                                                                                                                                                                                                                       |
| 10.58**                    | — | Letter                Agreement regarding employment, dated April 24, 2007, between the                Registrant and Dr. Arol I. Buntzman.                                                                                                                                                                                                |
|                       |    |                                                                                                                                                                                                                                                                                                                                       |
| 10.54**                    | — | Letter                Agreement regarding employment, dated April 24, 2007, between the                Registrant and Dr. John J. McGrath.                                                                                                                                                                                                 |
|                       |    |                                                                                                                                                                                                                                                                                                                                       |
| 10.55**                    | — | Letter                Agreement regarding employment, dated April 24, 2007, between the                Registrant and Joseph D. Alperin, Esq.                                                                                                                                                                                              |
|                       |    |                                                                                                                                                                                                                                                                                                                                       |
| 10.56**                    | — | Employment                Agreement, dated April 24, 2007, between the Registrant and Stephen                Schwartz.                                                                                                                                                                                                                     |
|                       |    |                                                                                                                                                                                                                                                                                                                                       |
| 10.57                (a)** | — | Purchase                Agreement, dated April 24, 2007, between the Registrant and Dr. Arol                I.                Buntzman..                                                                                                                                                                                                   |
|                       |    |                                                                                                                                                                                                                                                                                                                                       |
| 10.57                (b)** | — | Purchase                Agreement, dated April 24, 2007, between the Registrant and Dr. John                J.                McGrath.                                                                                                                                                                                                     |
|                       |    |                                                                                                                                                                                                                                                                                                                                       |
| 10.57                (c)** | — | Purchase                Agreement, dated April 24, 2007, between the Registrant and Joseph                D.                Alperin.                                                                                                                                                                                                       |
|                       |    |                                                                                                                                                                                                                                                                                                                                       |
| 10.57                (d)** | — | Purchase                Agreement, dated April 24, 2007, between the Registrant and Stephen                Schwartz.                                                                                                                                                                                                                       |

----

| 10.58**                  | — | Form                of Secured Convertible Promissory Note to be issued by Registrant                to each                of Arol I. Buntzman, John J. McGrath, Joseph D. Alperin and Stephen                Schwartz.                                                                                                                                           |
|--------------------------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.59**                  | — | Form                of Warrant to be issued by Registrant.                                                                                                                                                                                                                                                                                                         |
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.60**                  | — | Registration                Rights Agreement, dated April 24, 2007, among the Registrant and                Arol I.                Buntzman, John J. McGrath, Joseph D. Alperin and Stephen                Schwartz.                                                                                                                                               |
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.61**                  | — | Letter                Agreement, dated April 24, 2007, among ComVest, Dr. Arol I. Buntzman,                Dr.                John J. McGrath, Joseph D. Alperin, Esq. and Stephen                Schwartz.                                                                                                                                                        |
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.62**                  | — | Second                Amended and Restated Credit Agreement, dated April 24, 2007, among                the                Registrant, the Guarantors from time to time parties thereto, and                Harris                N.A. as lender. Schedules will be provided supplementally to the                Securities and Exchange Commission upon request. |
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 10.63**                  | — | Pledge                Agreement, dated April 24, 2007, between the Registrant and Harris                N.A.                                                                                                                                                                                                                                                       |
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 21**                     | — | Subsidiaries                of the Registrant.                                                                                                                                                                                                                                                                                                                     |
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 23.1***                  | — | Consent                of Goldstein Golub Kessler LLP.                                                                                                                                                                                                                                                                                                             |
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 31.1***                  | — | Certification                of Chief Executive Officer required by Rule 13a-14(a) under the Exchange                Act.                                                                                                                                                                                                                                          |
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 31.2***                  | — | Certification                of Chief Financial Officer required by Rule 13a-14(a) under the Exchange                Act.                                                                                                                                                                                                                                          |
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 32.1***                  | — | Certification                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as                adopted                pursuant to Section 906 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                        |
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 32.2***                  | — | Certification              of Chief              Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant              to Section 906 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                              |
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 99.1[21]                 | — | Text                of final report, dated March 7, 2005, detailing the calculation of                the TAP                disallowances resulting from the TAP audit of the 2000-01 through                2002-03                academic years of Interboro Institute, Inc.                                                                                   |
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 99.2                [24] | — | Press                Release dated June 30, 2005 related to the announcement of Exhibit                10.29(a) of this report.                                                                                                                                                                                                                                    |
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 99.3                [27] | — | Press                Release dated October 3, 2005 and captioned “EVCI Career Colleges Hires                Joseph J. Looney to serve as Chief Financial Officer.                                                                                                                                                                                            |
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 99.4                [28] | — | Press                Release dated October 19, 2005 and captioned “EVCI Career Colleges                Receives Draft Report of Compliance Review of Interboro                Institute.”                                                                                                                                                              |
|                     |    |                                                                                                                                                                                                                                                                                                                                                               |
| 99.5[30]                 | — | Unaudited                financial statements of Technical Career Institutes, Inc. as of                September                30, 2005 and for the nine months ended September 30, 2005 and 2004,                and                the notes related thereto.                                                                                                  |

----

| 99.6[30                   | — | Audited                financial statements of Technical Career Institutes, Inc. as                ofSeptember                30, 2004 and 2003 and for each of the years in the three-year period                ended                September 30, 2004 and the notes related thereto.                                                                                                |
|---------------------------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      |    |                                                                                                                                                                                                                                                                                                                                                                                    |
| 99.7                [30]  | — | Unaudited                pro forma financial information for the year ended December 31, 2004                and                the nine months ended September 30, 2005 and the notes related thereto.                                                                                                                                                                                 |
|                      |    |                                                                                                                                                                                                                                                                                                                                                                                    |
| 99.8                [31]  | — | Press                release dated December 5, 2005 and captioned “EVCI Career Colleges                Receives Final Report of Compliance Review of Interboro                Institute.”                                                                                                                                                                                   |
|                      |    |                                                                                                                                                                                                                                                                                                                                                                                    |
| 99.9                [31]  | — | Draft                Report of Compliance Review of Interboro Institute dated October                7,                2005.                                                                                                                                                                                                                                                            |
|                      |    |                                                                                                                                                                                                                                                                                                                                                                                    |
| 99.10[31]                 | — | Response                of Interboro Institute Inc., dated November 3, 2005, to two draft                reports                from the State Education Department of New York.                                                                                                                                                                                                        |
|                      |    |                                                                                                                                                                                                                                                                                                                                                                                    |
| 99.11                [31] | — | Letter                dated November 23, 2005 from Stephen H. Adolphus, President of Interboro                Institute, to Joseph P. Frey, Assistant Commissioner- Office of Quality                Assurance, New York State Education Department outlining Interboro                Institute’s revised admissions screening procedures.                                       |
|                      |    |                                                                                                                                                                                                                                                                                                                                                                                    |
| 99.12                [31] | — | Letter                dated November 21, 2005 from Steven M. Gombos of Ritzert & Leyton to                Joseph P. Frey, Assistant Commissioner, The State Education Department                outlining the results of the independent investigation for the Audit                Committee of the Board of Directors of EVCI Career Colleges Holding                Corp.        |
|                      |    |                                                                                                                                                                                                                                                                                                                                                                                    |
| 99.13                [31] | — | Letter                dated December 2, 2005 from Joseph P. Frey, Assistant Commissioner-                Office                of Quality Assurance, the State Education Department of New York                including                attachment titled “State Education Department Analysis of Interboro                Institute’s Response to the Draft Report.” |
|                      |    |                                                                                                                                                                                                                                                                                                                                                                                    |
| 99.14                [32] | — | Press                release dated January 13, 2006 and captioned “EVCI Career Colleges Reports                New Student Caps for Interboro’s Spring 2006 Through Spring 2007                Semesters.”                                                                                                                                                            |
|                      |    |                                                                                                                                                                                                                                                                                                                                                                                    |
| 99.15                [32] | — | Letter                dated December 19, 2005 with enclosures from the registrant to Joseph                P.                Frey, Assistant Commissioner.                                                                                                                                                                                                                              |
|                      |    |                                                                                                                                                                                                                                                                                                                                                                                    |
| 99.16                [32] | — | Letter                dated December 23, 2005 from Johanna Duncan-Poitier, Deputy Commissioner,                to the registrant.                                                                                                                                                                                                                                                       |
|                      |    |                                                                                                                                                                                                                                                                                                                                                                                    |
| 99.17                [32] | — | Letter                dated January 4, 2006 with enclosure from the registrant to Johanna                Duncan-Poitier, Deputy Commissioner.                                                                                                                                                                                                                                           |
|                      |    |                                                                                                                                                                                                                                                                                                                                                                                    |
| 99.18                [32] | — | Letter                dated January 11, 2006 from Johanna Duncan-Poitier, Deputy Commissioner,                to the registrant.                                                                                                                                                                                                                                                        |
|                      |    |                                                                                                                                                                                                                                                                                                                                                                                    |
| 99.19                [33] | — | Response                of Interboro Institute to the December 2, 2005 Report from the New                York                State Education Department.                                                                                                                                                                                                                               |

----

| 99.20                [33] | — | Letter                dated February 2, 2006 from the New York State Education Department                to                EVCI.                                                                           |
|---------------------------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      |    |                                                                                                                                                                                                       |
| 99.21[34]                 | — | Interboro                Institute’s Comprehensive Institutional Effectiveness Plan with                transmittal letter from the registrant dated February 22, 2006.                              |
|                      |    |                                                                                                                                                                                                       |
| 99.22[34]                 | — | Letter                dated March 13, 2006 from the New York State Education Department                to the                Registrant.                                                                   |
|                      |    |                                                                                                                                                                                                       |
| 99.23[34]                 | — | Letter                dated March 14, 2006 from the New York State Education Department                to the                Registrant.                                                                   |
|                      |    |                                                                                                                                                                                                       |
| 99.24[34]                 | — | Interboro                Institute’s Mid-Point Self Study dated March 28, 2006 (without attachments                with transmittal letter from the Registrant dated March 30,                2006.) |
|                      |    |                                                                                                                                                                                                       |

| 99.25** | — | Report                  of a Compliance Review of Interboro Institute June 19-20, 2006                  and October                  16-18, 2006; transmittal letter dated March 23, 2007 to Registrant                  from                  Joseph P. Frey of the New York State Education Department; Ratings                  for                  Each Checked Standard (for use in assessing the Compliance Review),                  and                  letter dated January 11, 2006 from Johanna Duncan-Poitier, Deputy                  Commissioner, referred to in the Compliance                  Report). |
|---------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| *   | Numbers                inside brackets indicate documents from which exhibits have been                incorporated by reference. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|
| **  | Previouslyfiled              on April 27, 2007.                                                                                   |
| *** | Filed                herewith.                                                                                                    |

| [1]    | Incorporated                by reference to the Registrant’s Registration Statement on Form SB-2,                filed October                23, 1998, Registration No. 333-66085.                                   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                        |
| [2]    | Incorporated                by reference to Amendment No. 4, dated February 10, 1999, to the                Registrant’s Form SB-2, Registration No. 333-66085.                                                       |
|   |                                                                                                                                                                                                                        |
| [3]    | Incorporated                by reference to Registrant’s Form 10-QSB for the quarter ended September                30, 1999.                                                                                         |
|   |                                                                                                                                                                                                                        |
| [4]    | Incorporated                by reference to the Registrant’s Form 8-K dated January 14,                2000.                                                                                                          |
|   |                                                                                                                                                                                                                        |
| [5]    | Incorporated                by reference to the Registrant’s Form 8-K dated October 6,                2000.                                                                                                           |
|   |                                                                                                                                                                                                                        |
| [6]    | Incorporated                by reference to the Registrant’s Form 10-QSB for the quarter ended                September 30, 2000.                                                                                     |
|   |                                                                                                                                                                                                                        |
| [7]    | Incorporated                by reference to the Registrant’s Form 8-K dated July 1,                2001.                                                                                                              |
|   |                                                                                                                                                                                                                        |
| [8]    | Incorporated                by reference to the Registrant’s Form 10-QSB for the quarter ended                September 30, 2003.                                                                                     |
|   |                                                                                                                                                                                                                        |
| [9]    | Incorporated                by reference to the Registrant’s Form 10-KSB for the year ended December                31, 2002.                                                                                         |
|   |                                                                                                                                                                                                                        |
| [10]   | Incorporated                by reference to the Registrant’s Registration Statement on Form S-8 filed                December                31, 2002, Registration No. 333-102310.                                   |
|   |                                                                                                                                                                                                                        |
| [11]   | Incorporated                by reference to the Registrant’s Registration Statement on Form S-8 filed                October 23, 2001, Registration No. 333-72080.                                                    |
|   |                                                                                                                                                                                                                        |
| [12]   | Incorporated                by reference to the Registrant’s Form 10-QSB for the quarter ended                September 30, 2003.                                                                                     |
|   |                                                                                                                                                                                                                        |
| [13]   | Incorporated                by reference to the Registrant’s Form 8-K dated October 10,                2003.                                                                                                          |
|   |                                                                                                                                                                                                                        |
| [14]   | Incorporated                by reference to the Registrant’s Form 10-QSB for the quarter ended                September 30, 2003.                                                                                     |
|   |                                                                                                                                                                                                                        |
| [15]   | Incorporated                by reference to Amendment No. 1 to the Registrant’s Registration Statement                on Form                S-3, filed December 4, 2003, Registration No.                333-110567. |
|   |                                                                                                                                                                                                                        |
| [16]   | Incorporated                by reference to the Registrant’s Form 10-KSB/A for the year ended December                31, 2003.                                                                                       |
|   |                                                                                                                                                                                                                        |
| [17]   | Incorporated                by reference to the Registrant’s Form 8-K dated March 29,                2004.                                                                                                            |
|   |                                                                                                                                                                                                                        |
| [18]   | Incorporated                by reference to the Registrant’s Form 10-QSB for the quarter ended                September 30, 2004.                                                                                     |
|   |                                                                                                                                                                                                                        |
| [19]   | Incorporated                by reference to the Registrant’s definitive Proxy Statement dated May 2,                2005.                                                                                             |
|   |                                                                                                                                                                                                                        |
| [20]   | Incorporated                by reference to the Registrant’s Form 10-QSB for the quarter ended                September 30, 2004.                                                                                     |
|   |                                                                                                                                                                                                                        |
| [21]   | Incorporated                by reference to the Registrant’s Form 10-KSB for the year ended December                31, 2004.                                                                                         |
|   |                                                                                                                                                                                                                        |
| [22]   | Incorporated                by reference to the Registrant’s Form 8-K dated March 7, 2005.                                                                                                                            |

----

| [23]   | Incorporated                by reference to the Registrant’s Form 10-Q for the quarter ended September                30, 2005. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                  |
| [24]   | Incorporated                by reference to the Registrant’s Form 8-K dated July 1, 2005.                                       |
|   |                                                                                                                                  |
| [25]   | Incorporated                by reference to the Registrant’s Form 8-K dated July 18, 2005.                                      |
|   |                                                                                                                                  |
| [26]   | Incorporated                by reference to the Registrant’s Form 8-K dated September 16,                2005.                  |
|   |                                                                                                                                  |
| [27]   | Incorporated                by reference to the Registrant’s Form 8-K dated September 29,                2005.                  |
|   |                                                                                                                                  |
| [28]   | Incorporated                by reference to the Registrant’s Form 10-Q for the quarter ended September                30, 2005. |
|   |                                                                                                                                  |
| [29]   | Incorporated                by reference to the Registrant’s Form 8-K dated March 1,                2006.                       |
|   |                                                                                                                                  |
| [30]   | Incorporated                by reference to the Registrant’s Form 8-K/A dated September 16,                2005.                |
|   |                                                                                                                                  |
| [31]   | Incorporated                by reference to the Registrant’s Form 8-K dated December 5,                2005.                    |
|   |                                                                                                                                  |
| [32]   | Incorporated                by reference to the Registrant’s Form 8-K dated January 12,                2006.                    |
|   |                                                                                                                                  |
| [33]   | Incorporated                by reference to the Registrant’s Form 8-K dated February 3,                2006.                    |
|   |                                                                                                                                  |
| [34]   | Incorporated                by reference to the Registrant’s Form 10-K filed September 30,                2006.                 |
|   |                                                                                                                                  |
| [35]   | Incorporated                by reference to the Registrant’s Form 10-Q for the quarter ended March 31,                2006.     |
|   |                                                                                                                                  |
| [36]   | Incorporated                by reference to the Registrant’s Form 10-Q for the quarter ended June 30,                2006.      |
|   |                                                                                                                                  |
| [37]   | Incorporated                by reference to the Registrant’s Form 8-K dated October 26,                2006.                    |

----

**EVCI        CAREER COLLEGES HOLDING CORP.**

**AND        SUBSIDIARIES**

**CONSOLIDATED        FINANCIAL STATEMENTS**

**DECEMBER        31, 2006**

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**INDEX        TO CONSOLIDATED FINANCIAL STATEMENTS**

| Report                  of Independent Registered Public Accounting Firm                                                        |   |   | F-3                         |
|---------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------|
| Consolidated                  Financial Statements**:**                                                                         |   |   |                             |
| Balance                  Sheets as of December 31, 2006 and 2005                                                                |   |   | F-4                         |
| Statements                  of Operations for the Years Ended December 31, 2006, 2005, and                  2004                |   |   | F-5                         |
| Statements                  of Stockholders’ Equity for the Years Ended December 31, 2006, 2005 and                  2004 |   |   | F-6                         |
| Statements                  of Cash Flows for the Years Ended December 31, 2006 and 2005 and                  2004              |   |   | F-7                         |
| Notes                  to Consolidated Financial Statements                                                                     |   |   | F-8                  - F-26 |
| Schedule                  II - Valuation and Qualifying Accounts                                                                |   |   | F-26                        |

----

----

----

**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**CONSOLIDATED        BALANCE SHEETS**

|                                                                                                                                                                                    |   | **December                  31,****2006** |        | **December                  31,****2005** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|-------------|-------------------------------------------|--------|
|                                                                                                                                                                                    |   |                                 |        |                                 |   |
| **ASSETS**                                                                                                                                                                              |   |                                      |        |                                      |   |   |   |
| Current                  assets:                                                                                                                                                        |   |                                      |        |                                      |   |   |   |
| Cash                  and cash equivalents                                                                                                                                              |   | $                                         | 2,151,238   |                                      | $      | 9,273,206 |   |
| Student                  accounts receivable, less allowance for doubtful accounts                  of $3,608,249 and $2,449,488, respectively                                          |   |                                      | 5,860,856   |                                      |   | 6,125,927 |   |
| Other                  receivables                                                                                                                                                      |   |                                      | 955,384     |                                      |   | 284,021 |   |
| Prepaid                  income taxes                                                                                                                                                   |   |                                      | 329,986     |                                      |   | 93,629 |   |
| Prepaid                  expenses and other current assets                                                                                                                              |   |                                      | 712,681     |                                      |   | 778,204 |   |
| Total                  current assets                                                                                                                                                   |   |                                      | 10,010,145  |                                      |   | 16,554,987 |   |
| Property                  and Equipment - net                                                                                                                                           |   |                                      | 6,061,555   |                                      |   | 6,789,683 |   |
| Intangible                  assets                                                                                                                                                      |   |                                      | 11,958,985  |                                      |   | 12,832,881 |   |
| Goodwill                                                                                                                                                                                |   |                                      | 5,320,121   |                                      |   | 5,072,375 |   |
| Deferred                  income tax asset, net of valuation allowance of $6,957,500 and                  $2,037,500,                  respectively                                     |   |                                      | 5,557,500   |                                      |   | 5,557,500 |   |
| Other                  assets                                                                                                                                                           |   |                                      | 2,775,991   |                                      |   | 3,179,051 |   |
| Total                  Assets                                                                                                                                                           |   | $                                         | 41,684,297  |                                      | $      | 49,986,477 |   |
|                                                                                                                                                                                    |   |                                      |        |                                      |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY**                                                                                                                               |   |                                      |        |                                      |   |   |   |
|                                                                                                                                                                                    |   |                                      |        |                                      |   |   |   |
| Current                  liabilities:                                                                                                                                                   |   |                                      |        |                                      |   |   |   |
| Revolving                  credit line                                                                                                                                                  |   | $                                         | 2,000,000   |                                      | $      | 2,000,000 |   |
| Accounts                  payable and accrued expenses                                                                                                                                  |   |                                      | 10,453,786  |                                      |   | 4,629,163 |   |
| Current                  portion of accrued liability related to closed facility                                                                                                        |   |                                      | 296,517     |                                      |   | — |   |
| Deferred                  tuition revenue                                                                                                                                               |   |                                      | 195,096     |                                      |   | 3,347,608 |   |
| Current                  portion of capital lease obligation                                                                                                                            |   |                                      | 327,215     |                                      |   | 311,821 |   |
| Current                  portion of notes payable                                                                                                                                       |   |                                      | 2,386,232   |                                      |   | 2,625,000 |   |
| Total                  current liabilities                                                                                                                                              |   |                                      | 15,658,846  |                                      |   | 12,913,592 |   |
| Capital                  lease obligation, net of current portion                                                                                                                       |   |                                      | 135,620     |                                      |   | 466,743 |   |
| Notes                  payable, net of current portion                                                                                                                                  |   |                                      | 9,677,697   |                                      |   | 10,375,000 |   |
| Accrued                  liability related to closed facility, net of current                  portion                                                                                  |   |                                      | 1,491,329   |                                      |   | — |   |
| Deferred                  rent                                                                                                                                                          |   |                                      | 1,252,342   |                                      |   | 868,065 |   |
| Total                  liabilities                                                                                                                                                      |   |                                      | 28,215,834  |                                      |   | 24,623,400 |   |
| Stockholders'                  equity:                                                                                                                                                  |   |                                      |        |                                      |   |   |   |
| Preferred                  stock - $.0001 par value; authorized 1,000,000 shares: none                  issued and outstanding                                                          |   |                                      | —     |                                      |   | — |   |
| Common                  stock - $.0001 par value; authorized 20,000,000 shares; issued                  and outstanding 12,689,617 and 12,432,867 shares,                  respectively |   |                                      | 1,290       |                                      |   | 1,264 |   |
| Additional                  paid-in capital                                                                                                                                             |   |                                      | 52,677,754  |                                      |   | 51,030,320 |   |
| Accumulated                  deficit                                                                                                                                                    |   |                                      | (39,210,581 | )                                         |   | (25,668,507 | ) |
| Stockholders'                  equity                                                                                                                                                   |   |                                      | 13,468,463  |                                      |   | 25,363,077 |   |
| Total                  Liabilities and Stockholders' Equity                                                                                                                             |   | $                                         | 41,684,297  |                                      | $      | 49,986,477 |   |

----

**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**CONSOLIDATED        STATEMENTS OF OPERATIONS**

|                                                                       |   | **Year                  Ended December 31,** |        |
|----------------------------------------------------------------------------|--------|----------------------------------------------|-------------|
|                                                                       |   | **2006**                                     |        | **2005** |   | **2004** |   |
|                                                                       |   |                                    |        |    |   |    |   |
| Net                  revenue                                               |   | $                                            | 64,715,573  |   | $ | 50,401,280 |   | $ | 32,718,087 |   |
| Other                  income                                              |   |                                         | 730,819     |   |   | 340,284 |   |   | 351,886 |   |
| Total                  revenue                                             |   |                                         | 65,446,392  |   |   | 50,741,564 |   |   | 33,069,973 |   |
| Operating                  expenses:                                       |   |                                         |        |   |   |   |   |   |   |   |
| Cost                  of revenue                                           |   |                                         | 23,769,367  |   |   | 15,950,138 |   |   | 8,419,788 |   |
| Selling,                  general and administrative                       |   |                                         | 47,698,191  |   |   | 33,755,189 |   |   | 20,027,894 |   |
| Loss                  on closed facilities                                 |   |                                         | 1,926,361   |   |   | — |   |   | — |   |
| Loss                  on settlement of tuition disallowance                |   |                                         | 3,700,000   |   |   | — |   |   | 978,200 |   |
| Total                  operating expenses                                  |   |                                         | 77,093,919  |   |   | 49,705,327 |   |   | 29,425,882 |   |
| Income/(loss)                  from operations                             |   |                                         | (11,647,527 | ) |   | 1,036,237 |   |   | 3,644,091 |   |
| Other                  income (expense):                                   |   |                                         |        |   |   |   |   |   |   |   |
| Interest                  and financing costs                              |   |                                         | (2,012,357  | ) |   | (515,730 | ) |   | (225,992 | ) |
| Interest                  income                                           |   |                                         | 147,810     |   |   | 144,460 |   |   | 73,513 |   |
| Income/(loss)                  before provision/(benefit) for income taxes |   |                                         | (13,512,074 | ) |   | 664,967 |   |   | 3,491,612 |   |
| Provision/(benefit)                  for income taxes                      |   |                                         | 30,000      |   |   | 304,000 |   |   | (2,762,000 | ) |
| Net                  income/(loss) available to common stockholders        |   | $                                            | (13,542,074 | ) | $ | 360,967 |   | $ | 6,253,612 |   |
| Income/(loss)                  per common share:                           |   |                                         |        |   |   |   |   |   |   |   |
| Basic                                                                      |   | $                                            | (1.08       | ) | $ | 0.03 |   | $ | 0.53 |   |
| Diluted                                                                    |   | $                                            | (1.08       | ) | $ | 0.03 |   | $ | 0.50 |   |
| Weighted                  average of common shares outstanding:            |   |                                         |        |   |   |   |   |   |   |   |
| Basic                                                                      |   |                                         | 12,484,602  |   |   | 12,417,422 |   |   | 11,883,695 |   |
| Diluted                                                                    |   |                                         | 12,484,602  |   |   | 12,903,941 |   |   | 12,518,450 |   |

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**CONSOLIDATED        STATEMENTS OF STOCKHOLDERS’ EQUITY**

|                                              |   | **Common                  Stock**        |       |  **Additional** |   |                    |   |                        |       |
|---------------------------------------------------|--------|------------------------------------------|------------|----------------------|--------|------------------------------|--------|----------------------------------|------------|
|                                              |   | **Number****of                  Shares** |       |  **Amount**     |   |  **Paid-in****Capital** |   |  **Accumulated****Deficit** |       |  **Stockholders’****Equity** |   |
| Balance                  at December 31, 2003     |   |                                     | 10,862,452 |                 | $      | 1,090                        |   | $                                | 39,296,760 |   | $ | (32,283,086 | ) | $ | 7,014,764 |   |
| Issuance                  of common stock         |   |                                     | 1,038,962  |                 |   | 104                          |   |                             | 9,349,481  |   |   | — |   |   | 9,349,585 |   |
| Exercise                  of options and warrants |   |                                     | 353,859    |                 |   | 53                           |   |                             | 869,843    |   |   | __ |   |   | 869,896 |   |
| Cashless                  exercise of warrants    |   |                                     | 74,330     |                 |   | 7                            |   |                             | (7         | ) |   | — |   |   | — |   |
| Non                  cash compensation charges    |   |                                     | —    |                 |   | —                      |   |                             | 406,368    |   |   | — |   |   | 406,368 |   |
| Net                  income                       |   |                                     | —    |                 |   | —                      |   |                             | —    |   |   | 6,253,612 |   |   | 6,253,612 |   |
| Balance                  at December 31, 2004     |   |                                     | 12,329,603 |                 |   | 1,254                        |   |                             | 49,922,445 |   |   | (26,029,474 | ) |   | 23,894,225 |   |
|                                              |   |                                     |       |                 |   |                         |   |                             |       |   |   |   |   |   |   |   |
| Exercise                  of options and warrants |   |                                     | 103,264    |                 |   | 10                           |   |                             | 703,907    |   |   | — |   |   | 703,917 |   |
| Non                  cash compensation charges    |   |                                     | —    |                 |   | —                      |   |                             | 403,968    |   |   | — |   |   | 403,968 |   |
| Net                  income                       |   |                                     | —    |                 |   | —                      |   |                             | —    |   |   | 360,967 |   |   | 360,967 |   |
| Balance                  at December 31, 2005     |   |                                     | 12,432,867 |                 |   | 1,264                        |   |                             | 51,030,320 |   |   | (25,668,507 | ) |   | 25,363,077 |   |
| Exercise                  of options and warrants |   |                                     | 26,666     |                 |   | 3                            |   |                             | 19,262     |   |   | — |   |   | 19,265 |   |
| Restricted                  stock issuance        |   |                                     | 230,084    |                 |   | 23                           |   |                             | 274,451    |   |   | — |   |   | 274,474 |   |
| Non                  cash compensation charges    |   |                                     |       |                 |   |                         |   |                             | 1,353,721  |   |   | — |   |   | 1,353,721 |   |
| Net                  loss                         |   |                                     | —    |                 |   | —                      |   |                             | —    |   |   | (13,542,074 | ) |   | (13,542,074 | ) |
| Balance                  at December 31, 2006     |   |                                     | 12,689,617 |                 | $      | 1,290                        |   | $                                | 52,677,754 |   | $ | (39,210,581 | ) | $ | 13,468,463 |   |

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**CONSOLIDATED        STATEMENT OF CASH FLOWS**

|                                                                                                                                                                                                                                                                                                                                |   | **Year                  Ended December 31,** |        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|-------------|
|                                                                                                                                                                                                                                                                                                                                |   | **2006**                                     |        | **2005** |   | **2004** |   |
|                                                                                                                                                                                                                                                                                                                                     |   |                                    |        |    |   |    |   |
| Cash                  flows from operating activities:                                                                                                                                                                                                                                                                              |   |                                         |        |   |   |   |   |   |   |   |
| Net                  income/(loss)                                                                                                                                                                                                                                                                                                  |   | $                                            | (13,542,074 | ) | $ | 360,967 |   | $ | 6,253,612 |   |
| Adjustments                  to reconcile net income (loss) to net cash provided                  by/ (used in) operating activities:                                                                                                                                                                                               |   |                                         |        |   |   |   |   |   |   |   |
| Depreciation                  and amortization                                                                                                                                                                                                                                                                                      |   |                                         | 3,414,676   |   |   | 2,090,546 |   |   | 1,011,866 |   |
| Bad                  debts expense                                                                                                                                                                                                                                                                                                  |   |                                         | 1,882,775   |   |   | 1,256,802 |   |   | 55,000 |   |
| Non                  cash compensation expense                                                                                                                                                                                                                                                                                      |   |                                         | 1,628,195   |   |   | 403,968 |   |   | 406,368 |   |
| Deferred                  income taxes                                                                                                                                                                                                                                                                                              |   |                                         | —     |   |   | — |   |   | (3,557,500 | ) |
| Changes                  in operating assets and liabilities; net of effects of                  acquisition:                                                                                                                                                                                                                       |   |                                         |        |   |   |   |   |   |   |   |
| (Increase)/decrease                  in students accounts                  receivable                                                                                                                                                                                   |   |                                         | (1,617,704  | ) |   | 12,950,102 |   |   | (3,355,301 | ) |
| (Increase)/decrease                  in prepaid expenses and other current assets                                                                                                                                                                                                                                                   |   |                                         | (605,840    | ) |   | 79,106 |   |   | (34,043 | ) |
| (Increase)/decrease                  in other assets                                                                                                                                                                                                                                                                                |   |                                         | 38,304      |   |   | 13,120 |   |   | (171,128 | ) |
| Increase/(decrease)                  in accounts payable and accrued expenses                                                                                                                                                                                                                                                       |   |                                         | 5,524,623   |   |   | (1,960,181 | ) |   | 2,270,980 |   |
| Increase                  in accrued facility closedown costs                                                                                                                                                                                                                                                                       |   |                                         | 1,787,846   |   |   | — |   |   | — |   |
| Increase                  in income taxes payable/(prepaid income taxes)                                                                                                                                                                                                                                                            |   |                                         | (236,357    | ) |   | (423,358 | ) |   | 257,279 |   |
| Increase/(decrease)                  in deferred tuition revenue                                                                                                                                                                                                                                                                    |   |                                         | (3,152,512  | ) |   | (10,373,042 | ) |   | 826,889 |   |
| Increase                  in deferred rent                                                                                                                                                                                                                                                                                          |   |                                         | 384,277     |   |   | 101,355 |   |   | 766,710 |   |
| **Net                  cash provided by/(used in) operating activities**                                                                                                                                                                                                                                                            |   |                                         | (4,493,791  | ) |   | 4,499,385 |   |   | 4,730,732 |   |
| Cash                  flows from investing activities:                                                                                                                                                                                                                                                                              |   |                                         |        |   |   |   |   |   |   |   |
| Purchases                  of property and equipment                                                                                                                                                                                                                                                                                |   |                                         | (147,974    | ) |   | (2,701,157 | ) |   | (2,492,059 | ) |
| Deposits                  required                                                                                                                                                                                                                                                                                                  |   |                                         | 53,542      |   |   | (1,088,506 | ) |   | — |   |
| Release                  in restricted certificates of deposit                                                                                                                                                                                                                                                                      |   |                                         | —     |   |   | — |   |   | 259,210 |   |
| Repayment                  of notes receivable                                                                                                                                                                                                                                                                                      |   |                                         | —     |   |   | — |   |   | 90,000 |   |
| Payments                  on accrued purchase price payable                                                                                                                                                                                                                                                                         |   |                                         |        |   |   | — |   |   | (2,909,666 | ) |
| Cash                  received on funds received from escrow                                                                                                                                                                                                                                                                        |   |                                         | 52,254      |   |   | — |   |   | — |   |
| Cash                  paid on acquisitions, net of cash received of $1,176,709                                                                                                                                                                                                                                                      |   |                                         | —     |   |   | (15,561,042 | ) |   | — |   |
| **Net                  cash used in investing activities**                                                                                                                                                                                                                                                                          |   |                                         | (42,178     | ) |   | (19,350,705 | ) |   | (5,052,515 | ) |
| Cash                  flows from financing activities:                                                                                                                                                                                                                                                                              |   |                                         |        |   |   |   |   |   |   |   |
| Principal                  payments on capital lease obligation                                                                                                                                                                                                                                                                     |   |                                         | (315,729    | ) |   | (673,213 | ) |   | (1,075,719 | ) |
| Principal                  payment on notes payable                                                                                                                                                                                                                                                                                 |   |                                         | (2,000,000  | ) |   | (605,425 | ) |   | (839,778 | ) |
| Proceeds                  from issuance of debt                                                                                                                                                                                                                                                                                     |   |                                         | —     |   |   | 15,000,000 |   |   | — |   |
| Payment                  of deferred financing costs                                                                                                                                                                                                                                                                                |   |                                         | (289,535    | ) |   | (805,061 | ) |   | — |   |
| Proceeds                  from issuance of common stock                                                                                                                                                                                                                                                                             |   |                                         | —     |   |   | — |   |   | 9,349,585 |   |
| Proceeds                  from exercise of options and warrants                                                                                                                                                                                                                                                                     |   |                                         | 19,265      |   |   | 703,917 |   |   | 869,896 |   |
| **Net                  cash provided by/(used in) financing activities**                                                                                                                                                                                                                                                            |   |                                         | (2,585,999  | ) |   | 13,620,218 |   |   | 8,303,984 |   |
| Net                  increase (decrease) in cash and cash equivalents                                                                                                                                                                                                                                                               |   |                                         | (7,121,968  | ) |   | (1,231,102 | ) |   | 7,982,201 |   |
| Cash                  and cash equivalents at beginning of year                                                                                                                                                                                                                                                                     |   |                                         | 9,273,206   |   |   | 10,504,308 |   |   | 2,522,107 |   |
| Cash                  and cash equivalents at end of year                                                                                                                                                                                                                                                                           |   | $                                            | 2,151,238   |   | $ | 9,273,206 |   | $ | 10,504,308 |   |
| **Supplemental                  disclosures of cash flow information:**                                                                                                                                                                                                                                                             |   |                                         |        |   |   |   |   |   |   |   |
| Cash                  paid during the period for:                                                                                                                                                                                                                                                                                   |   |                                         |        |   |   |   |   |   |   |   |
| Interest                                                                                                                                                                                                                                                                                                                            |   | $                                            | 1,897,487   |   | $ | 148,967 |   | $ | 225,992 |   |
| Income                  taxes                                                                                                                                                                                                                                                                                                       |   | $                                            | —     |   | $ | 759,332 |   | $ | 604,546 |   |
| **Supplemental                  schedule of noncash investing and financing                  activities:**                                                                                                                                                                                                                          |   |                                         |        |   |   |   |   |   |   |   |
| Notes                  payable and capital lease obligations incurredin the acquisition of                  equipment                                                                                                                                                                                                               |   | $                                            | 1,063,929   |   | $ | 591,111 |   | $ | 1,538,387 |   |
| Increase                  in goodwill                                                                                                                                                                                                                                                                                               |   | $                                            | 300,000     |   | $ | — |   | $ | 314,102 |   |
| Decrease                  in accrued purchase price payable                                                                                                                                                                                                                                                                         |   | $                                            | 52,254      |   | $ | — |   | $ | 314,102 |   |
| The                  Company purchased all of the outstanding stock of Pennsylvania School                  of Business, Inc. and Technical Career Institutes, Inc. for an                  aggregate purchase price of $16,737,000 In conjunction with the                  acquisition, liabilities were assumed as follows: |   |                                         |        |   |   |   |   |   |   |   |
| Fair                  value of assets acquired                                                                                                                                                                                                                                                                                      |   | $                                            | —     |   | $ | 32,166,000 |   | $ | — |   |
| Cash                  paid for acquisitions                                                                                                                                                                                                                                                                                         |   | $                                            | —     |   | $ | 16,740,000 |   | $ | — |   |
| Liabilities                  assumed                                                                                                                                                                                                                                                                                                |   | $                                            | —     |   | $ | 15,426,000 |   | $ | — |   |

----

**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**1.        Principal Business Activity and Summary of Significant Accounting        Policies**

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

*Earnings        per Share*

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

|                                                                                                                                                                                           |   | **Year                  Ended December 31,** |       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|------------|
|                                                                                                                                                                                           |   | **2005**                                     |       | **2004** |   |
|                                                                                                                                                                                           |   |                                    |       |    |   |
| Reported                  net income available to common stockholders                                                                                                                          |   | $                                            | 360,967    |   | $ | 6,253,612 |   |
| Add:                  Stock-based employee compensation expense included in recorded                  net income, net of related tax effects                                                   |   |                                         | 403,968    |   |   | 406,368 |   |
| Deduct:                  Total stock-based employee compensation expense determined                  under fair-value-based method for all awards, net of related                  tax effects |   |                                         | (1,138,205 | ) |   | (1,723,883 | ) |
| Pro                  forma net income (loss) available to common stockholders                                                                                                                  |   | $                                            | (373,270   | ) | $ | 4,936,097 |   |
| Reported                  net income per common share:                                                                                                                                         |   |                                         |       |   |   |   |   |
| Basic                                                                                                                                                                                          |   | $                                            | 0.03       |   | $ | 0.53 |   |
| Diluted                                                                                                                                                                                        |   | $                                            | 0.03       |   | $ | 0.50 |   |
| Pro                  forma net income (loss) per common share:                                                                                                                                 |   |                                         |       |   |   |   |   |
| Basic                                                                                                                                                                                          |   | $                                            | (0.03      | ) | $ | 0.42 |   |
| Diluted                                                                                                                                                                                        |   | $                                            | (0.03      | ) | $ | 0.39 |   |

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**2.        Acquisitions**

**Pennsylvania        School of Business, Inc.**

**Technical        Career Institutes, Inc.**

| **At                  December 31, 2006**  |   |   |       |   |
|--------------------------------------------|--------|--------|------------|--------|
|                                       |   |   |       |   |
| Current                  assets            |   | $      | 16,468,000 |   |
| Property                  and equipment    |   |   | 546,000    |   |
| Intangible                  assets         |   |   | 12,440,000 |   |
| Goodwill                                   |   |   | 1,457,000  |   |
| Other                  assets              |   |   | 882,000    |   |
| Total                  assets acquired     |   |   | 31,793,000 |   |
| Current                  liabilities       |   |   | 15,663,000 |   |
| Other                  liabilities         |   |   | 63,000     |   |
| Total                  liabilities assumed |   |   | 15,726,000 |   |
| Net                  assets acquired       |   | $      | 16,067,000 |   |

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

| **December                  31,**                                                                                                                                                                            |   |   |    |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|
|                                    |   |   |         |   |
| 2007                                                                                                                                                                                                         |   | $      | 713,333 |   |
| 2008                                                                                                                                                                                                         |   |   | 519,861 |   |
| 2009                                                                                                                                                                                                         |   |   | 50,000  |   |
| 2010                                                                                                                                                                                                         |   |   | 35,418  |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | **Year                  Ended December 31,** |       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | **2005**                                     |       | **2004** |   |
|                                                                                                                                     |   |                                    |       |    |   |
| Revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | $                                            | 74,218,000 |   | $ | 67,080,000 |   |
| Net                  income (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $                                            | (128,000   | ) | $ | 6,366,000 |   |
| Diluted                  net income (loss) per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $                                            | (0.01      | ) | $ | 0.51 |   |

**3.        Property and Equipment**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | **December                  31,**                                                                                                    |       |                                                                                                                                 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | **2006**                                                                                                                             |       | **2005**                                                                                                                             |   |   |   |
|                                                                                                         |   |                        |       |                        |   |   |   |
| Furniture                  and fixtures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | $                                                                                                                                    | 939,307    |                                                                                                                                 | $      | 1,232,249 |   |   | 3                  to 5 years |   |
| Telephone                  systems, office computers and software                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                                                 | 3,556,331  |                                                                                                                                 |   | 4,114,168 |   |   | 3                  to 5 years |   |
| Library                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                 | 695,644    |                                                                                                                                 |   | 597,372 |   |   | 5                  years |   |
| Leasehold                  improvements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                 | 4,049,242  |                                                                                                                                 |   | 4,234,468 |   |   | Term                  of lease |   |
| Construction                  in progress                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                                                                                 | 1,068,610  |                                                                                                                                 |   |   |   |   |   |   |
| Equipment                  acquired under capital lease                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                 | 811,246    |                                                                                                                                 |   | 1,154,230 |   |   | 5                  years |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                 | 11,120,380 |                                                                                                                                 |   | 11,332,487 |   |   |   |   |
| Less                  accumulated depreciation and amortization:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                                                                                 |       |                                                                                                                                 |   |   |   |   |   |   |
| Equipment                  acquired under capital lease                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                 | 455,137    |                                                                                                                                 |   | 327,032 |   |   |   |   |
| Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                                                                                                                 | 4,603,688  |                                                                                                                                 |   | 4,215,772 |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                                 | 5,058,825  |                                                                                                                                 |   | 4,542,804 |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $                                                                                                                                    | 6,061,555  |                                                                                                                                 | $      | 6,789,683 |   |   |   |   |

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**4.        Goodwill**

| Balance                  at December 31, 2004             |   |   | 3,914,624 |   |
|-----------------------------------------------------------|--------|--------|-----------|--------|
| TCI                  acquisition (note 2)                 |   |   | 1,157,751 |   |
| Balance                  at December 31, 2005             |   |   | 5,072,375 |   |
| Funds                  Received from previous shareholder |   |   | (52,254   | )      |
| Adjustment                  to TCI purchase price         |   |   | 300,000   |   |
| Balance                  at December 31, 2006             |   | $      | 5,320,121 |   |

**5.        Other Assets**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | **December                  31,** |      |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|-----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | **2006**                          |      | **2005** |   |
|                                                                                                                                   |   |                              |           |   |   |  |   |
| Deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $                                 | 2,178,912 |   | $ | 2,232,454 |   |
| Deferred                  financing costs, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                              | 435,145   |   |   | 746,359 |   |
| Other                  (none in excess of 5% of other assets)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                              | 161,934   |   |   | 200,238 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $                                 | 2,775,991 |   | $ | 3,179,051 |   |

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**6.        Accounts Payable and Accrued Expenses**

|                                                                                                                                                          |   | **December                  31,**   |       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|------------|
|                                                                                                                                                          |   |  **2006**                                |       |   **2005** |   |
| Accounts                  payable                                                                                                                             |   | $                                             | 2,104,199  |   | $ | 1,888,241 |   |
| Accrued                  salaries and benefits                                                                                                                |   |                                          | 1,673,317  |   |   | 1,538,663 |   |
| Accrued                  marketing expenses                                                                                                                   |   |                                          | 470,370    |   |   |   |   |
| Accrued                  bonus payable                                                                                                                        |   |                                          | 75,000     |   |   | — |   |
| Accrued                  professional fees                                                                                                                    |   |                                          | 424,494    |   |   | 229,503 |   |
| Accrued                  disallowances                                                                                                                        |   |                                          | 3,700,000  |   |   | — |   |
| Student                  refunds payable                                                                                                                      |   |                                          | 1,121,105  |   |   | 696,546 |   |
| Other                  (none in excess of 5% of accounts payable and accrued                  expenses)          |   |                                          | 885,301    |   |   | 276,210 |   |
|                                                                                                                                                          |   | $                                             | 10,453,786 |   | $ | 4,629,163 |   |

**7.        U.S. Department of Education Program Review**

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**CAREER        COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**8.        Closed Facilities**

**9.        Obligations Under Capital Leases**

| Year                  Ending December 31,          |   |   |     |   |
|----------------------------------------------------|--------|--------|----------|--------|
|                                               |   |   |     |   |
| 2007                                               |   | $      | 353,879  |   |
| 2008                                               |   |   | 116,323  |   |
| 2009                                               |   |   | 26,138   |   |
|                                               |   |   | 496,340  |   |
|                                               |   |   |     |   |
| Less                  amount representing interest |   |   | (33,505  | )      |
| Less                  current portion              |   |   | (327,215 | )      |
|                                               |   | $      | 135,620  |   |

**10.        Income Taxes**

|                                           |   | **Year                    Ended December 31**, |    |
|------------------------------------------------|--------|------------------------------------------------|---------|
|                                           |   | 2006                                           |    | 2005 |   | 2004 |   |
| Current:                                       |   |                                           |    |   |   |   |   |   |   |   |
| Federal                                        |   | $                                              | — |   | $ | 48,000 |   | $ | — |   |
| State                    and local             |   |                                           | 30,000  |   |   | 256,000 |   |   | 720,500 |   |
| Total                    current               |   | $                                              | 30,000  |   | $ | 304,000 |   | $ | 720,500 |   |
| Deferred                    income tax benefit |   | $                                              | — |   | $ | — |   |   | (3,482,500 | ) |
| Net                    Provision or benefit    |   | $                                              | 30,000  |   | $ | 304,000 |   | $ | (2,762,000 | ) |

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

|                                             |   | **Year                  Ended December 31**, |       |
|--------------------------------------------------|--------|----------------------------------------------|------------|
|                                             |   | **2006**                                     |       | **2005** |   |
|                                             |   |                                         |       |   |   |
| Net                  operating losses            |   | $                                            | 8,055,000  |   | $ | 7,668,000 |   |
| Deferred                  rent                   |   |                                         | 414,000    |   |   | 375,000 |   |
| Allowance                  for doubtful accounts |   |                                         | 1,443,000  |   |   | 658,000 |   |
| Prepaid                  expense                 |   |                                         | (285,000   | ) |   | (231,000 | ) |
| Depreciation                                     |   |                                         | (549,000   | ) |   | (911,000 | ) |
| Tuition                  disallowance            |   |                                         | 1,480,000  |   |   | — |   |
| Closed                  facilities               |   |                                         | 884,000    |   |   | — |   |
| Other,                  net                      |   |                                         | 1,073,000  |   |   | 36,000 |   |
|                                             |   |                                         | 12,515,000 |   |   | 7,595,000 |   |
| Less                  valuation allowance        |   |                                         | (6,957,500 | ) |   | (2,037,500 | ) |
|                                             |   | $                                            | 5,557,500  |   | $ | 5,557,500 |   |

|                                                       |   | **Year                  Ended December 31**, |
|------------------------------------------------------------|--------|----------------------------------------------|
|                                                       |   | 2006                                         |   | 2005 |   | 2004 |
|                                                       |   |                                         |   |   |   |   |   |
| Federal                  statutory rate                    |   |                                         | 34 | % |   | 34 | % |   | 34 | % |
| Permanent                  difference                      |   |                                         | — |   |   | 1 |   |   | — |   |
| State                  and local income taxes of Interboro |   |                                         | 9 |   |   | 28 |   |   | 9 |   |
| Prior                  year underaccrual                   |   |                                         | — |   |   | — |   |   | 5 |   |
| Federal                  AMT taxes                         |   |                                         | — |   |   | 5 |   |   | — |   |
| Change                  in valuation allowance             |   |                                         | (43 | ) |   | (22 | ) |   | (127 | ) |
|                                                       |   |                                         | 0 | % |   | 46 | % |   | 79 | % |

**11.        Notes Payable**

| ·                      | The                  revolver increases to $5.0 million and the term loan reduces to $2.35                  million. The term loan can be increased once only up to $6.0                  million. |
|------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

| ·       | The                  maturity date of the revolver and term loan is April 1,                  2009. |
|--------------------------------------------|-----------------------------------------------------------------------------------------------------|

| ·       | The                  interest rate on the revolver and term loan is, at EVCI’s option, prime +                  2.75% or LIBOR +4%. |
|--------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| ·       | The                  term loan amortizes with six quarterly payments of $750,000 each                  starting                  September 30, 2007 and the balance due on April 1,                  2009. |
|--------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·       | Financial                  covenants are reset. |
|--------------------------------------------|------------------------------------------------------|

| ·       | Restrictions                  on the payment of dividends are                  unchanged. |
|--------------------------------------------|-------------------------------------------------------------------------------------------|

|      | The                  weighted average interest rate on the revolver and term loans outstanding                  at December 31, 2006 would have                  been 10.34%. |
|--------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2007                          |   | $      | 2,386,232  |   |
|-------------------------------|--------|--------|------------|--------|
| 2008                          |   |   | 3,289,521  |   |
| 2009                          |   |   | 6,119,013  |   |
| 2010                          |   |   | 188,850    |   |
| 2011                          |   |   | 80,313     |   |
|                          |   |   | 12,063,929 |   |
| Less                  current |   |   |       |   |
| Portion                       |   |   | 2,386,232  |   |
|                          |   | $      | 9,677,679  |   |

**12.        Commitments and Contingencies**

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

| **Year                  Ending December 31,**                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |       |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|
|                                                                                  |   |   |            |   |
| 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $      | 6,430,000  |   |
| 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 6,161,000  |   |
| 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 6,092,000  |   |
| 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 6,145,000  |   |
| 2011                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 5,484,000  |   |
| Thereafter                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 16,338,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $      | 46,650,000 |   |

***Securities        Class Actions.***

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

***Stockholder        Derivative Action.***

***Delaware        Books and Records Action.***
* *
*Shamji        v. EVCI Career Colleges Holding Corp.,*

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

*Stock        Grants*

*Cancellation        and Replacement*

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | **Exercise****Price**          |   | **Shares                  Underlying Warrants****Outstanding                  December 31,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|--------|----------------------------------------------------------------------------------------------|--------|
| **Expiration                  Date**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | **per                  Share** |   | **2006**                                                                                     |   | **2005** |   |
|                                                                                                     |   |                           |   |                                                                                         |   |   |   |
| January                  2006*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $                              | 25.00  |                                                                                         |   | — |   |   | 25,000 |   |
| May                  2006*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           | 12.00  |                                                                                         |   | — |   |   | 50,000 |   |
| June                  2006*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                           | 3.00   |                                                                                         |   | — |   |   | 93,333 |   |
| April                  2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                           | 16.09  |                                                                                         |   | 25,000 |   |   | 25,000 |   |
| September                  2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                           | 2.25   |                                                                                         |   | 45,000 |   |   | 45,000 |   |
| March                  2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                           | 14.338 |                                                                                         |   | 62,338 |   |   | 62,338 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                           |   |                                                                                         |   | 132,338 |   |   | 300,671 |   |

----

|                                          |   | **Options                  Outstanding** |       | **Options                  Exercisable**                                                                                                                           |   |
|-----------------------------------------------|--------|------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **Exercise                  Price Range**     |   | **Shares****Underlying****Options**      |       | **Weighted-****Average****Exercise                  Price**                                                                                                        |   | **Shares****Underlying****Options** |   | **Weighted-****Average****Exercise                  Price** |   |
|                                          |   |                                     |       |                             |   |   |   |                             |   |
| Balance                  at December 31, 2003 |   |                                     | 942,667    |                                                                                                                                                               | $      | 1.83 |   |   | 632,325 |   | $ | 1.96 |   |
| Granted                                       |   |                                     | 594,037    |                                                                                                                                                               |   | 7.18 |   |   | — |   |   | — |   |
| Exercised                                     |   |                                     | (40,516    | )                                                                                                                                                                  |   | 1.16 |   |   | — |   |   | — |   |
| Canceled                                      |   |                                     | (5,001     | )                                                                                                                                                                  |   | 1.20 |   |   | — |   |   | — |   |
| Balance                  at December 31, 2004 |   |                                     | 1,491,187  |                                                                                                                                                               |   | 3.96 |   |   | 1,042,420 |   | $ | 3.84 |   |
| Granted                                       |   |                                     | 630,000    |                                                                                                                                                               |   | 8.17 |   |   | — |   |   | — |   |
| Exercised                                     |   |                                     | (103,264   | )                                                                                                                                                                  |   | 6.82 |   |   | — |   |   | — |   |
| Balance                  at December 31, 2005 |   |                                     | 2,017,923  |                                                                                                                                                               |   | 5.11 |   |   | 1,199,268 |   |   | 3.65 |   |
| Granted                                       |   |                                     | 40,000     |                                                                                                                                                               |   | 1.39 |   |   | — |   |   | — |   |
| Replacement                  options          |   |                                     | 354,369    |                                                                                                                                                               |   | 1.00 |   |   | — |   |   | — |   |
| Exercised                                     |   |                                     | (26,666    | )                                                                                                                                                                  |   | 0.72 |   |   | — |   |   | — |   |
| Canceled                                      |   |                                     | (1,253,888 | )                                                                                                                                                                  |   | 7.64 |   |   | — |   |   | — |   |
| Balance                  at December 31, 2006 |   |                                     | 1,131,738  |                                                                                                                                                               | $      | 1.02 |   |   | 750,701 |   | $ | 1.03 |   |

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**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

|                                                                                                                                                         |   | **Options                  Outstanding** |      | **Options                  Exercisable**                                                                                                                                 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **Exercise                  Price****Range**                                                                                                                 |   | **Shares****Underlying Options**    |      | **Weighted-****Average****Remaining Price**                                                                                                                         |   | **Weighted-Average****Exercise Price** |   | **Shares****Underlying Options** |   | **Weighted-****Average****Exercise Price** |   |
|                            |   |                                     |      |                              |   |                            |   |   |   |   |   |
| $1.00                                                                                                                                                        |   |                                     | 1,053,869 |                                                                                                                                                                     |   | 2.57                  years |   | $ | 1.00 |   |   | 699,500 |   | $ | 1.00 |   |
| 1.20                                                                                                                                                         |   |                                     | 26,203    |                                                                                                                                                                     |   | 1.67                  years |   |   | 1.20 |   |   | 26,203 |   |   | 1.20 |   |
| 1.39                                                                                                                                                         |   |                                     | 40,000    |                                                                                                                                                                     |   | 9.42                  years |   |   | 1.39 |   |   | 13,332 |   |   | 1.39 |   |
| 1.57                                                                                                                                                         |   |                                     | 11,666    |                                                                                                                                                                     |   | 5.58                  years |   |   | 1.57 |   |   | 11,666 |   |   | 1.57 |   |
| $1.00                  - $1.57                                                                                                                               |   |                                     | 1,131,738 |                                                                                                                                                                     |   | 2.82                  years |   | $ | 1.024 |   |   | 750,701 |   | $ | 1.023 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **Year                  Ended December 31,**                                                                             |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **2006**                                                                                                                 |    | **2005** |   | **2004** |   |
|                                                                                                               |   |                      |    |                      |   |                      |   |
| Fair                  value of each option granted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $                                                                                                                        | 1.04    |   | $ | 8.166 |   | $ | 7.28 |   |
| Total                  shares underlying options granted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                     | 394,369 |   |   | 630,000 |   |   | 594,037 |   |
| Total                  fair value of all options granted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $                                                                                                                        | 410,000 |   | $ | 5,110,000 |   | $ | 4,325,000 |   |

|                                             |   |            |     | **Weighted-Average**                  |   |
|--------------------------------------------------|--------|------------|----------|--------------------------------------------|--------|
|                                             |   | **Shares** |     | **Grant                  Date Fair Value** |   |
| Nonvested                  at January 1, 2006    |   |       | 818,655  |                                       |   | 7.24 |   |
| Granted                                          |   |       | 26,668   |                                       |   | 1.39 |   |
| Vested                                           |   |       | (59,334  | )                                          |   | 1.00 |   |
| Cancelled                                        |   |       | (759,321 | )                                          |   | 7.73 |   |
| Replaced                                         |   |       | 354,369  |                                       |   | 1.00 |   |
| Non-vested                  at December 31, 2006 |   |       | 381,037  |                                       |   | 1.03 |   |

----

**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**15.        Earnings per Share:**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **Year                  Ended December 31,**                                                                                   |       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **2006**                                                                                                                       |       | **2005** |   | **2004** |   |
|                                                                                                               |   |                       |       |                       |   |                       |   |
| Basic                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                                           | 12,484,602 |   |   | 12,417,422 |   |   | 11,883,695 |   |
| Effect                  of assumed exercise of employee stock options, net of tax effects                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                                                                                                           | —    |   |   | 412,586 |   |   | 425,370 |   |
| Effect                  of assumed exercise of warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                                                           | —    |   |   | 73,933 |   |   | 209,385 |   |
| Diluted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                                                           | 12,484,602 |   |   | 12,903,941 |   |   | 12,518,450 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **Year                  Ended December 31,** |      |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|-----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **2006**                                     |      | **2005** |   | **2004** |   |
|                                                                                                               |   |                                         |      |   |   |   |   |
| Number                  of options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                         | 1,131,738 |   |   | 943,572 |   |   | 534,896 |   |
| Number                  of warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                         | 132,338   |   |   | 162,338 |   |   | 162,338 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                         | 1,267,076 |   |   | 1,105,910 |   |   | 697,234 |   |

**16.        Selected Quarterly Financial Data (Unaudited)**

|                                           |   | **Quarter**                                                |   |
|------------------------------------------------|--------|------------------------------------------------------------|--------|
|                                           |   | **First**                                                  |   | **Second** |   | **Third** |   | **Fourth** |   |
|                                           |   | ($                  in thousands except per share amounts) |   |
| **2006**                                       |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Total                  revenue                 |   | $                                                          | 18,899 |   | $ | 14,789 |   | $ | 12,286 |   | $ | 19,472 |   |
| Loss                  from operations          |   |                                                       | (371   | ) |   | (3,471 | ) |   | (7,358 | ) |   | (447 | ) |
| Net                  loss                      |   |                                                       | (766   | ) |   | (3,912 | ) |   | (7,914 | ) |   | (950 | ) |
| Net                  loss per share            |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                          |   |                                                       | (.06   | ) |   | (0.31 | ) |   | (0.64 | ) |   | (0.07 | ) |
| Diluted                                        |   |                                                       | (.06   | ) |   | (0.31 | ) |   | (0.64 | ) |   | (0.07 | ) |
| **2005**                                       |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Total                  revenue                 |   | $                                                          | 10,195 |   | $ | 9,655 |   | $ | 10,100 |   | $ | 20,792 |   |
| Income                  (loss) from operations |   |                                                       | 895    |   |   | 468 |   |   | (1,578 | ) |   | 1,251 |   |
| Net                  income (loss)             |   |                                                       | 667    |   |   | 320 |   |   | (1,493 | ) |   | 867 |   |
| Net                  income (loss) per share   |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                          |   |                                                       | 0.05   |   |   | 0.03 |   |   | (0.12 | ) |   | 0.07 |   |
| Diluted                                        |   |                                                       | 0.05   |   |   | 0.03 |   |   | (0.12 | ) |   | 0.07 |   |

**17.        Regulatory Review**

----

**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

|                         |   | **Initial** |   | **After                  3 Weeks** |   |
|------------------------------|--------|-------------|--------|------------------------------------|--------|
|                         |   |        |   |                               |   |
| Spring                  2006 |   |        | 900    |                               |   | 850 |   |
| Summer                  2006 |   |        | 900    |                               |   | 850 |   |
| Fall                  2006   |   |        | 1,080  |                               |   | 1,000 |   |
| Spring                  2007 |   |        | 1,080  |                               |   | 1,000 |   |

**18.        Subsequent Events**

*ComVest        Financing*

----

**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

| ·     | Interest                  accrues at 12% per annum. The first 12 months of interest will                  be prepaid                  at closing. After 12 months, the interest will accrue at 12% per                  annum                  compounded quarterly. |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·     | Convertible                  at ComVest’s option, if not repaid within 12 months after issuance, into                  shares of EVCI’s common stock at $0.60 per                  share. |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·     | Secured                  by substantially all assets of                  EVCI. |
|--------------------------------|--------------------------------------------------------------------------------|

| ·     | Exercisable                  for three years at $0.54 per share. |
|--------------------------------|------------------------------------------------------------------|

| ·     | Permit                  a cashless exercise and have full ratchet and other anti-dilution                  provisions for issuances of other equity securities below their                  exercise                  price. |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·     | Not                  exercisable unless an increase in                  EVCI’s authorized common stock is approved by                  stockholders. |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·     | Participating                  Management will invest $1,000,000 of the gross proceeds of $10,100,000                  as                  follows: Dr. Buntzman, $500,000; Dr. McGrath $250,000; Mr. Alperin,                  $125,000 and Mr. Schwartz,                  $125,000. |
|--------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**EVCI        CAREER COLLEGES HOLDING CORP. AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

| ·     | Dr.                  Buntzman, Dr. McGrath will amend their existing employment agreements                  to                  extend the employment terms, decrease their salaries and cancel                  their                  change of control agreements. Mr. Schwartz will enter into an employment                  agreement. |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·     | Participating                  Management have been granted options that, if exercised, would                  increase                  their total ownership of EVCI common stock to 15% of EVCI outstanding                  common stock after giving effect to the purchase of the ComVest                  shares,                  the exercise of the ComVest Note and Warrants the exercise of currently                  outstanding options and warrants. |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**19.        Valuation and Qualifying Accounts**

| **Description**                                           |   | **Balance                  at****Beginning****of                  Period** |      | **Charged                  to****Costs                  and****Expenses** |   | **Acquired*** |   | **Deductions** |      | **Balance****at                  End****of                  Period** |   |
|-----------------------------------------------------------|--------|----------------------------------------------------------------------------|-----------|---------------------------------------------------------------------------|--------|---------------|--------|----------------|-----------|----------------------------------------------------------------------|--------|
|                                                      |   |                                                                  |      |                                                                 |   |     |   |      |      |                                                            |   |
| Allowance                  for doubtful accounts:         |   |                                                                       |      |                                                                      |   |          |   |           |      |                                                                 |   |   |   |   |   |   |
| December                  31, 2006                        |   | $                                                                          | 2,449,488 |                                                                      | $      | 1,882,775     |   | $              | —   |                                                                 | $      | 3,041,531 |   | $ | 3,608,244 |   |
| December                  31, 2005                        |   | $                                                                          | 105,000   |                                                                      | $      | 1,256,802     |   |           | 1,325,447 |                                                                 |   | 237,761 |   | $ | 2,449,488 |   |
| December                  31, 2004                        |   | $                                                                          | 50,000    |                                                                      |   | 55,000        |   |           | —   |                                                                 |   | — |   | $ | 105,000 |   |
|                                                      |   |                                                                       |      |                                                                      |   |          |   |           |      |                                                                 |   |   |   |   |   |   |
| Deferred                  income tax valuation allowance: |   |                                                                       |      |                                                                      |   |          |   |           |      |                                                                 |   |   |   |   |   |   |
| December                  31, 2006                        |   | $                                                                          | 2,037,500 |                                                                      |   | 4,920,000     |   |           |      |                                                                 |   | — |   | $ | 6,957,500 |   |
| December                  31, 2005                        |   | $                                                                          | 1,827,500 |                                                                      | $      | 210,000       |   |           | —   |                                                                 |   | — |   | $ | 2,037,500 |   |
| December                  31, 2004                        |   | $                                                                          | 6,259,000 |                                                                      | $      | (4,431,500    | )      |           | —   |                                                                 |   | — |   | $ | 1,827,500 |   |

----

----

**SIGNATURES**

|                           |                                               |                                 |
|--------------------------------|----------------------------------------------------|--------------------------------------|
|                           | EVCI CAREER COLLEGES HOLDING CORP.                 |
|                      |                                          |                            |
| Date: May              1, 2007 | By:                                      | /s/              Dr. John J. McGrath |
|                           | Dr.              John J. McGrath                   |
|                           | Chief Executive Officer and              President |

|   |                                                                                  |                                |
|--------|---------------------------------------------------------------------------------------|-------------------------------------|
|        | By:                                                                         | /s/              Richard Goldenberg |
|   | Richard              Goldenberg                                                       |
|   | Chief Financial OfficerPrincipal                Financial and Accounting Officer |
|   |                                                                                  |

| Signature                                                         |   | Date                           |
|-------------------------------------------------------------------|--------|--------------------------------|
|                                                              |   |                           |
| /s/                Dr. Arol I. Buntzman                           |   | May                1, 2007     |
| Dr.                Arol I. Buntzman                               |   |                           |
| Chairman                of the Board                              |   |                           |
|                                                              |   |                           |
| /s/                Dr. John J. McGrath                            |   | May                  1, 2007   |
| Dr.                John J. McGrath                                |   |                           |
| Chief                Executive Officer and President and Director |   |                           |
|                                                              |   |                           |
| /s/                    Royce N. Flippin, Jr.                      |   | May                    1, 2007 |
| Royce                N. Flippin, Jr.                              |   |                           |
| Director                                                          |   |                           |
|                                                              |   |                           |
| /s/                Philip M. Getter                               |   | May                  1, 2007   |
| Philip                M. Getter                                   |   |                           |
| Director                                                          |   |                           |
|                                                              |   |                           |
| /s/                  Richard Goldenberg                           |   | May                  1, 2007   |
| Richard                Goldenberg                                 |   |                           |
| Chief                Financial Officer and Director               |   |                           |
|                                                              |   |                           |
|                                                              |   | May                    1, 2007 |
| Donald                Grunewald                                   |   |                           |
| Director                                                          |   |                           |
|                                                              |   |                           |
|                                                              |   | May                  1, 2007   |
| Robert                F. Kennedy, Jr.                             |   |                           |
| Director                                                          |   |                           |

----

**EXHIBIT      INDEX**

| Exhibit                  No.*    |    | Description                  of Exhibit                                                                                                                                                    |
|----------------------------------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |    |                                                                                                                                                                                       |
| 3.1[1]                      | — | Certificate                  of Incorporation of the Registrant.                                                                                                                           |
|                             |    |                                                                                                                                                                                       |
| 3.2[1]                      | — | Certificate                  of Merger of Educational Video Conferencing, Inc. (a New York Corporation)                  into the Registrant (a Delaware Corporation).                     |
|                             |    |                                                                                                                                                                                       |
| 3.3[1]                      | — | Certificate                  of Correction of the Certificate of Incorporation of the                  Registrant.                                                                         |
|                             |    |                                                                                                                                                                                       |
| 3.4[3]                      | — | Certificate                  of Amendment, dated February 22, 1999, to Certificate of Incorporation                  of                  the Registrant.                                   |
|                             |    |                                                                                                                                                                                       |
| 3.5[23]                     | — | Amended                  and Restated By-Laws of the Registrant.                                                                                                                           |
|                             |    |                                                                                                                                                                                       |
| 3.6[5]                      | — | Certificate                  Eliminating Reference to Series A 7.5% Convertible Preferred Stock                  from                  the Certificate of Incorporation of the Registrant. |
|                             |    |                                                                                                                                                                                       |
| 3.7[16]                     | — | Certificate                  of Amendment, dated May 23, 2002, to Certificate of Incorporation                  of the                  Registrant.                                        |
|                             |    |                                                                                                                                                                                       |
| 3.8[5]                      | — | Certificate                  Eliminating Reference to Series B 7% Convertible Preferred Stock                  from the                  Certificate of Incorporation of the Registrant.   |
|                             |    |                                                                                                                                                                                       |
| 3.9[5]                      | — | Certificate                  Eliminating Reference to Series C 8% Convertible Preferred Stock                  from the                  Certificate of Incorporation of the Registrant.   |
|                             |    |                                                                                                                                                                                       |
| 3.10[20]                    | — | Certificate                  of Amendment, filed August 9, 2004, to Certificate of Incorporation                  of the                  Registrant.                                      |
|                             |    |                                                                                                                                                                                       |
| 4.2[2]                      | — | Form                  of Common Stock certificate.                                                                                                                                         |
|                             |    |                                                                                                                                                                                       |
| 4.3[4]                      | — | Warrant                  Agreement, dated January 14, 2000, between the Registrant and Bruce.                  R.                  Kalisch.                                                |
|                             |    |                                                                                                                                                                                       |
| 4.4[6]                      | — | Warrant                  Agreement, dated April 18, 2000, between the Registrant and Peter                  J.                  Solomon Company Limited.                                   |
|                             |    |                                                                                                                                                                                       |
| 4.5[7]                      | — | Form                  of Warrant issued to each seller of shares of ICTS,                  Inc.                                                                                            |
|                             |    |                                                                                                                                                                                       |
| 4.6[14]                     | — | Common                  Stock Purchase Warrant issued in September 2003, to purchase 45,000                  shares                  of the Registrant’s common stock.               |
|                             |    |                                                                                                                                                                                       |
| 4.7[17]                     | — | Common                  Stock Purchase Warrant issued to placement agent on March 29,                  2004.                                                                               |

----

| 10.1[28]                        | — | Amended                  and Restated Employment Agreement between the Registrant and Dr.                  Arol I.                  Buntzman, dated August 12, 2005.                                                                                                                                                                                                           |
|--------------------------------------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                 |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.2[28]                        | — | Amended                  and Restated Employment Agreement between the Registrant and Dr.                  John J.                  McGrath, dated August 12, 2005.                                                                                                                                                                                                            |
|                                 |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.3                  (a)[9]    | — | Employment                  Agreement between the Registrant and Richard Goldenberg, dated                  January 1,                  2003.                                                                                                                                                                                                                                  |
|                                 |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.3                  (b)[23]   | — | Letter                  agreement, dated June 30, 2005, amending Employment Agreement between                  the                  Registrant and Richard Goldenberg dated January 1,                  2003.                                                                                                                                                                  |
|                                 |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.4[10]                        | — | Amended                  and Restated 1998 Incentive Stock Option Plan of the                  Registrant.                                                                                                                                                                                                                                                                     |
|                                 |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.5[11]                        | — | 2001                  Non-Qualified Stock Option Plan.                                                                                                                                                                                                                                                                                                                         |
|                                 |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.6[9]                         | — | Form                  of Change in Control Agreement used for agreements the Registrant                  has with                  each of Dr. Arol I. Buntzman, Dr. John J. McGrath, and Richard                  Goldenberg,                  dated February 11, 2003.                                                                                                       |
|                                 |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.7[1]                         | — | Form                  of Indemnification Agreement. [Used for each director and executive                  officer of the Registrant.]                                                                                                                                                                                                                                         |
|                                 |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.8[4]                         | — | Stock                  Purchase Agreement, dated January 14, 2000, among Bruce R. Kalisch,                  Interboro Holding, Inc. and Interboro Institute, Inc.                                                                                                                                                                                                              |
|                                 |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.9[12]                        | — | Lease                  Agreement between 444 Realty Company and Interboro Institute, Inc.                  dated                  July 27, 1983, as amended by agreements dated September 20, 1988,                  September 1, 1992, and February 1, 1993.                                                                                                                  |
|                                 |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.10[12]                       | — | Lease                  Agreement between Interboro Institute, Inc. and JUYI, Inc., dated                  January                  26, 2001.                                                                                                                                                                                                                                   |
|                                 |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.11[8]                        | — | Promissory                  Note for $1,000,000, dated August 4, 2003, payable by Interboro                  Institute,                  Inc. to North Fork Bank.                                                                                                                                                                                                              |
|                                 |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.12[8]                        | — | Form                  of the Registrant’s Subscription and Registration Rights Agreement                  relating to the Registrant’s August 1, 2003 issuance of common stock and                  warrants.                                                                                                                                                      |
|                                 |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.13[13]                       | — | Settlement                  Agreement, made October 3, 2003, between Amaranth Trading L.L.C.                  and the                  Registrant.                                                                                                                                                                                                                             |
|                                 |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.14[13]                       | — | Form                  of Share Claim Purchase and Registration Rights Agreement between                  the                  Registrant and each investor acquiring a portion of the Amaranth                  Trading                  L.L.C.’s rights to claims to shares of EVCI’s common stock upon conversion                  of Series B Preferred shares. |
|                                 |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.15[14]                       | — | Third                  Amendment and Lease Extension Agreement, made as of August 1, 2003,                  between 444 Realty Company, L.L.C. and Interboro Institute,                  Inc.                                                                                                                                                                                  |

----

| 10.16[15]                          | — | Ownership                  and Registration Rights Agreement, dated November 11, 2003, between                  the                  Registrant and JLF Partners I, L.P., JLF Partners II, L.P. and                  JLF                  Offshore Fund.                                       |
|-----------------------------------------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                    |    |                                                                                                                                                                                                                                                                                           |
| 10.17(a)[16]                            | — | Employment                  Agreement between the Registrant and Joseph D. Alperin dated January                  1,                  2004.                                                                                                                                                    |
|                                    |    |                                                                                                                                                                                                                                                                                           |
| 10.17                  (b)[23]          | — | Letter                  agreement, dated June 30, 2005, amending Employment Agreement between                  the                  Registrant and Joseph D. Alperin dated January 1, 2004.                                                                                                    |
|                                    |    |                                                                                                                                                                                                                                                                                           |
| 10.18[16]                          | — | Option                  Agreement between the Registrant and Joseph D. Alperin dated January                  1,                  2004.                                                                                                                                                        |
|                                    |    |                                                                                                                                                                                                                                                                                           |
| 10.19[16]                          | — | Change                  of control letter agreement between the Registrant and Joseph D.                  Alperin                  dated January 1, 2004.                                                                                                                                      |
|                                    |    |                                                                                                                                                                                                                                                                                           |
| 10.20[16]                          | — | Agreement,                  made February 28, 2004, between Interboro Institute, Inc. and OPEIU                  Local                  153, AFL-CIO.                                                                                                                                          |
|                                    |    |                                                                                                                                                                                                                                                                                           |
| 10.21[17]                          | — | Securities                  Purchase Agreement, dated March 29, 2004, by and among the Registrant                  and                  each buyer named in the Schedule of Buyers.                                                                                                            |
|                                    |    |                                                                                                                                                                                                                                                                                           |
| 10.22[17]                          | — | Registration                  Rights Agreement, dated March 29, 2004, by and among the Registrant                  and                  each buyer named in the Schedule of Buyers.                                                                                                            |
|                                    |    |                                                                                                                                                                                                                                                                                           |
| 10.23[18]                     | — | Ownership                  and Registration Rights Agreement, dated April 2, 2004, by and                  among the                  Registrant and six funds managed by Wellington Management Company,                  LLP.                                                                 |
|                                    |    |                                                                                                                                                                                                                                                                                           |
| 10.24[19]                          | — | 2004                  Amended and Restated Incentive Stock Plan                                                                                                                                                                                                                                |
|                                    |    |                                                                                                                                                                                                                                                                                           |
| 10.25[20]                          | — | Form                  of Stock Option Agreement (Nonqualified Stock Option)                                                                                                                                                                                                                    |
|                                    |    |                                                                                                                                                                                                                                                                                           |
| 10.26[20]                          | — | Form                  of Stock Option Agreement (Nonqualified Stock Option) covering                  option                  grants to executive officers that were approved at the Registrant’s July                  27, 2004 stockholders meeting.                                   |
|                                    |    |                                                                                                                                                                                                                                                                                           |
| 10.27[21]                          | — | Lease                  made November 17, 2003 between Spruce Spires Associates, LP, and                  Interboro                  Institute, Inc.                                                                                                                                            |
|                                    |    |                                                                                                                                                                                                                                                                                           |
| 10.28                  (a)[22]          | — | Sublease                  for Premises at 37-02 Main Street, Flushing, NY 11354, dated March                  28,                  2005, between Genking, LLC and Interboro Institute, Inc. withExhibit                  A and letter agreement, dated April 15, 2005, amending such sublease. |
|                                    |    |                                                                                                                                                                                                                                                                                           |
| 10.28                  (b)[22]          | — | Consent                  to Sublease, dated April 22, 2005, among Mehran Enterprises Ltd.,                  Futurama                  Home Furniture of Queens, Inc., Genking, LLC and Interboro Institute,                  Inc.                                                              |
|                                    |    |                                                                                                                                                                                                                                                                                           |
| 10.28                  (c)[22]          | — | Sublease,                  dated March 30, 2004, between Futurama Home Furniture of Queens,                  Inc. and                  Genking, LLC.                                                                                                                                           |

----

| 10.28                  (d)[22]           | — | Agreement                  of Lease, dated March 6, 2001, between Mehran Enterprise Ltd. and                  Futurama                  Home Furniture of Queens, Inc.                                                                                                                                                                                                                                                                                                                    |
|------------------------------------------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                     |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.29                  [24]         | — | Stock                  Purchase Agreement, dated June 30, 2005, among EVCI Career Colleges                  Holding Corp., Technical Career Institutes, Inc., East Coast Training                  Services of Delaware, Inc., East Coast Capital Corp. and North                  American                  Training Services, Inc., with Exhibits (Schedules will be provided                  supplementally to the Securities and Exchange Commission upon                  request). |
|                                     |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.30(a)[25]                             | — | Loft                  Lease dated as of September 1, 2004 between Getty Square Partners                  LLC and                  Interboro Institute, Inc.                                                                                                                                                                                                                                                                                                                               |
|                                     |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.30(b)[25]                             | — | Letter                  agreement dated August 18, 2004 between Getty Square Partners LLC                  and                  Interboro Institute, Inc.                                                                                                                                                                                                                                                                                                                                 |
|                                     |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.30(c)[25]                             | — | First                  Amendment to Lease dated as of July 14, 2005 between Getty Square                  Partners                  LLC and Interboro Institute, Inc.                                                                                                                                                                                                                                                                                                                     |
|                                     |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.31[28]                      | — | 2004                  Amended and Restated Incentive Stock Plan Restricted Stock Award                   Agreement,                  dated August 12, 2005, between the Registrant and Dr. Arol I.                  Buntzman.                                                                                                                                                                                                                                                        |
|                                     |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.32[28]                      | — | 2004                  Amended and Restated Incentive Stock Plan Restricted Stock Award                  Agreement, dated August 12, 2005, between the Registrant and Dr.                  John J.                  McGrath.                                                                                                                                                                                                                                                               |
|                                     |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.33                  (a)[26]      | — | Credit                  Agreement, dated as of September 16, 2005, among the Registrant,                  the                  Guarantors from time-to-time parties thereto, the lenders from                  time-to-time parties thereto and Harris N.A.                                                                                                                                                                                                                               |
|                                     |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.33                  (b) [28]     | — | First                  Amendment to Credit Agreement , dated as of November 10, 2005,                  between the                  Registrant and Harris, N.A.                                                                                                                                                                                                                                                                                                                           |
|                                     |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.34                  [26]    | — | Security                  Agreement, dated as of September 16, 2005, among EVCI and other                  Debtors                  and Harris N.A.                                                                                                                                                                                                                                                                                                                                       |
|                                     |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.35                  [26]    | — | Trademark                  Collateral Agreement, dated September 16, 2005, between Technical                  Career                  Institutes, Inc. and Harris N.A.                                                                                                                                                                                                                                                                                                                    |
|                                     |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.36                  [27]    | — | Employment                  Agreement, dated as of September 29, 2005, between EVCI and Joseph                  J.                  Looney.                                                                                                                                                                                                                                                                                                                                               |
|                                     |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.37                  [27]    | — | Change                  of control letter agreement, dated September 29, 2005, between                  EVCI and                  Joseph J. Looney.                                                                                                                                                                                                                                                                                                                                       |
|                                     |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.38                  [28]    | — | Lease                  Agreement between Brill & Sharma Equities and Pennsylvania School of                  Business for a term commencing June 1,                  2005.                                                                                                                                                                                                                                                                                                            |

----

| 10.39                  (a)[28]               | — | Net                  Lease, dated as of December 19, 1997, between Overtime Properties                  LLC and                  Technical Career Institutes, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------------------------------------------------------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.39                  (b)[28]     | — | First                  Amendment of Lease dated as of October 1, 2002 between Overtime                  Properties, LLC and Technical Career Institutes, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.40                  (a)[28]                    | — | Lease,                  dated October 11, 1994, between F.H.E.A. Associates and Technical                  Career                  Institutes, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.40                  (b)[28]                    | — | First                  Amendment of Lease, dated January 20, 1995, between F.H.E.A. Associates                  and Technical Career Institutes, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.40                  (c)[28]               | — | Second                  Modification and Extension of Lease Agreement, dated April 15,                  2005,                  between Eighth Avenue Limited Liability Company and Technical Career                  Institutes, Inc.                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.41                  (a)[28]               | — | Collective                  Bargaining Agreement between Technical Career Institutes, Inc.                  and T.O.P.                  Local 2110 UAW, AFL-CIO, effective October 10, 1992- October 9,                  1995, and                  covering office clerical employees.                                                                                                                                                                                                                                                                                                                                                        |
|                                                   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.41                  (b)[28]                    | — | Memorandum                  of Agreement, dated October 10, 1995, between T.O.P. Local 2110                  UAW-AFL-CIO and Technical Career Institutes, Inc., amending collective                  bargaining agreement between the parties covering office and clerical                  employees, which was effective October 10, 1992- October 9,                  1995.                                                                                                                                                                                                                                                                 |
|                                                   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.41                  (c)[28]               | — | Memorandum                  of Agreement, dated October ____, 1998, between T.O.P. Local 2110                  UAW-AFL-CIO and Technical Career Institutes, Inc., amending collective                  bargaining agreement between the parties covering office clerical                  employees, which was effective from October 10, 1995 through October                  9,                  1998.                                                                                                                                                                                                                                      |
|                                                   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.41                  (d)[28]               | — | Collective                  Bargaining Agreement between Technical Career Institutes, Inc.                  and T.O.P.                  Local 2110 UAW-AFL-CIO effective October 10, 1998-October 9, 2001,                  covering instructors, laboratory technicians and maintenance persons                  (This                  agreement amends and restates the prior collective bargaining agreements                  with the instructors, laboratory technicians and maintenance                  employees.)                                                                                                                   |
|                                                   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.41                  (e)[28]               | — | Memorandum                  of Agreement, dated October 10, 2001, between T.O.P. Local 2110                  UAW-AFL-CIO and Technical Career Institutes, Inc., amending (A)                  collective                  bargaining agreement between the parties covering instructors,                  laboratory                  technicians and maintenance employees and (B) collective bargaining                  agreement between the parties covering office clerical employees,                  each                  such prior agreement effective October 10, 1998 through October                  9,                  2001. |
|                                                   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.41                  (f)[28]               | — | Memorandum                  of Agreement, dated October 10, 2004, between T.O.P. Local 2110                  UAW-AFL-CIO and Technical Career Institutes, Inc., amending (A)                  collective                  bargaining agreement between the parties covering instructors,                  laboratory                  technicians and maintenance employees and (B) collective bargaining                  agreement between the parties covering office clerical employees,                  each                  such agreement effective October 10, 2001 through October 9,                  2004.                        |

----

| 10.42                  [29]   | — | Letter                  agreement, dated March 1, 2006, between the Registrant and Dr.                  John J.                  McGrath.                                                                                                                                                                                                                                                                                                                                                      |
|-----------------------------------------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.43                  [29]   | — | Form                  of Restricted Stock Award Agreement for the restricted stock awards                  to Dr.                  John J. McGrath, Dr. Arol I. Buntzman and Joseph J. Looney, without                  Annexes A and B.                                                                                                                                                                                                                                                       |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.44                  [29]   | — | Employment                  Agreement, dated March 1, 2006, between the Registrant and Joseph                  D.                  Alperin.                                                                                                                                                                                                                                                                                                                                                    |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.45                  [29]   | — | Restricted                  Stock Award Agreement, dated March 1, 2006, between the Registrant                  and                  Joseph D. Alperin, without Annex A.                                                                                                                                                                                                                                                                                                                       |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.46[34]                     | — | Amended                  and Restated Credit Agreement dated as of September 16, 2005, amended                  and                  restated as of March 31, 2006, among EVCI Career Colleges Holding                  Corp.,                  the Guarantors from time to time parties hereto, and Harris N.A.                  as                  lender. “Schedules will be provided supplementally to the Securities and                  Exchange Commission upon request.” |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.47[35]                          | — | First                  Amendment, made April 30, 2006, to Amended and Restated Credit                  Agreement                  dated as of September 16, 2005 and amended and restated as of March                  31,                  2006.                                                                                                                                                                                                                                              |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.48[36]                          | — | Second                  Amendment, made June 26, 2006, to Amended and Restated Credit Agreement                  dated as of September 16, 2005 and amended and restated as of March                  31,                  2006.                                                                                                                                                                                                                                                               |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.49[36]                          | — | Waiver                  Agreement, made August 9, 2006, relating to Amended and Restated                  Credit                  Agreement dated September 16, 2005 and amended and restated as                  of March                  31, 2006.                                                                                                                                                                                                                                          |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.50[37]                          | — | Letter                  Agreement, dated October 24, 2006, between the Registrant and Dr.                  Arol I.                  Buntzman.                                                                                                                                                                                                                                                                                                                                                  |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.51**                            | — | Memorandum                  of Agreement dated January 30, 2007 between Office & Professional                  Employees International Union, Local 153, AFL-CIO, and Interboro                  Institute.                                                                                                                                                                                                                                                                                |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.52                  (a)**       | — | Securities                  Purchase Agreement, dated as of April 24, 2007, (the “SPA”) between the                  Registrant and ComVest Investment Partners III, L.P. (“ComVest”).                  Schedules will be provided supplementally to the Securities and                  Exchange                  Commission upon request.                                                                                                                            |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.52                  (b)**       | — | Exhibit                  A to Securities Purchase Agreement: Form of ComVest Secured Convertible                  Promissory .                                                                                                                                                                                                                                                                                                                                                                 |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.52                  (c)**       | — | Exhibit                  C to Securities Purchase Agreement: Intercreditor                  Agreement.                                                                                                                                                                                                                                                                                                                                                                                         |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.52                  (d)**       | — | Exhibit                  D to Securities Purchase Agreement: Form of ComVest Registration                  Rights                  Agreement.                                                                                                                                                                                                                                                                                                                                                  |

----

| 10.52                  (e)**  | — | Exhibit                  E to Securities Purchase Agreement: Form of Security                  Agreement.                                                                                                                                                                                                                                                                      |
|------------------------------------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.52                  (f)**  | — | Exhibit                  F to Securities Purchase Agreement: Form of ComVest                  Warrant.                                                                                                                                                                                                                                                                         |
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.53**                       | — | Letter                  Agreement regarding employment, dated April 24, 2007, between the                  Registrant and Dr. Arol I. Buntzman.                                                                                                                                                                                                                                |
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.54**                       | — | Letter                  Agreement regarding employment, dated April 24, 2007, between the                  Registrant and Dr. John J. McGrath.                                                                                                                                                                                                                                 |
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.55**                       | — | Letter                  Agreement regarding employment, dated April 24, 2007, between the                  Registrant and Joseph D. Alperin, Esq.                                                                                                                                                                                                                              |
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.56**                       | — | Employment                  Agreement, dated April 24, 2007, between the Registrant and Stephen                  Schwartz.                                                                                                                                                                                                                                                     |
|                               |    | .                                                                                                                                                                                                                                                                                                                                                                              |
| 10.57                  (a)**  | — | Purchase                  Agreement, dated April 24, 2007, between the Registrant and Dr.                  Arol I.                  Buntzman..                                                                                                                                                                                                                                 |
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.57                  (b)**  | — | Purchase                  Agreement, dated April 24, 2007, between the Registrant and Dr.                  John J.                  McGrath.                                                                                                                                                                                                                                   |
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.57                  (c)**  | — | Purchase                  Agreement, dated April 24, 2007, between the Registrant and Joseph                  D.                  Alperin.                                                                                                                                                                                                                                     |
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.57                  (d)**  | — | Purchase                  Agreement, dated April 24, 2007, between the Registrant and Stephen                  Schwartz.                                                                                                                                                                                                                                                       |
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.58**                       | — | Form                  of Secured Convertible Promissory Note to be issued by Registrant                  to each                  of Arol I. Buntzman, John J. McGrath, Joseph D. Alperin and Stephen                  Schwartz.                                                                                                                                               |
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.59**                       | — | Form                  of Warrant to be issued by Registrant.                                                                                                                                                                                                                                                                                                                   |
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.60**                       | — | Registration                  Rights Agreement, dated April 24, 2007, among the Registrant and                  Arol I.                  Buntzman, John J. McGrath, Joseph D. Alperin and Stephen                  Schwartz.                                                                                                                                                   |
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.61**                       | — | Letter                  Agreement, dated April 24, 2007, among ComVest, Dr. Arol I. Buntzman,                  Dr.                  John J. McGrath, Joseph D. Alperin, Esq. and Stephen                  Schwartz.                                                                                                                                                            |
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.62**                       | — | Second                  Amended and Restated Credit Agreement, dated April 24, 2007, among                  the                  Registrant, the Guarantors from time to time parties thereto, and                  Harris                  N.A. as lender. Schedules will be provided supplementally to the                  Securities and Exchange Commission upon request. |
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 10.63**                       | — | Pledge                  Agreement, dated April 24, 2007, between the Registrant and Harris                  N.A.                                                                                                                                                                                                                                                               |
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 21**                     | — | Subsidiaries                  of the Registrant                                                                                                                                                                                                                                                                                                                                |
|                               |    |                                                                                                                                                                                                                                                                                                                                                                           |
| 23.1***                  | — | Consent                  of Goldstein Golub Kessler LLP.                                                                                                                                                                                                                                                                                                                       |

----

| 31.1***                            | — | Certification                  of Chief Executive Officer required by Rule 13a-14(a) under the                  Exchange                  Act.                                                                                                                                                                                                                                                               |
|----------------------------------------------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                         |    |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.2***                            | — | Certification                  of Chief Financial Officer required by Rule 13a-14(a) under the                  Exchange                  Act.                                                                                                                                                                                                                                                               |
|                                         |    |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.1***                       | — | Certification                  of Chief Executive Officer pursuant to 18 U.S.C. Section 1350,                  as adopted                  pursuant to Section 906 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                            |
|                                         |    |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.2***                       | — | Certification                  of Chief Financial Officer pursuant to 18 U.S.C. Section 1350,                  as adopted                  pursuant to Section 906 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                            |
|                                         |    |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 99.1[21]                      | — | Text                  of final report, dated March 7, 2005, detailing the calculation                  of the TAP                  disallowances resulting from the TAP audit of the 2000-01 through                  2002-03                  academic years of Interboro Institute, Inc.                                                                                                                   |
|                                         |    |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 99.2                  [24]    | — | Press                  Release dated June 30, 2005 related to the announcement of Exhibit                  10.29(a) of this report.                                                                                                                                                                                                                                                                          |
|                                         |    |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 99.3                  [27]    | — | Press                  release dated October 3, 2005 and captioned “EVCI Career Colleges Hires                  Joseph J. Looney to serve as Chief Financial Officer.”                                                                                                                                                                                                                           |
|                                         |    |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 99.4                  [28]    | — | Press                  Release dated October 19, 2005 and captioned “EVCI Career Colleges                  Receives Draft Report of Compliance Review of Interboro                  Institute.”                                                                                                                                                                                                  |
|                                         |    |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 99.5[30]                           | — | Unaudited                  financial statements of Technical Career Institutes, Inc. as of                  June 30,                  2005 and for the nine months ended June 30, 2005 and 2004, and                  the notes                  related thereto.                                                                                                                                            |
|                                         |    |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 99.6[30]                           | — | Audited                  financial statements of Technical Career Institutes, Inc. as of                  September                  30, 2004 and 2003 and for each of the years in the three-year period                  ended                  September 30, 2004 and the notes related thereto.                                                                                                          |
|                                         |    |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 99.7                  [30]         | — | Unaudited                  pro forma financial information for the year ended December 31,                  2004 and                  the nine months ended September 30, 2005 and the notes related                  thereto.                                                                                                                                                                               |
|                                         |    |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 99.8                  [31]         | — | Press                  release dated December 5, 2005 and captioned “EVCI Career Colleges                  Receives Final Report of Compliance Review of Interboro                  Institute.”                                                                                                                                                                                                  |
|                                         |    |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 99.9                  [31]         | — | Draft                  Report of Compliance Review of Interboro Institute dated October                  7,                  2005.                                                                                                                                                                                                                                                                           |
|                                         |    |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 99.10[31]                          | — | Response                  of Interboro Institute Inc., dated November 3, 2005, to two draft                  reports                  from the State Education Department of New York.                                                                                                                                                                                                                       |
|                                         |    |                                                                                                                                                                                                                                                                                                                                                                                                         |
| 99.11                  [31]        | — | Letter                  dated November 23, 2005 from Stephen H. Adolphus, President of                  Interboro                  Institute, to Joseph P. Frey, Assistant Commissioner- Office of                  Quality                  Assurance, New York State Education Department outlining Interboro                  Institute’s revised admissions screening                  procedures. |

----

| 99.12                  [31]   | — | Letter                  dated November 21, 2005 from Steven M. Gombos of Ritzert & Leyton to                  Joseph P. Frey, Assistant Commissioner, The State Education Department                  outlining the results of the independent investigation for the                  Audit                  Committee of the Board of Directors of EVCI Career Colleges Holding                  Corp. |
|-----------------------------------------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                        |
| 99.13                  [31]   | — | Letter                  dated December 2, 2005 from Joseph P. Frey, Assistant Commissioner-                  Office                  of Quality Assurance, the State Education Department of New York                  including                  attachment titled “State Education Department Analysis of Interboro                  Institute’s Response to the Draft Report.”         |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                        |
| 99.14                  [32]   | — | Press                  release dated January 13, 2006 and captioned “EVCI Career Colleges Reports                  New Student Caps for Interboro’s Spring 2006 Through Spring 2007                  Semesters.”                                                                                                                                                                          |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                        |
| 99.15                  [32]   | — | Letter                  dated December 19, 2005 with enclosures from the registrant to                  Joseph P.                  Frey, Assistant Commissioner.                                                                                                                                                                                                                                            |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                        |
| 99.16                  [32]   | — | Letter                  dated December 23, 2005 from Johanna Duncan-Poitier, Deputy Commissioner,                  to the registrant.                                                                                                                                                                                                                                                                       |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                        |
| 99.17                  [32]   | — | Letter                  dated January 4, 2006 with enclosure from the registrant to Johanna                  Duncan-Poitier, Deputy Commissioner.                                                                                                                                                                                                                                                           |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                        |
| 99.18                  [32]   | — | Letter                  dated January 11, 2006 from Johanna Duncan-Poitier, Deputy Commissioner,                  to the registrant.                                                                                                                                                                                                                                                                        |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                        |
| 99.19                  [33]   | — | Response                  of Interboro Institute to the December 2, 2005 Report from the                  New York                  State Education Department.                                                                                                                                                                                                                                             |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                        |
| 99.20                  [33]   | — | Letter                  dated February 2, 2006 from the New York State Education Department                  to                  EVCI.                                                                                                                                                                                                                                                                      |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                        |
| 99.21                  [34]   | — | Interboro                  Institute’s Comprehensive Institutional Effectiveness Plan with                  transmittal letter from the registrant dated February 22, 2006.                                                                                                                                                                                                                           |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                        |
| 99.22                  [34]   | — | Letter                  dated March 13, 2006 from the New York State Education Department                  to the                  Registrant.                                                                                                                                                                                                                                                              |
|                                    |    |                                                                                                                                                                                                                                                                                                                                                                                                        |
| 99.23                  [34]   | — | Letter                  dated March 14, 2006 from the New York State Education Department                  to the                  Registrant.                                                                                                                                                                                                                                                              |
|                                    |         |                                                                                                                                                                                                                                                                                                                                                                                                        |
| 99.24                  [34]   | — | Interboro                  Institute’s Mid-Point Self Study dated March 28, 2006 (without attachments                  with transmittal letter from the Registrant dated March 30,                  2006.                                                                                                                                                                                             |

----

| 99.25**   | — | Report                  of a Compliance Review of Interboro Institute June 19-20, 2006                  and October                  16-18, 2006; transmittal letter dated March 23, 2007 to Registrant                  from                  Joseph P. Frey of the New York State Education Department; Ratings                  for                  Each Checked Standard (for use in assessing the Compliance Review),                  and                  letter dated January 11, 2006 from Johanna Duncan-Poitier, Deputy                  Commissioner, referred to in the Compliance                  Report). |
|---------------------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| *   | Numbers                inside brackets indicate documents from which exhibits have been                incorporated by reference. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|
| **  | Previously              filed on              April 27, 2007.                                                                     |
| *** | Filed                herewith.                                                                                                    |

| [1]    | Incorporated                by reference to the Registrant’s Registration Statement on Form SB-2,                filed October 23, 1998, Registration No. 333-66085.                                   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                         |
| [2]    | Incorporated                by reference to Amendment No. 4, dated February 10, 1999, to the                Registrant’s Form SB-2, Registration No. 333-66085.                                        |
|   |                                                                                                                                                                                                         |
| [3]    | Incorporated                by reference to Registrant’s Form 10-QSB for the quarter ended September                30, 1999.                                                                          |
|   |                                                                                                                                                                                                         |
| [4]    | Incorporated                by reference to the Registrant’s Form 8-K dated January 14,                2000.                                                                                           |
|   |                                                                                                                                                                                                         |
| [5]    | Incorporated                by reference to the Registrant’s Form 8-K dated October 6,                2000.                                                                                            |
|   |                                                                                                                                                                                                         |
| [6]    | Incorporated                by reference to the Registrant’s Form 10-QSB for the quarter ended                September 30, 2000.                                                                      |
|   |                                                                                                                                                                                                         |
| [7]    | Incorporated                by reference to the Registrant’s Form 8-K dated July 1,                2001.                                                                                               |
|   |                                                                                                                                                                                                         |
| [8]    | Incorporated                by reference to the Registrant’s Form 10-QSB for the quarter ended                September 30, 2003.                                                                      |
|   |                                                                                                                                                                                                         |
| [9]    | Incorporated                by reference to the Registrant’s Form 10-KSB for the year ended December                31, 2002.                                                                          |
|   |                                                                                                                                                                                                         |
| [10]   | Incorporated                by reference to the Registrant’s Registration Statement on Form S-8 filed                December 31, 2002, Registration No. 333-102310.                                   |
|   |                                                                                                                                                                                                         |
| [11]   | Incorporated                by reference to the Registrant’s Registration Statement on Form S-8 filed                October 23, 2001, Registration No. 333-72080.                                     |
|   |                                                                                                                                                                                                         |
| [12]   | Incorporated                by reference to the Registrant’s Form 10-QSB for the quarter ended                September 30, 2003.                                                                      |
|   |                                                                                                                                                                                                         |
| [13]   | Incorporated                by reference to the Registrant’s Form 8-K dated October 10,                2003.                                                                                           |
|   |                                                                                                                                                                                                         |
| [14]   | Incorporated                by reference to the Registrant’s Form 10-QSB for the quarter ended                September 30, 2003.                                                                      |
|   |                                                                                                                                                                                                         |
| [15]   | Incorporated                by reference to Amendment No. 1 to the Registrant’s Registration Statement                on Form S-3, filed December 4, 2003, Registration No.                333-110567. |
|   |                                                                                                                                                                                                         |
| [16]   | Incorporated                by reference to the Registrant’s Form 10-KSB/A for the year ended December                31, 2003.                                                                        |
|   |                                                                                                                                                                                                         |
| [17]   | Incorporated                by reference to the Registrant’s Form 8-K dated March 29,                2004.                                                                                             |
|   |                                                                                                                                                                                                         |
| [18]   | Incorporated                by reference to the Registrant’s Form 10-QSB for the quarter ended June                30, 2004.                                                                           |
|   |                                                                                                                                                                                                         |
| [19]   | Incorporated                by reference to the Registrant’s definitive Proxy Statement dated May 2,                2005.                                                                              |
|   |                                                                                                                                                                                                         |
| [20]   | Incorporated                by reference to the Registrant’s Form 10-QSB for the quarter ended                September 30, 2004.                                                                      |
|   |                                                                                                                                                                                                         |
| [21]   | Incorporated                by reference to the Registrant’s Form 10-KSB for the year ended December                31, 2004.                                                                          |
|   |                                                                                                                                                                                                         |
| [22]   | Incorporated                by reference to the Registrant’s Form 8-K dated March 7, 2005.                                                                                                             |
|   |                                                                                                                                                                                                         |
| [23]   | Incorporated                by reference to the Registrant’s Form 10-Q for the quarter ended March 31,                2005.                                                                            |

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| [24]   | Incorporated                by reference to the Registrant’s Form 8-K dated July 1, 2005.                                       |
|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                  |
| [25]   | Incorporated                by reference to the Registrant’s Form 8-K dated July 18, 2005.                                      |
|   |                                                                                                                                  |
| [26]   | Incorporated                by reference to the Registrant’s Form 8-K dated September 16,                2005.                  |
|   |                                                                                                                                  |
| [27]   | Incorporated                by reference to the Registrant’s Form 8-K dated September 29,                2005.                  |
|   |                                                                                                                                  |
| [28]   | Incorporated                by reference to the Registrant’s Form 10-Q for the quarter ended September                30, 2005. |
|   |                                                                                                                                  |
| [29]   | Incorporated                by reference to the Registrant’s Form 8-K dated March 1,                2006.                       |
|   |                                                                                                                                  |
| [30]   | Incorporated                by reference to the Registrant’s Form 8-K/A dated September 16,                2005.                |
|   |                                                                                                                                  |
| [31]   | Incorporated                by reference to the Registrant’s Form 8-K dated December 5,                2005.                    |
|   |                                                                                                                                  |
| [32]   | Incorporated                by reference to the Registrant’s Form 8-K dated January 12,                2006.                    |
|   |                                                                                                                                  |
| [33]   | Incorporated                by reference to the Registrant’s Form 8-K dated February 3,                2006.                    |
|   |                                                                                                                                  |
| [34]   | Incorporated                by reference to the Registrant’s Form 10-K filed September 30,                2006.                 |
|   |                                                                                                                                  |
| [35]   | Incorporated                by reference to the Registrant’s Form 10-Q for the quarter ended March 31,                2006.     |
|   |                                                                                                                                  |
| [36]   | Incorporated                by reference to the Registrant’s Form 10-Q for the quarter ended June 30,                2006.      |
|   |                                                                                                                                  |
| [37]   | Incorporated                by reference to the Registrant’s Form 8-K dated October 26,                2006.                    |

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