National American University (NAUH) 10-K/A 2010 FY Annual report (amended)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-K/A

Amendment No. 1

ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended May 31, 2010

Commission File No. 001-34751

National American University Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	83-0479936
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)
5301 S. Highway 16, Suite 200
Rapid City, SD	57701
(Address of principal executive offices)	(Zip Code)

(605) 721-5200
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $.0001 par Value	The NASDAQ Stock Market
Title of each class	Name of each exchange on which registered

Securities registered pursuant to section 12(g) of the Act:
None
(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yeso Noþ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.Yeso Noþ

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yeso Noo

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to thisForm 10-K.o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filero Accelerated filero Non-accelerated filero
(Do not check if a smaller reporting company) Smaller reporting companyþ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yeso Noþ

As of August 16, 2010, there were 26,369,653 shares of Common Stock, $0.0001 par value per share outstanding.

The aggregate market value of the registrant’s common stock held by non-affiliates computed by reference to the price at which the common equity was last sold as of November 30, 2009, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $27.1 million.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the Registrant’s Definitive Proxy Statement for its 2010 Annual Meeting of Stockholders (which is expected to be filed with the Commission within 120 days after the end of the Registrant’s 2010 fiscal year) are incorporated by reference into Part III of this Report.

EXPLANATORY NOTE

The registrant filed with the Securities and Exchange Commission an Annual Report on Form 10-K for the year ended May 31, 2010 on August 18, 2010 (the “Form 10-K”). The registrant is filing this Amendment No. 1 to amend Item 8. Financial Statements and Supplemental Data in Part II of the Form 10-K solely to correct the inadvertent omission of the signature of Deloitte & Touche LLP, the registrant’s Independent Registered Public Accounting Firm, on the “Report of Independent Registered Public Accounting Firm.” The registrant had received a signed Report of Independent Registered Public Accounting Firm from Deloitte & Touche LLP prior to filing the Form 10-K with the Securities and Exchange Commission.

As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by our principal executive officer and principal financial officer are being filed as exhibits to this Amendment No. 1 on Form 10-K/A under Item 15 hereof. Except as expressly set forth in this Amendment No. 1, the Form 10-K has not been amended, updated or otherwise modified.

NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC AND SUBSIDIARIES

FORM 10-K

INDEX

	Page
PART II
Item 8. Financial Statements and Supplementary Data		3
PART IV
Item 15. Exhibits and Financial Statement Schedules		33
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

-2-

Item 8. Financial Statements and Supplementary Data.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

National American University Holdings, Inc.

	Page
Annual Financial Statements:
Report of Independent Registered Public Accounting Firm		4
Consolidated Balance Sheets as of May 31, 2010 and 2009		5
Consolidated Statements of Operations for the fiscal years ended May 31, 2010, 2009 and 2008		6
Consolidated Statements of Stockholders’ Equity for the fiscal years ended May 31, 2010, 2009 and 2008		8
Consolidated Statements of Cash Flows for the fiscal years ended May 31, 2010, 2009 and 2008		9
Notes to Annual Consolidated Financial Statements		11
Financial Statement Schedules
All schedules are omitted because they are not applicable or not required.

-3-

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
National American University Holdings, Inc.and Subsidiaries
Rapid City, South Dakota

We have audited the accompanying consolidated balance sheets of National American University Holdings, Inc. and subsidiaries (the “Company”) as of May 31, 2010 and 2009, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended May 31, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of National American University Holdings, Inc. and subsidiaries as of May 31, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended May 31, 2010, in conformity with accounting principles generally accepted in the United States of America.

Minneapolis, Minnesota
August 18, 2010

-4-

NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF MAY 31, 2010 AND 2009
(In thousands except share and per share data)

	2010			2009
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	8,695		$	3,508
Short term investments		11,109			4,417
Student receivables — net of allowance of $203 and $115 at May 31, 2010 and 2009, respectively		1,823			1,207
Other receivables		952			203
Bookstore inventory		920			604
Deferred income taxes		1,574			1,090
Prepaid and other current assets		1,759			410
Total current assets		26,832			11,439
Total Property and Equipment — Net (Note 1)		15,881			12,152
OTHER ASSETS:
Condominium inventory		3,046			3,802
Land held for future development		312			312
Course development — net of accumulated amortization of $1,149 and $804 at May 31, 2010 and 2009, respectively		768			767
Other		447			393
		4,573			5,274
TOTAL	$	47,286		$	28,865
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Long-term debt — current portion	$	0		$	2,147
Line of credit — real estate		0			3,305
Accounts payable		4,315			3,564
Dividends payable		11,116			0
Student accounts payable		322			314
Deferred income		305			367
Income tax payable		231			551
Accrued and other liabilities		6,109			4,900
Total current liabilities		22,398			15,148
LONG-TERM DEBT — Net of current portion		0			6,507
DEFERRED INCOME TAXES		1,151			1,503
OTHER LONG-TERM LIABILITIES		2,380			815
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Common stock (50,000,000 authorized, 21,819,653 issued and outstanding as of May 31, 2010, 0 issued and outstanding as of May 31, 2009; $0.0001 par value per share)		2			0
Additional paid-in capital		19,165			385
Retained earnings		2,389			7,251
Accumulated other comprehensive income		96			109
		21,652			7,745
Less treasury stock at cost		0			(1,869	)
Total National American University Holdings, Inc. stockholders’ equity		21,652			5,876
Non-controlling interest		(295	)		(984	)
Total equity		21,357			4,892
TOTAL	$	47,286		$	28,865

The accompanying notes are an integral part of these consolidated financial statements.

-5-

NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED MAY 31, 2010, 2009 AND 2008
(In thousands except share and per share data)

	2010			2009			2008
REVENUE:
Academic revenue	$	82,418		$	56,874		$	44,218
Auxiliary revenue		5,528			4,036			4,062
Rental income — apartments		918			890			782
Condominium sales		932			784			395
Total revenue		89,796			62,584			49,457
OPERATING EXPENSES:
Cost of educational services		20,419			17,398			15,130
Selling, general and administrative		49,886			37,626			32,642
Auxiliary expense		2,076			1,595			1,523
Cost of condominium sales		761			558			122
Loss on disposition of property		29			3			5
Total operating expenses		73,171			57,180			49,422
OPERATING INCOME		16,625			5,404			35
OTHER INCOME (EXPENSE):
Interest income		206			242			282
Interest expense		(525	)		(834	)		(1,023	)
Other income — net		218			93			92
Total other expense		(101	)		(499	)		(649	)
INCOME (LOSS) BEFORE INCOME TAXES		16,524			4,905			(614	)
INCOME TAX (EXPENSE) BENEFIT		(6,485	)		(1,797	)		231
NET INCOME (LOSS)		10,039			3,108			(383	)
NET (INCOME) LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST		(4	)		13			(37	)
NET INCOME (LOSS) ATTRIBUTABLE TO NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC. AND SUBSIDIARIES		10,035			3,121			(420	)
OTHER COMPREHENSIVE INCOME (LOSS) —
Unrealized gains (losses) on investments		(13	)		81			117
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC.	$	10,022		$	3,202		$	(303	)

The accompanying notes are an integral part of these consolidated financial statements.

(continued)

-6-

NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MAY 31, 2010, 2009 AND 2008
(In thousands except share and per share data)

	2010				2009		2008
Basic EPS
Class A
Distributed earnings	$	135.89			$	2.00	$	2.00
Undistributed earnings		(40.64	)			29.21		(6.20	)
Total	$	95.25			$	31.21	$	(4.20	)
Common
Distributed earnings	$	0.22		��	$	—	$	—
Undistributed earnings		(0.26	)			—		—
Total	$	(0.04	)		$	—	$	—
Diluted EPS
Class A
Distributed earnings	$	135.89			$	2.00	$	2.00
Undistributed earnings		(40.64	)			29.21		(6.20	)
Total	$	95.25			$	31.21	$	(4.20	)
Common
Distributed earnings	$	0.22			$	—	$	—
Undistributed earnings		(0.26	)			—		—
Total	$	(0.04	)		$	—	$	—
Weighted Average Shares outstanding
Basic EPS
Class A		100,000				100,000		100,000
Common		3,103,847				n/a		n/a
Diluted EPS
Class A		100,000				100,000		100,000
Common		3,103,959				n/a		n/a

The accompanying notes are an integral part of these consolidated financial statements.

(concluded) (concluded)

-7-

NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED MAY 31, 2010, 2009 AND 2008
(In thousands except share and per share data)

									Accumulated						Equity
			Additional						other						attributable to			Total
	Common		paid-in			Retained			comprehensive			Treasury			non-controlling			stockholders’
	stock		capital			Earnings			income			stock			interest			equity
Balance — May 31, 2007	$	0	$	385		$	4,664		$	(89	)	$	(1,869	)	$	(1,008	)	$	2,083
Dividends declared		0		0			(57	)		0			0			0			(57	)
Comprehensive income:
Net income (loss)		0		0			(420	)		0			0			37			(383	)
Unrealized gain on investments		0		0			0			117			0			0			117
Balance — May 31, 2008	$	0	$	385		$	4,187		$	28		$	(1,869	)	$	(971	)	$	1,760
Dividends declared		0		0			(57	)		0			0			0			(57	)
Comprehensive income:
Net income (loss)		0		0			3,121			0			0			(13	)		3,108
Unrealized gain on investments		0		0			0			81			0			0			81
Balance — May 31, 2009	$	0	$	385		$	7,251		$	109		$	(1,869	)	$	(984	)	$	4,892
Recapitalization of Dlorah, Inc.		1		22,508			0			0			0			0			22,509
Retirement of treasury stock		0		(1,869	)		0			0			1,869			0			0
Merger costs associated with reverse merger		0		(3,365	)		0			0			0			0			(3,365	)
Contributed capital from non-controlling interest holders		0		0			0			0			0			685			685
Share based compensation expense		0		1,507			0			0			0			0			1,507
Conversion of Class A shares to common		1		(1	)		0			0			0			0			0
Dividends declared		0		0			(14,897	)		0			0			0			(14,897	)
Comprehensive income:
Net income		0		0			10,035			0			0			4			10,039
Unrealized loss on investments		0		0			0			(13	)		0			0			(13	)
Balance — May 31, 2010	$	2	$	19,165		$	2,389		$	96		$	0		$	(295	)	$	21,357

The accompanying notes are an integral part of these consolidated financial statements.

-8-

NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED MAY 31, 2010, 2009 AND 2008
(In thousands except share and per share data)

	2010			2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	10,039		$	3,108		$	(383	)
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
Depreciation and amortization		2,320			2,165			2,114
Gain on disposition of property and equipment		(89	)		(110	)		(268	)
Provision for uncollectable tuition		2,355			1,638			1,357
Noncash compensation expense		1,507			0			0
Deferred income taxes		(453	)		192			(342	)
Changes in assets and liabilities:
Accounts and other receivables		(3,750	)		(1,670	)		(1,547	)
Student notes		(17	)		0			0
Bookstore inventory		(316	)		(54	)		(164	)
Prepaid and other current assets		(1,179	)		187			(164	)
Condominium inventories		756			529			0
Accounts payable		324			(29	)		1,509
Deferred income		(62	)		103			71
Other long-term liabilities		758			103			129
Income tax receivable/payable		(320	)		1,352			(39	)
Accrued and other liabilities		1,209			1,709			435
Net cash flows provided by operating activities		13,082			9,223			2,708
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments		(16,397	)		(2,100	)		(549	)
Proceeds from sale of investments		9,687			941			1,579
Purchases of property and equipment		(4,671	)		(815	)		(3,511	)
Proceeds from sale of property and equipment		167			211			396
Payments (issuance) of student notes		0			22			(19	)
Course development		(346	)		(220	)		(188	)
Construction of development property with line of credit borrowings		0			(452	)		(3,879	)
Other		(7	)		1			(1	)
Net cash flows used in investing activities		(11,567	)		(2,412	)		(6,172	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on lines of credit		0			2,650			2,985
Repayments of lines of credit		(3,305	)		(5,796	)		(1,514	)
Decrease in outstanding checks in excess of book balance		0			0			(1,040	)
Borrowings of long-term debt		0			0			3,151
Repayments of long-term debt		(8,654	)		(2,660	)		(1,990	)
Construction of development property with line of credit borrowings		0			452			3,879
Contributed capital by non-controlling interest holders		685			0			0
Cash received in reverse merger		22,092			0			0
Cash paid for merger costs		(3,365	)		0			0
Dividends paid		(3,781	)		(57	)		(57	)
Net cash flows provided by (used in) financing activities		3,672			(5,411	)		5,414

(continued)

The accompanying notes are an integral part of these consolidated financial statements.

-9-

NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED MAY 31, 2010, 2009 AND 2008
(In thousands except share and per share data)

	2010		2009		2008
NET INCREASE IN CASH AND CASH EQUIVALENTS	$	5,187	$	1,400	$	1,950
CASH AND CASH EQUIVALENTS — Beginning of year		3,508		2,108		158
CASH AND CASH EQUIVALENTS — End of period	$	8,695	$	3,508	$	2,108
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest — net of $0, $38, and $0 capitalized during the years ended May 31, 2010, 2009 and 2008, respectively	$	554	$	848	$	1,008
Cash paid during the year for income taxes	$	7,884	$	254	$	150
Dividends declared, unpaid	$	11,116	$	—	$	—

(concluded)

The accompanying notes are an integral part of these consolidated financial statements.

-10-

NATIONAL AMERICAN UNIVERSITY HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts, except share and per share, in thousands)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations —National American University Holdings, Inc., formerly known as Camden Learning Corporation (the “Company”), was incorporated in the State of Delaware on April 10, 2007. The Company was a special purpose acquisition company formed to serve as a vehicle for the acquisition of an operating business. On November 23, 2009, Dlorah, Inc., a South Dakota corporation (“Dlorah”), became a wholly-owned subsidiary of the Company (the “Transaction”), pursuant to an Agreement and Plan of Reorganization between the Company and Dlorah. In connection with the Transaction, the stockholders of Dlorah received approximately 77% of the equity of the Company, and Dlorah was deemed to be the acquirer for accounting purposes. The Transaction has been accounted for as a reverse merger accompanied by a recapitalization. As a result of the Transaction, the historical results of Dlorah became the historical results of the Company. The accompanying consolidated balance sheet for the year ended May 31, 2009, and the statements of operations, stockholders’ equity and cash flows for the years ended May 31, 2009 and 2008 have been updated to reflect the effects of the recapitalization on common stock, stockholders’ equity accounts and earnings per share.

The Company’s common stock is listed on The Nasdaq Global Market. The Company owns and operates National American University (“NAU” or the “University”). NAU is a regionally accredited, for-profit, multi-campus institution of higher learning, offering Associate, Bachelor’s and Master’s degree programs in business-related disciplines, such as accounting, applied management, business administration and information technology, and in healthcare-related disciplines, such as nursing and healthcare management. Courses are offered through educational sites, as well as online via the Internet. Operations include educational sites located in Colorado, Kansas, Minnesota, Missouri, New Mexico, South Dakota and Texas, and distance learning operations and central administration offices located in Rapid City, South Dakota. A substantial portion of NAU’s academic income is dependent upon federal student financial aid programs, employer tuition assistance, online learning programs and contracts to provide instruction and course materials to other educational institutions. To maintain eligibility for financial aid programs, NAU must comply with Department of Education requirements, which include, among other items, the maintenance of certain financial ratios.

The Company, through its Fairway Hills real estate division, also manages apartment units and develops and sells multi-family residential real estate in the Rapid City, South Dakota area.

Approximately 92%, 91% and 89% of the Company’s total revenues for the years ended May 31, 2010, 2009 and 2008, respectively were derived from NAU’s academic revenue.

Principles of Consolidation— The Company’s fiscal year end is May 31. The Company consolidates the accounts of all wholly owned divisions, including NAU, the Fairway Hills Park and Recreational Association, the Park West Owners’ Association, the Vista Park Owners’ Association, and the Company’s interest in Fairway Hills Section III Partnership (the “Partnership”). The Partnership is 50% owned by the Company and 50% owned by individual family members, most of whom are also either direct or indirect stockholders of the Company. All material intercompany transactions and balances have been eliminated in consolidation.

-11-

The Partnership is deemed to be a variable interest entity (“VIE”) under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810-10,Consolidation. An enterprise is required to consolidate a VIE if that enterprise is the primary beneficiary. An enterprise is considered the primary beneficiary if it has a variable interest that will absorb a majority of the entity’s expected losses, receive a majority of the entity’s expected residual returns, or both.

The Company has determined that the Partnership qualifies as a VIE and that the Company is the primary beneficiary of the Partnership. Accordingly, the Company consolidated assets, liabilities, and net income of the Partnership within its consolidated balance sheets and statements of operations. As of May 31, 2010 and 2009, the consolidated balance sheets include Partnership assets of $1,107 and $1,230, respectively, and Partnership liabilities of $64 and $1,022, respectively. The consolidated statements of operations included Partnership net income (loss) of $8, $(26), and $74 for the years ended May 31 2010, 2009 and 2008, respectively.

Estimates— The preparation of financial statements in conformity with the United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements. On an ongoing basis, the Company evaluates the estimates and assumptions, including those related to revenue recognition, bad debts, fixed assets, income taxes, benefit plans, and certain accruals. Actual results could differ from those estimates.

Cash and Cash Equivalents— The Company considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. Cash is held in bank accounts that periodically exceed insured limits; however, no losses have occurred, and the Company believes the risk of loss is not significant.

Investments— The Company’s investments consist of government-backed bonds and certificates of deposit. The bonds are classified as “available-for-sale.” Available-for-sale securities represent securities carried at fair value in the accompanying consolidated balance sheets. Unrealized gains and losses on these securities are excluded from earnings and are reported net of taxes as a separate component of stockholders’ equity. For purposes of calculating gross realized gains and losses on sales of investments, the amortized cost of each investment sold is used. The net realized gains and losses on sales of investments totaled $0 for each of the years ended May 31, 2010 and 2009, and approximately $2 and $1 for the year ended May 31, 2008. The net realized gain or loss is included in other income — net in the accompanying consolidated statements of operations.

The Company’s investments were comprised of the following at May 31(in thousands):

	2010						2009
			Gross		Gross				Gross		Gross
			Unrealized		Unrealized				Unrealized		Unrealized
	Fair		Holding		Holding		Fair		Holding		Holding
	Value		Gains		Losses		Value		Gains		Losses
U.S. Treasury debt securities	$	10,348	$	145	$	—	$	2,373	$	143	$	—
Certificates of deposit		655		13		—		1,934		17		—
Other debt securities		106		5		—		110		10		—
Total	$	11,109	$	163	$	—	$	4,417	$	170	$	—

-12-

As of May 31, 2010, the Company’s investment maturity dates are as follows (in thousands):

			Gross		Gross		Gross
			Unrealized		Unrealized		Unrealized
	Amortized		Holding		Holding Losses		Holding Losses		Fair
	Cost		Gains		< 1 Year		> 1 Year		Value
Less than one year	$	8,626	$	13	$	—	$	—	$	8,639
One to five years		2,320		150		—		—		2,470
Total	$	10,946	$	163	$	—	$	—	$	11,109

Declines in the fair value of individual securities classified as available-for-sale below their amortized cost that are determined to be other than temporary result in write-downs of the individual securities to their fair value, with the resulting write-downs included in current earnings as realized losses. Unrealized losses that may occur are generally due to changes in interest rates and, as such, are considered by the Company to be temporary. Management evaluates securities for other-than-temporary impairment on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investments in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

Student Accounts Receivable— Student accounts receivable are recorded at estimated net realizable value and are revised periodically based on estimated future collections. Interest and service charges are applied to all past due student accounts receivable; however, collections are first applied to principal balances until such time that the entire principal balance has been received. Student accounts are charged off only when reasonable collection means are exhausted. The University has determined that most accounts with an outstanding balance of 180 days after the start of the term are uncollectible. Bad debt expense is included in cost of educational services on the consolidated statements of operations.

Other Receivables— Other receivables consist of institutional which are amounts due from other educational institutions to which the University provides instruction and course materials and are stated at net realizable value.

Bookstore Inventory— Inventories consist mainly of textbooks and supplies. Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out method.

Property and Equipment— Property and equipment are stated at cost. Renewals and improvements are capitalized, while repairs and maintenance are expensed when incurred. Upon the retirement, sale or disposition of assets, costs and related accumulated depreciation are eliminated from the accounts and any gain or loss is reflected in operating income. For financial statement purposes, depreciation is computed using the straight-line method over the following estimated useful lives:

	Years
Buildings and building improvements		19–40
Land improvements		10–20
Furniture, vehicles, and equipment		5–15

For tax purposes, depreciation is computed using the straight-line and accelerated methods.

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Property and equipment — net consists of the following as of May 31:

	2010			2009
Land		718			718
Land improvements		374			374
Buildings and building improvements		18,300			16,147
Furniture, vehicles, and equipment		17,316			14,564
Total gross property and equipment		36,708			31,803
Less Accumulated Depreciation		(20,827	)		(19,651	)
Total net property and equipment	$	15,881		$	12,152

Capitalized Course Development Costs— The University internally develops curriculum and electronic instructional materials for certain courses. The curriculum is primarily developed by employees and contractors. The curriculum is integral to the learning system. Customers do not acquire the curriculum or future rights to it.

The Company capitalizes course development costs. Costs that qualify for capitalization are external direct costs, payroll, and payroll-related costs. Costs related to general and administrative functions are not capitalizable and are expensed as incurred. Capitalization ends at such time that the course and/or material is available for general use by faculty and students. After becoming available for general use, the costs are amortized on a course-by-course basis over a period of three to five years. After the amortization period commences, the cost of maintenance and support is expensed as incurred. If it is determined that the curriculum will not be used, the capitalized curriculum costs are written off and expensed in the period of this determination.

Impairment of Long-Lived Assets— Long-lived assets are reviewed for impairment when circumstances indicate the carrying value of an asset may not be recoverable. For assets that are to be held and used, an impairment loss is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows, or internal and external appraisals, as applicable. Assets to be held for sale are carried at the lower of carrying value or fair value, less cost to sell. The Company had no impairments in 2010, 2009 or 2008

Condominium Inventory— Condominium inventory is stated at cost (including capitalized interest. Condominium construction costs are accumulated on a specific identification basis. Under the specific identification basis, cost of revenues includes all applicable land acquisition, land development and specific construction costs (including direct and indirect costs) of each condominium paid to third parties. Land acquisition, land development and condominium construction costs do not include employee related benefit costs. The specific construction and allocated land costs of each condominium, including models, are included in direct construction. Allocated land acquisition and development costs are estimated based on the total costs expected in a project. Direct construction also includes amounts paid through the closing date of the condominium for construction materials and contractor costs. Condominium inventory is recorded as a long term asset due to the normal operating cycle being greater than one year.

Deferred Income Taxes— Deferred income taxes are provided using the asset and liability method whereby deferred tax assets and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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Non-Controlling Interest— The non-controlling interest presented on the consolidated statements of operations represents the individual owners’ share of the Partnership’s income or loss. The consolidated balance sheet amount “Non-controlling interest” represents the individual owners’ share of the Partnership obligations in excess of Partnership assets. The Company has determined the non-controlling owners to have a legal obligation to fund such deficits and believes it is fully collectable at May 31, 2010.

Financial Instruments— As of May 31, 2010 and 2009, the Company’s financial instruments consisted of cash equivalents, investments, accounts receivable, accounts payable, and long-term liabilities. The fair value of fixed-rate liabilities is estimated based on current rates offered to the Company for instruments with similar ratings and maturities. The difference between the carrying value of these financial instruments and their fair value was not material as of May 31, 2010 and 2009.

Academic Revenue Recognition— Academic revenue represents tuition revenue and the revenue generated through our affiliate relationships. Tuition revenue and affiliate revenue is recorded ratably over the length of respective courses. Academic revenue also includes certain fees and charges assessed at the start of each term. The portion of tuition and registration fees payments received but not earned is recorded as student accounts payable and reflected as a current liability on the accompanying consolidated balance sheets, as such amount represents revenue that the Company expects to earn within the next year. Academic revenue is reported net of adjustments for refunds and scholarships. If a student withdraws prior to the completion of the academic term, students are refunded the portion of tuition and registration fees already paid, that pursuant to the Company’s refund policy and applicable federal and state law and accrediting agency standards, the Company is not entitled to. Refunds and scholarships are recorded during the respective terms.

Auxiliary Revenue— Auxiliary revenue represents revenues from the University’s food service, bookstore, and dormitory operations. Revenue is recognized as items are sold and services are performed.

Rental Income— Rental income is primarily obtained from tenants of three apartment complexes under short-term operating leases. Tenants are required to pay rent on a monthly basis. Rent not paid by the end of the month is considered past due, while rent paid in advance is included in deferred income on the accompanying consolidated balance sheets. If a tenant becomes 60 days past due, eviction procedures are started.

Rental Expense— The University accounts for rent expense under its long-term operating leases using the straight-line method. Certain of the University’s operating leases contain rent escalator provisions. Accordingly, a $2,380 and $663, deferred rent and tenant improvement liability at May 31, 2010 and 2009, respectively, is recorded in other long-term liabilities on the accompanying consolidated balance sheets.

Advertising— The University follows the policy of expensing the cost of advertising as incurred. Advertising costs of $7,614, $6,151 and $5,339 for 2010, 2009 and 2008, respectively, are included in selling, general, and administrative expenses on the accompanying consolidated statements of operations.

Business Expansion and Development— The University continues to commit resources to the development of new branch campuses and new programs, as well as the expansion of existing programs into new markets. During the year ended May 31, 2010, the University continued to develop a campus in the state of Texas, additional hybrid learning centers in Lee’s Summit, Missouri; Minnetonka, Minnesota; Denver, Colorado; Dallas, Texas; Wichita, Kansas; and Colorado Springs, Colorado and continued to develop and expand the nursing and distance learning programs. Business expansion and development costs include salaries, marketing and advertising, and other third-party expenses incurred to support such development and expansion. The amounts are included in selling, general, and administrative expenses in the accompanying consolidated statements of operations and totaled $6,529, $3,241 and $4,758 in 2010, 2009 and 2008, respectively.

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2. RECLASSIFICATION

Certain items have been reclassified within operating expenses in the 2009 and 2008 statements of operations in order to conform with the 2010 presentation. Specifically, rent expense (which included rent, common area maintenance (CAM) fees, and property taxes) was reclassified from selling, general and administrative to cost of education. The reclassification totaled $4,582 and $4,259 in 2009 and 2008, respectively. There was no impact to operating income or net income (loss) as previously reported.

3. EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding during the applicable period. Diluted earnings per share reflect the potential dilution that could occur assuming vesting, conversion or exercise of all dilutive unexercised warrants and restricted stock. As described in Note 11, the Company had one class of common stock outstanding as of May 31, 2010. The class A stock was converted to common stock on May 27, 2010; however, due to the limited number of days between the conversion and the end of the year, the Company utilized the two class method to calculate and report earnings per share for each class of stock for 2010. For purposes of calculating basic and diluted earnings per share, undistributed earnings are allocated to the Class A stock and common stock based on the proportion of weighted average outstanding shares of each class of stock for the year ending May 31. During the periods shown below in 2009 and 2008, only one class of common stock was outstanding and there were no dilutive securities outstanding.

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	For the year
	ended May 31,
	2010			2009		2008
Numerator:
Net income		10,035,000			3,121,000		(420,000	)
Distributed earnings (DE)		14,900,751			200,000		200,000
Undistributed earnings (UE)		(4,865,751	)		2,921,000		(620,000	)
UE attributable to Class A — basic		(4,063,868	)		2,921,000		(620,000	)
UE attributable to Common — basic		(801,883	)		n/a		n/a
DE attributable to Class A — basic		13,588,792			200,000		200,000
Denominator:
Class A shares — basic and diluted		100,000			100,000		100,000
Weighted average shares outstanding used to compute basic net income per common share		3,103,847			n/a		n/a
Effect of Unvested compensatory restricted shares		112			n/a		n/a
Common Shares used to compute diluted net income per share		3,103,959			n/a		n/a
Basic net income per Class A share		95.25			31.21		(4.20	)
Basic net loss per Common share		(0.04	)		—		—
Diluted net income per Class A share		95.25			31.21		(4.20	)
Diluted net loss per Common share		(0.04	)		—		—

Outstanding warrants of 2,800,000 were not included in the computation of diluted net income per common share in 2010 because their effect would be antidilutive.

4. RECENTLY ADOPTED AND NEW ACCOUNTING PRONOUNCEMENTS

In June 2009, the FASB issued a new standard to update FASB ASC Topic 810,Consolidation. This standard is intended to improve financial reporting by enterprises involved with VIEs. This standard is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within the first annual reporting period, and for interim and annual reporting periods thereafter. This will be effective for the Company’s fiscal year beginning June 1, 2010. The Company is evaluating the impact of this statement on its consolidated financial statements and does not expect a material impact as a result of adoption of this standard.

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In January 2010, the FASB issued Accounting Standards Update 2010-06Fair Value Measurement and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements.This guidance provides for the following new required disclosures related to fair value measurements: 1) the amounts of and reasons for significant transfers in and out of level one and level two inputs and 2) separate presentation of purchases, sales, issuances, and settlements on a gross basis rather than as one net number for level three reconciliations. The guidance also clarifies existing disclosures as follows: 1) provide fair value measurement disclosures for each class of assets and liabilities and 2) provide disclosures about the valuation techniques and inputs used for both recurring and nonrecurring level two or level three inputs. The new disclosures and clarifications of existing disclosures were effective for the Company’s fourth quarter ended May 31, 2010. Disclosures about purchases, sales, issuances, and settlements in the roll forward of activity for level three fair value measurements will be effective for the Company’s fourth quarter ended May 31, 2011. The Company has adopted this standard, but it did not have a material effect on the Company’s financial statements.

In June 2009, the FASB issued Accounting StandardsSubsequent Events (Topic 855)which established general standards of accounting for an disclosure of events that occur after the balance sheet date, but before the financial statements are issued or available to be issued. This Standard is effective for financial periods ending after June 30, 2009. Then in February 2010, the FASB issued Accounting Standards Update 2010-09Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements.This standard eliminates the requirement of an SEC filer to disclose the date through which subsequent events have been evaluated. The Company has adopted the new and updated standard and it did not have a material effect on the Company’s consolidated balance sheet or required financial statement disclosures.

5. DEPARTMENT OF EDUCATION REQUIREMENTS

The University extends unsecured credit to a portion of the students who are enrolled throughout the campuses for tuition and other educational costs. A substantial portion of credit extended to students is repaid through the students’ participation in various federal financial aid programs authorized by Title IV Higher Education Act of 1965, as amended (HEA). The University is required under 34 CFR 600.5(d) to maintain at least 10% of its revenues from non-Title IV HEA program funds. The University believes they are in compliance with this requirement for the years ended May 31, 2010, 2009, and 2008 as shown in the underlying calculation:

	2010				2009				2008
Title IV HEA funds received		58,250,685				39,877,405				30,016,817
Academic revenue (cash basis)		76,545,809	=76.10	%		55,733,845	=71.55	%		44,371,114	=67.65	%

To participate in Title IV Programs, a school must be authorized to offer its programs of instruction by relevant state education agencies, be accredited by an accrediting commission recognized by the DOE, and be certified as an eligible institution by the DOE. For this reason, the schools are subject to extensive regulatory requirements imposed by all of these entities. After the schools receive the required certifications by the appropriate entities, the schools must demonstrate their compliance with the DOE regulations of the Title IV Programs on an ongoing basis. Included in these regulations is the requirement that the Company must satisfy specific standards of financial responsibility. The DOE evaluates institutions for compliance with these standards each year, based upon the institution’s annual audited financial statements, as well as following a change in ownership of the institution. Under regulations which took effect July 1, 1998, the DOE calculates the institution’s composite score for financial responsibility based on its (i) equity ratio, which measures the institution’s capital resources, ability to borrow and financial viability; (ii) primary reserve ratio, which measures the institution’s ability to support current operations from expendable resources; and (iii) net income ratio, which measures the institution’s ability to operate at a profit. This composite score can range from -1 to +3.

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An institution that does not meet the DOE’s minimum composite score requirements of 1.5 may establish its financial responsibility by posting a letter of credit or complying with additional monitoring procedures as defined by the DOE. Based on the consolidated financial statements for the 2010, 2009, and 2008 fiscal years, the University’s calculations result in a composite score of 2.4, 1.6, and 0.5, respectively. Therefore the University currently meets the minimum composite score requirement as most recently required by the DOE.

6. LONG-TERM DEBT

During the year ended May 31, 2010, the Company utilized reserved cash to pay all outstanding debt in full as the secondary offering did not close until June 1, 2010. At May 31, 2010 and 2009, long-term debt consisted of the following:

Notes Payable	2010		2009
Note payable to Great Western Bank; matures February 2014; requires monthly payments of $42, including principal and interest; accrues interest at 6.45%; secured by real estate and personally guaranteed by a Company stockholder.	$	0	$	3,582
Note payable to Wells Fargo Bank; matures June 1, 2011; requires monthly payments of $30 including principal and interest; accrues interest at 6%; secured by cash, savings, and investment accounts held at Wells Fargo Bank.		0		714
Note payable to Great Western Bank; matures March 26, 2012; requires monthly payments of $19, including principal and interest; accrues interest at a variable rate (a) (3.25% at May 31, 2009); secured by substantially all assets of NAU and personally guaranteed by a Company stockholder.		0		611
Note payable to Great Western Bank; matures November 28, 2012; requires monthly payments of $13, including principal and interest; accrues interest at a variable rate (a) (4% at May 31, 2009); secured by substantially all assets of NAU and personally guaranteed by a Company stockholder.		0		499
Note payable to Great Western Bank; matures August 17, 2011; requires monthly payments of $15, including principal and interest; accrues interest at a variable rate (a) (5% at May 31, 2009); secured by substantially all assets of NAU and personally guaranteed by a Company stockholder.		0		364
Note payable to Great Western Bank; matures May 18, 2011; requires monthly payments of $13, including principal and interest; accrues interest at a variable rate (a) (3.25% at May 31, 2009); secured by substantially all assets of NAU and personally guaranteed by a Company stockholder.		0		264

(continued)

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Notes Payable	2010		2009
Note payable to Great Western Bank; matured on May 18, 2010; requires monthly payments of $16, including principal and interest; accrues interest at a variable rate (a) (3.25% at May 31, 2009); secured by substantially all assets of NAU and personally guaranteed by a Company stockholder.	$	0	$	175
Note payable to Great Western Bank; matures on December 8, 2010; requires monthly payments of $10, including principal and interest; accrues interest at a variable rate (a) (4% interest at May 31, 2009); secured by substantially all assets of NAU and personally guaranteed by a Company stockholder.		0		177
Note payable to Great Western Bank; matures on September 25, 2010; requires monthly payments of $9, including principal and interest; accrues interest at a variable rate (a) (3.25% at May 31, 2009); secured by substantially all assets of NAU and personally guaranteed by a Company stockholder.		0		137
Note payable to Great Western Bank; matured on June 2, 2010; requires monthly payments of $2, including principal and interest; accrues interest at a variable rate (a) (3.25% at May 31, 2009); secured by substantially all assets of NAU and personally guaranteed by a Company stockholder.		0		24
Notes payable to related parties		0		1,147
Other notes payable		0		960
Total long-term debt		0		8,654
Less current portion		0		2,147
Long-term portion		0		6,507

(a) Variable rates are based on prime rate plus an adjustment, which is specific to each note payable agreement.

(concluded)

The Company was in compliance with all debt covenants at May 31, 2009.

7. LINES OF CREDIT

The University maintains a $2,000 revolving line of credit with Great Western Bank that matures in September 2010. Advances under the line bear interest at a variable rate based on prime (5% at May 31, 2010) and are secured by substantially all assets of the University and the personal guarantee of a Company shareholder. No advances had been made on this line of credit at May 31, 2010 or 2009.

The University also has available an additional $3,000 line of credit with Wells Fargo Bank that matures in April 2011. Advances under the line bear interest at a variable rate based on prime (4.50% at May 31, 2010) and are secured by checking, savings, and investment accounts held by Wells Fargo Bank. No advances had been made on this line of credit at May 31, 2010 or 2009.

During 2009, the Company utilized a line of credit with Great Western Bank to fund the construction of a new building (see Note 15). The line of credit had borrowings of $3,305 at May 31, 2009, and was paid in full and closed during the year ended May 31, 2010.

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8. LEASES

The University leases building facilities for branch operations and equipment for classroom operations under operating leases with various terms and conditions. Total rent expense for the years ended May 31, 2010, 2009 and 2008, was $3,752, $3,506 and $3,542, respectively.

Future minimum lease payments on noncancelable operating leases for the five years ending May 31 are as follows:

2011	$	3,898
2012		3,571
2013		3,365
2014		3,374
2015		3,345
Thereafter		17,489

9. INCOME TAXES

Components of the provision for income taxes for the years ended May 31, 2010, 2009 and 2008, were as follows:

	2010			2009		2008
Current tax expense:
Federal	$	6,116		$	1,562	$	108
State		780			43		3
		6,896			1,605		111
Deferred tax expense (benefit):
Federal		(382	)		162		(320	)
State		(29	)		30		(22	)
		(411	)		192		(342	)
Total tax expense (benefit)	$	6,485		$	1,797	$	(231	)

The effective tax rate varies from the statutory federal income tax rate for the following reasons:

	2010			2009			2008
Statutory		34.0	%		34.0	%		34.0	%
State income taxes — net of federal benefit		3.0			1.5			3.0
Permanent differences		2.3			1.1			0.6
Effective income tax rate		39.3	%		36.6	%		37.6	%

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Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred assets (liabilities) as of May 31 were as follows:

	2010			2009
Deferred income tax assets:
Account receivable allowances	$	96		$	63
Bad debt write-offs		594			411
Charitable contributions		0			135
Accrued salaries		1,226			619
Start up costs		411			0
Deferred rent		869			239
Total deferred income tax assets		3,196			1,467
Deferred income tax liabilities:
Fixed assets and course development		(2,482	)		(1,680	)
Prepaid expenses		(236	)		(139	)
Other		(55	)		(61	)
Total deferred income tax liabilities		(2,773	)		(1,880	)
Net deferred income tax assets (liabilities)	$	423		$	(413	)

The Company has complied with ASC Topic 740,Income Taxes, formerly FIN No. 48,Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109, which requires that income tax positions must be more likely than not to be sustained based solely on their technical merits in order to be recognized. The Company has recorded no liability for uncertain tax positions. The Company has elected to record interest and penalties from unrecognized tax benefits in the tax provision.

The Company files income tax returns in the U.S. federal jurisdiction and various states. Because of closure of an Internal Revenue Service examination, the Company is no longer subject to U.S. federal income tax examinations for years before 2007 and, generally, is no longer subject to state and local income tax examinations by tax authorities for years before 2005.

10. EMPLOYEE COMPENSATION PLANS

Employee Benefit Plan Payable— The Company sponsors a 401(k) plan for its University employees, which provides for a discretionary match, net of forfeitures, of up to 5%. The University uses certain consistently applied operating ratios to determine contributions. The University’s contributions were $447, $364 and $207 for the years ended May 31, 2010, 2009, and 2008, respectively.

Compensation Plans— The Company had entered into an employment agreement dated January 3, 2005, as amended, with Robert Buckingham, an executive officer of the Company. The agreement required, among other things, an annual incentive payment of 10% of the Company’s annual income as defined in the agreement, which was paid out annually. For the years ended May 31, 2010, 2009 and 2008, the Company recorded $793, $709 and $193, respectively, as an expense in selling, general, and administrative expenses in the accompanying consolidated statements of operations. Furthermore, the agreement provided for a deferred compensation payment payable upon retirement or death equal to one year’s salary.

On March 19, 2010, the Company entered into a Termination of Employment Agreement and Release Agreement (the “Termination Agreement”). Under the Termination Agreement, the parties terminated the Employment Agreement, which contained the terms and conditions of Mr. Buckingham’s employment with the Company as an executive officer of the Company, and which was filed as an exhibit to the Company’s Current Report on Form 8-K on November 30, 2009. Accrued incentive payments and accrued deferred compensation totaled $821 and $153 at May 31, 2009 and $286 and $142 at May 31, 2008, respectively.

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The Company has also entered into employment agreements with Dr. Ronald Shape, Chief Executive Officer and Chief Financial Officer, and Dr. Jerry Gallentine, President, that require, among other things, an annual incentive payment, as defined in the agreements. The incentive payments are paid in installments each year, are recorded in selling, general and administrative expenses and accrued other liabilities in the accompanying consolidated financial statements, and total $749, $338 and $19 for 2010, 2009 and 2008, respectively.

11. STOCKHOLDERS’ EQUITY

The authorized capital stock for the Company is 51,000,000, consisting of (i) 50,000,000 shares of Common Stock, par value $0.0001 and (ii) 1,000,000 shares of Preferred Stock, par value $0.0001. Authorized Class A Common Stock of 100,000 shares, par value $0.0001, were converted to Common Stock during the year ended May 31, 2010 at a rate of 157.3 shares of Common Stock for each share of Class A Common Stock.

Of the authorized shares, 21,819,653 shares of Common Stock were issued and outstanding as of May 31, 2010. No shares of Preferred Stock were outstanding.

The Common Stock outstanding includes 15,730,000 shares of Common Stock converted from Class A Common Stock. Also included are 250,000 shares of restricted Common Stock issued to the former Dlorah stockholders, and the 575,000 shares of restricted Common Stock issued to Camden Learning LLC, in connection with the Transaction. The restriction lapsed on March 23, 2010, when the Company’s Common Stock traded at or above $8.00 for 60 consecutive days. The Common Stock outstanding also includes 246,048 shares of restricted Common Stock issued to our management and directors, 221,048 of which were granted under the Company’s 2009 Stock Option and Compensation Plan (the “Plan”), and 25,000 shares of restricted Common Stock granted to the Company’s Chief Executive Officer outside of the Plan. The remaining 5,018,605 shares of Common Stock that were issued and outstanding as of May 31, 2010 were issued and outstanding as of the closing of the Transaction.

Also, in connection with the Transaction, the former Dlorah stockholders were issued, in the aggregate, warrants to purchase up to 2,800,000 shares of Common Stock at $5.50 per share that will expire if not converted by November 23, 2011. These warrants contain a cashless exercise feature. These warrants remained outstanding and have not been exercised as of May 31, 2010.

The Company also granted restricted stock awards in November 2009, December 2009, and March 2010 to promote the long-term interests of the Company and its stockholders by using such awards as a means for attracting and retaining directors and key employees. The fair value of restricted stock awards were calculated using the Company’s stock price as of the associated grant date and accrued ratably as compensation expense over the vesting period of the award. The amounts recognized in compensation expense were $1,507 for the year ended May 31, 2010. Federal and state payroll taxes totaling $600 related to these awards were also included in compensation expense for 2010. As of May 31, 2010 there was $807 of total unrecognized compensation cost related to the restricted stock awards discussed above that will be recognized over a period extending to May 31, 2012.

On March 19, 2010, the Company issued to the Company’s Chief Executive Officer and Chief Financial Officer, 50,000 shares of restricted Common Stock under the Plan and an additional 25,000 shares of restricted Common Stock pursuant to a Restricted Stock Award Agreement dated March 19, 2009. These shares, which vest over a three-year period if certain performance criteria are satisfied, were issued in connection with the forfeiture of 75,000 shares of restricted Common Stock previously granted to one individual under the Plan on November 30, 2009.

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On March 19, 2010, the Company issued to the Company’s President, 12,500 shares of restricted Common Stock under the Plan. These shares, which vest over a three-year period if certain performance criteria are satisfied, were issued in connection with the forfeiture of 12,500 shares of restricted Common Stock previously granted to this individual under the Plan on November 30, 2009.

Restricted Share Awards

The following table summarizes restricted share award activity under all plans:

				Weighted
				Average
				Grant Date
Restricted Shares Outstanding	Shares			Fair Value
Balance, June 1, 2009		0		$	—
Granted		308,548			8.95
Vested		(110,715	)		10.22
Forfeited		(87,500	)		7.75
Balance, May 31, 2010		110,333		$	8.64

Dividends

The holders of Class A Common Stock were entitled to a quarterly dividend equal to $0.11 per quarter (for a total of $0.44 per year) per share of the Common Stock into which such Class A Common Stock was convertible, paid when and if declared by the Board of Directors for 8 installments in accordance with the merger agreement for the Transaction. If a dividend is paid on the Class A Common Stock, a dividend equal to one-fourth of the per share amount of any Class A Common Stock dividend paid also had to be paid to holders of Common Stock. A dividend totaling $1,896 was declared on November 30, 2009, and $1,868 was paid in January and February 2010. A dividend totaling $1,896 was declared on January 27, 2010 and $1,868 was paid in March 2010. On May 10, 2010, the Company issued a press release to announce that on April 26, 2010, its Board of Directors declared, subject to the satisfaction of the condition set forth below, a one-time special cash dividend in the amount of $0.1609694 per share on each share of the Company’s Common Stock and in the amount of $0.6438774 per share on each share of the Company’s Common Stock issuable upon conversion of the Class A Common Stock, in each case all shares outstanding and of record as of the close of business on May 20, 2010. This special dividend totaled $11,116 of which $11,108 was paid on June 4, 2010 with the difference related to the restricted shares which will be payable once the restrictions lapse. Therefore, all 8 installments of the dividends in accordance with the merger agreement for the Transaction have been declared and paid.

12. COMMITMENTS AND CONTINGENCIES

From time to time, the Company is a party to various claims, proceedings, or lawsuits relating to the conduct of its business. Although the outcome of litigation cannot be predicted with certainty and some lawsuits, claims, or proceedings may be disposed of unfavorably to the Company, management believes, based on facts presently known, that the outcome of such legal proceedings and claims will not have a material adverse effect on the Company’s consolidated financial position, cash flows or future results of operations.

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The Company is subject to extensive regulation by federal and state governmental agencies and accrediting bodies. On an ongoing basis, the Company evaluates the results of internal compliance monitoring activities and those of applicable regulatory agencies and, when appropriate, records liabilities to provide for the estimated costs of any necessary remediation. There are no current outstanding regulatory actions, but the Company cannot predict the outcome of future program reviews and any unfavorable outcomes could have a material adverse effect on the results of the Company’s results of operations, cash flows, and financial position.

13. SELF-INSURED HEALTH INSURANCE

The Company maintains a self-insured health insurance plan for employees. Under this plan, the Company pays a monthly fee to their administrator, as well as claims submitted by their participants. As there generally is a lag between the time a claim is incurred by a participant and the time the claim is submitted, the Company has recorded a liability for outstanding claims of approximately $311 and $422 at May 31, 2010 and 2009, respectively. Such liability is reported with accrued liabilities in the accompanying consolidated balance sheets. At May 31, 2010, the Company’s maximum aggregate risk was approximately $2,282. The maximum specific risk per participant is $50 per year, although total risk for all participants will not exceed the noted maximum aggregate risk for the year.

14. RELATED-PARTY TRANSACTIONS

The Company is required under 34 CFR668.23(d) to disclose all related-party transactions (as defined within the regulation) regardless of materiality to the consolidated financial statements. As described in Note 6, certain notes payable were personally guaranteed by a stockholder of the Company and notes payable were due to stockholders and related parties at May 31, 2010 and 2009, of $0 and $1,147, respectively. In addition, rent totaling $1.0 per month was paid to related parties for home office space under month-to-month leases in 2009 and 2008, and $0.5 per month was paid in 2010. All other related-party transactions were intercompany amounts that are eliminated in consolidation.

15. CONDOMINIUM PROJECT

During 2008, the Company broke ground on a new building designed to contain 24 condominium units to be sold to the general public. The project was funded by a construction line of credit and was completed in 2009. These condominium units are accounted for within condominium inventories within the consolidated balance sheets, and the sales of the condominium units are recorded within condominium sales within the consolidated statements of operations. Seven units have been sold as of May 31, 2010.

In addition, five units of an existing 48-unit apartment building have been sold as condominiums, with the remaining units available for sale or lease. These condominium units are accounted for within net property and equipment within the consolidated balance sheets, and the sales of the condominium units are recorded within other income — net within the consolidated statements of operations.

16. FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Following is a description of each category in the fair value hierarchy and the financial assets and liabilities of the Company that are included in each category at May 31, 2010 and 2009:

Level 1— Quoted prices in active markets for identical assets or liabilities. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted market prices.

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Level 2 —Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The type of assets and liabilities included in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using observable inputs.

Level 3 —Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The type of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation. The Company does not have any Level 3 assets or liabilities.

In accordance with the fair value hierarchy, the following table shows the fair value as of May 31, 2010 and 2009, of those financial assets that are measured at fair value on a recurring basis, according to the valuation techniques the Company used to determine their fair market value. No other financial assets or liabilities are measured at fair value on a recurring or nonrecurring basis at May 31, 2010 or 2009.

	Quoted
	Prices in		Other
	Active		Observable
	Markets		Inputs		Unobservable
	(Level 1)		(Level 2)		Inputs (Level 3)		Fair Value
May 31, 2010
Investments
Cd’s and money market accounts	$	1,547	$	411	$	—	$	1,958
US treasury bills and notes		10,456		—		—		10,456
Total assets at fair value	$	12,003	$	411	$	—	$	12,414
May 31, 2009
Investments
Cd’s and money market accounts	$	1,816	$	231	$	—	$	2,047
US treasury bills and notes		2,483		—		—		2,483
Total assets at fair value	$	4,299	$	231	$	—	$	4,530

17. COMPLETED MERGER

In August 2009, the Company, then known as Camden Learning Corporation, and Dlorah entered into an Agreement and Plan of Reorganization, under which the Company agreed to purchase all of the ownership interests in Dlorah for cash and stock.

In connection with the approval of the Transaction, the Company’s stockholders adopted an amendment to its amended and restated articles of incorporation (i) to change the Company’s corporate name to “National American University Holdings, Inc.”, (ii) to create a new class of common stock to be designated as Class A Common Stock, par value $0.0001 per share (the “Class A Stock”), (iii) to increase the Company’s authorized capital stock from 21,000,000 shares consisting of 20,000,000 shares of common stock, par value $0.0001 per share (the “Common Stock”), and 1,000,000 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”), to 51,100,000 shares, consisting of 50,000,000 shares of Common Stock, 100,000 shares of Class A Stock, and 1,000,000 shares of Preferred Stock, and (iv) to remove the provisions related to the Company’s status as a blank check company, including, among other things, the classification of the board of directors, and to make the Company’s corporate existence perpetual. Furthermore, the Company’s stockholders adopted the 2009 Stock Option and Compensation Plan (the “Incentive Plan”) pursuant to which the Company reserved 1,300,000 shares of Common Stock for issuance pursuant to the Incentive Plan.

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The Transaction closed on November 23, 2009, and on that date, Dlorah became a wholly owned subsidiary of the Company. The stockholders of Dlorah received shares and warrants representing approximately 77% of the Company’s issued capital shares. The Transaction was accounted for as a reverse merger accompanied by a recapitalization of the Company. Under this accounting method, Dlorah was considered the acquirer for accounting purposes because it obtained effective control of the Company as a result of the acquisition. This determination was primarily based on the following facts: Dlorah’s retention of a significant voting interest in the Company; Dlorah’s appointment of a majority of the members of the Company’s initial board of directors; Dlorah’s operations comprising the ongoing operations of the Company; and Dlorah’s senior management serving as the senior management of the Company. Under this method of accounting, the recognition and measurement provisions of the accounting guidance for business combinations do not apply and therefore, the Company did not recognize goodwill or other intangible assets. Instead, the Transaction has been treated as the equivalent of Dlorah issuing stock for the net monetary assets of the Company, primarily cash, which are stated at their carrying value. Because of the reverse merger, the historical results represent those of Dlorah.

At the time of the Transaction, all the issued and outstanding equity interests of Dlorah were automatically converted into the right to receive (i) 100,000 shares of Class A Stock, automatically convertible after two years (or earlier if elected by the stockholders, which was done in the fourth quarter of fiscal year 2010) into 15,730,000 shares of the Common Stock at a ratio of 157.3 shares of Common Stock for every one share of Class A Stock, (ii) 2,800,000 newly issued common stock purchase warrants (the “Warrants”) at a purchase price of $5.50 per share, and (iii) 250,000 shares of Restricted Common Stock that are not freely tradable until such time as the Common Stock trades at or above $8.00 per share for any 60 consecutive trading day period, provided that such shares shall be forfeited on the fifth anniversary of the date of issuance if such restriction has not been satisfied by then. This restriction lapsed on March 23, 2010.

Additionally, the Company has entered into an employment agreement with its chairman of the board of directors through December 2011, which was later terminated (see Note 10).

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18. SEGMENT REPORTING

Operating segments are defined as business areas or lines of an enterprise about which financial information is available and evaluated on a regular basis by the chief operating decision makers, or decision-making groups, in deciding how to allocate capital and other resources to such lines of business.

The Company operates two operating and reportable segments: National American University (NAU) and other. The NAU segment contains the revenues and expenses associated with the university operations and the allocated portion of corporate overhead. The other segment contains everything else. These operating segments are divisions of the Company for which separate financial information is available and evaluated regularly by executive management in deciding how to allocate resources and in assessing performance.

General administrative costs of the Company are allocated to specific divisions of the Company.

The majority of the Company’s revenue is derived from the NAU division, which provides undergraduate and graduate education programs. NAU derives its revenue primarily from student tuition. The other division operates multiple apartment and condominium complexes and derives its revenues primarily from condominium sales and rental income (in thousands).

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	2010									2009
							Consolidated									Consolidated
	NAU			Other			Total			NAU			Other			Total
Revenue:
Academic revenue	$	82,418		$	0		$	82,418		$	56,874		$	0		$	56,874
Auxiliary revenue		5,528			0			5,528			4,036			0			4,036
Rental income — apartments		0			918			918			0			890			890
Condominium sales		0			932			932			0			784			784
Total revenue		87,946			1,850			89,796			60,910			1,674			62,584
Operating expenses:
Costs of educational services(1)		20,419			0			20,419			17,398			0			17,398
Selling, general and administrative(1)		48,238			1,648			49,886			36,349			1,277			37,626
Auxiliary expense		2,076			0			2,076			1,595			0			1,595
Cost of condominium sales		0			761			761			0			558			558
Loss of disposition of property		29			0			29			3						3
Total operating expenses		70,762			2,409			73,171			55,345			1,835			57,180
Income (loss) from operations		17,184			(559	)		16,625			5,565			(161	)		5,404
Other income (expense):
Interest income		200			6			206			242			0			242
Interest expense(2)		(125	)		(400	)		(525	)		(375	)		(459	)		(834	)
Other income — net		0			218			218			0			93			93
Total other expense		75			(176	)		(101	)		(133	)		(366	)		(499	)
Income (loss) before taxes	$	17,259		$	(735	)	$	16,524		$	5,432		$	(527	)	$	4,905
Total assets	$	33,085		$	14,201		$	47,286		$	20,620		$	8,245		$	28,865
Expenditures for long-lived assets(3)	$	3,385		$	1,286		$	4,671		$	764		$	503		$	1,267
Depreciation and amortization	$	1,811		$	509		$	2,320		$	1,830		$	335		$	2,165

(1)	As discussed in Note 2, $4,582 and $4,259 of rent expense have been reclassified from selling, general, and administrative to cost of educational services to conform to the current presentation. A portion of these amounts were previously allocated to the Other segment in error. As such, the amounts for 2009 and 2008 have been restated to properly reflect the entire balance within the NAU segment.
(2)	An error in the allocation of $62 of interest expense to the NAU operating segment has been corrected to present the interest expense in the Other operating segment.
(3)	The amount for 2009 and 2008 was restated to reflect actual cash paid rather than captial additions, as was previously presented in prior period financial statements.

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	2008
							Consolidated
	NAU			Other			Total
Revenue:
Academic revenue	$	44,218		$	0		$	44,218
Auxiliary revenue		4,062			0			4,062
Rental income — apartments		0			782			782
Condominium sales		0			395			395
Total revenue		48,280			1,177			49,457
Operating expenses:
Costs of educational services(1)		15,130			0			15,130
Selling, general and administrative(1)		30,857			1,785			32,642
Auxiliary expense		1,523			0			1,523
Cost of condominium sales		0			122			122
Loss of disposition of property		5			0			5
Total operating expenses		47,515			1,907			49,422
Income (loss) from operations		765			(730	)		35
Other income (expense):
Interest income		282			0			282
Interest expense(2)		(762	)		(261	)		(1,023	)
Other income — net		1			91			92
Total other expense		(479	)		(170	)		(649	)
Income (loss) before taxes	$	286		$	(900	)	$	(614	)
Total assets
Expenditures for long-lived assets(3)	$	3,202		$	4,188		$	7,390
Depreciation and amortization	$	1,783		$	331		$	2,114

(1)	As discussed in Note 2, $4,582 and $4,259 of rent expense have been reclassified from selling, general, and administrative to cost of educational services to conform to the current presentation. A portion of these amounts were previously allocated to the Other segment in error. As such, the amounts for 2009 and 2008 have been restated to properly reflect the entire balance within the NAU segment.
(2)	An error in the allocation of $84 of interest expense to the NAU operating segment has been corrected to present the interest expense in the Other operating segment.
(3)	The amount for 2009 and 2008 was restated to reflect actual cash paid rather than captial additions, as was previously presented in prior period financial statements.

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19. SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following table sets forth selected unaudited quarterly financial information for the last eight quarters:

	Quarter
	First			Second		Third		Fourth
Fiscal Year Ended May 31, 2009
Revenues	$	12,117		$	15,593	$	16,517	$	18,357
Income from operations	$	(533	)	$	2,165	$	1,848	$	1,924
Net income (loss)		(318	)		1,274		1,057		1,095
Net income (loss) attributable to NAUH and Subs		(378	)		1,302		1,081		1,116
Net income per share (common):
Basic — undistributed		n/a			n/a		n/a		n/a
Diluted — undistributed		n/a			n/a		n/a		n/a

	Quarter
	First		Second		Third		Fourth
Fiscal Year Ended May 31, 2010
Revenues	$	17,264	$	23,437	$	23,610	$	25,485
Income from operations	$	2,252	$	6,299	$	4,743	$	3,331
Net income		1,250		3,697		3,002		2,090
Net income attributable to NAUH and Subs		1,259		3,704		2,972		2,100
Net income per share (common):
Basic — undistributed		n/a		0.11		0.05		0.42
Diluted — undistributed		n/a		0.10		0.05		0.42

The EPS data for the fiscal year ended May 31, 2009 and the first quarter ended August 31, 2009 is not applicable as the Company was not a public company and the Company’s earnings were only attributable to Class A shareholders.

Subsequent to the filing of the Form 10-Q for the quarter ended February 28, 2010, the Company identified errors in the calculation of undistributed earnings per share — Class A, basic and dilutive; distributed earnings per share — Common, basic and dilutive; and weighted average shares outstanding — Common, basic and dilutive for the three and nine months periods ended February 28, 2010.

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The effect of the correction on previously reported earnings per share and related weighted average shares outstanding are summarized in the following table.

	Three Months Ended				Nine Months Ended
	February 28, 2010				February 28, 2010
	As reported		As corrected		As reported		As corrected
Basic EPS
Class A
Distributed earnings	$	17.30		17.30	$	34.61		34.61
Undistributed earnings	$	8.08		8.16	$	37.03		37.17
Total	$	25.38	$	25.46	$	71.64	$	71.78
Common
Distributed earnings	$	0.03		0.03	$	0.15		0.06
Undistributed earnings	$	0.05		0.05	$	0.24		0.24
Total	$	0.08	$	0.08	$	0.39	$	0.30
Diluted EPS
Class A
Distributed earnings	$	17.30	$	17.30	$	34.61	$	34.61
Undistributed earnings	$	7.59	$	7.66	$	36.03	$	36.19
Total	$	24.89	$	24.96	$	70.64	$	70.80
Common
Distributed earnings	$	0.02	$	0.03	$	0.12	$	0.06
Undistributed earnings	$	0.05	$	0.05	$	0.23	$	0.23
Total	$	0.07	$	0.08	$	0.35	$	0.29
Weighted Average Shares outstanding
Basic EPS
Class A		100,000		100,000		100,000		100,000
Common		5,206,105		5,018,605		1,868,858		1,801,551
Diluted EPS
Class A		100,000		100,000		100,000		100,000
Common		6,557,798		6,370,298		2,354,081		2,276,277

20. SUBSEQUENT EVENTS

On March 23, 2010, the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission for the offer and sale of up to 7,000,000 shares of its Common Stock (1/2 coming from selling stockholders). This sale of 7 million shares closed on June 1, 2010. Also, pursuant to an option granted by the Company, the underwriters purchased an additional 1,050,000 shares of Common Stock to cover over-allotments. The Company received $32,077 in June 2010 which was net of the underwriters discount. The Company then paid the costs associated with this registration which included the special dividend of $11,116 and other expenses estimated at $1,500. The Company did not receive any proceeds from the sale of the shares by the selling stockholders. The remainder of the proceeds is for growth initiatives (including academic programs, services for students and faculty and expansion of educational sites) and general corporate purposes.

An additional condo unit in Vista Park was sold in August 2010.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)(1) Financial Statements

All required financial statements of the registrant are set forth under Item 8 of this annual report on Form 10-K.

(a)(2) Financial Statement Schedule

The financial statement schedules of the registrant are not required.

(b) Exhibits

Exhibit No.		Description
	31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-15(e) and 15d-15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-15(e) and 15d-15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the 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 the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

National American University Holdings, Inc.
By:	/s/ Ronald L. Shape
	Name:	Ronald L. Shape, Ed. D.
	Title:	Chief Executive Officer and Chief Financial Officer (principal executive officer, principal financial officer and principal accounting officer)

Dated as of September 23, 2010.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of September 23, 2010.

Name	Title
/s/ Robert D. BuckinghamRobert D. Buckingham	Chairman of the Board of Directors
/s/ Jerry L. GallentineJerry L. Gallentine, Ph.D.	President and Director
/s/ Therese CraneTherese Crane, Ed.D.	Director
/s/ R. John ReynoldsR. John Reynolds, Ph.D.	Director
/s/ Thomas D. SabanThomas D. Saban, Ph.D.	Director
/s/ David L. WarnockDavid L. Warnock	Director
H. Edward Yelick	Director

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