AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 30, 1996
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________________
JONES EDUCATION NETWORKS, INC.
(Exact name of registrant as specified in its charter)

COLORADO 8299 84-1150623

(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)

9697 EAST MINERAL AVENUE
ENGLEWOOD, COLORADO 80112
(303) 792-3111
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive office)

ELIZABETH M. STEELE, VICE PRESIDENT AND SECRETARY
9697 EAST MINERAL AVENUE
ENGLEWOOD, COLORADO 80112
(303) 792-3111
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
___________________________
Copies to:
PAUL HILTON, ESQ. DAN BUSBEE, ESQ.
J. JUSTYN SIRKIN, ESQ. HENRY EXALL IV, ESQ.
N. ANTHONY JEFFRIES, ESQ. LOCKE PURNELL RAIN HARRELL
DAVIS, GRAHAM & STUBBS LLP (A PROFESSIONAL CORPORATION)
370 SEVENTEENTH STREET, SUITE 4700 2200 ROSS AVENUE, SUITE 2200
DENVER, COLORADO 80202 DALLAS, TEXAS 75201-6776
(303) 892-9400 (214) 740-8000
___________________________

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
___________________________

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
___________________________
CALCULATION OF REGISTRATION FEE

================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED/(1)/ PER SHARE/(2)/ OFFERING PRICE/(2)/ FEE
- --------------------------------------------------------------------------------------------------------------------------------

Class A Common Stock, par value $.01 7,935,000 shares $16.00 $126,960,000 $43,780
per share...........................
================================================================================================================================

(1) Includes 1,035,000 shares that the Underwriters have the option to purchase
from the Company and certain Selling Shareholders to cover over-allotments,
if any.
(2) Estimated solely for the purpose of calculating the registration fee.
___________________________

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

================================================================================

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any State.

SUBJECT TO COMPLETION, DATED AUGUST 30, 1996

6,900,000 SHARES

JONES EDUCATION NETWORKS, INC.

CLASS A COMMON STOCK

Of the 6,900,000 shares of Class A Common Stock offered hereby (the
"Offering"), 5,800,000 shares are being sold by Jones Education Networks, Inc.
(the "Company"), and 1,100,000 shares are being sold by certain shareholders of
the Company (the "Selling Shareholders"). See "Principal and Selling
Shareholders." The Company will not receive any of the proceeds from the sale
of shares by the Selling Shareholders.

Holders of Class A Common Stock are entitled to 1/10th of a vote per share
and holders of Class B Common Stock are entitled to one vote per share on all
matters submitted to a vote of shareholders. Both classes vote together as a
single class on all matters except (i) the holders of Class A Common Stock,
voting separately as a class, are entitled to elect approximately 25% of the
Company's directors, with the remainder of the directors being elected by the
holders of Class B Common Stock, voting separately as a class, and (ii) the
approval of two-thirds of each class, voting separately, is required for certain
extraordinary corporate actions. See "Description of Capital Stock."
Immediately following the Offering and on a fully-diluted basis (assuming no
exercise of the Underwriters' over-allotment option), the holders of Class B
Common Stock will have approximately 69% of the combined voting power of the
Company's outstanding Common Stock. See "Principal and Selling Shareholders"
and "Risk Factors -- Voting Rights; Control by Principal Shareholders; Anti-
Takeover Effects."

Prior to this Offering, there has been no public market for the Class A
Common Stock of the Company. It is anticipated that the initial public offering
price of the Class A Common Stock will be between $ and $ per
share. See "Underwriting" for a discussion of the factors considered in
determining the initial public offering price. The Class A Common Stock has
been approved for quotation on the Nasdaq National Market under the symbol
"JENI."

SEE "RISK FACTORS" COMMENCING ON PAGE 8 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE CLASS A COMMON STOCK
OFFERED HEREBY.
___________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

================================================================================================================================
Proceeds
Price to Underwriting Proceeds to to Selling
Public Discount (1) Company (2) Shareholders
- --------------------------------------------------------------------------------------------------------------------------------

Per Share ................. $ $ $ $
Total (3).................. $ $ $ $
================================================================================================================================

(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other matters, including the Company's agreement to grant a
warrant to purchase shares of the Class A Common Stock to M. Kane & Company,
Inc. in consideration of certain financial advisory services provided to the
Company.
(2) Before deducting expenses payable by the Company estimated at $550,000 and
approximately $2.0 million payable to M. Kane & Company, Inc. in
consideration of certain financial advisory services provided to the
Company. See "Underwriting."
(3) The Company and the Selling Shareholders have granted to the Underwriters a
30-day option to purchase up to 1,035,000 additional shares of Class A
Common Stock solely to cover over-allotments, if any. If the Underwriters
exercise this option in full, the Price to Public will total $ ,
the Underwriting Discount will total $ , the Proceeds to Company
will total $ and the Proceeds to Selling Shareholders will total $
. See "Principal and Selling Shareholders" and "Underwriting."

The shares of Class A Common Stock are offered by the several Underwriters
named herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that delivery
of the certificates representing such shares will be made against payment
therefor at the office of Montgomery Securities on or about ,
1996.

___________________________

MONTGOMERY SECURITIES
PIPER JAFFRAY INC.
M. KANE & COMPANY, INC.
, 1996

[ART WORK TO COME]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A COMMON
STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by and should be read in
conjunction with the more detailed information and Consolidated Financial
Statements and Notes thereto appearing elsewhere in this Prospectus. Unless the
context requires otherwise, references to the Company herein include Jones
Education Networks, Inc. and its subsidiaries and references to Common Stock
herein refer collectively to the Class A Common Stock and Class B Common Stock.
Unless otherwise indicated, all information in this Prospectus assumes that the
Underwriters' overallotment option has not been exercised and reflects a 285-
for-one stock split of the Class A Common Stock and Class B Common Stock to be
effected immediately prior to the consummation of the Offering. Investors
should consider carefully the information set forth under the heading "Risk
Factors."

THE COMPANY

The Company offers a variety of integrated educational programming,
products and services through multiple distribution channels designed to serve
the learning needs of adults. Targeting adults who seek information that is of
practical use in their day-to-day lives, the Company licenses, develops and
produces knowledge-enhancing programs and distributes these programs primarily
on its two television networks, ME/U Knowledge TV and Jones Computer Network.
For adults who desire more in-depth information or post-secondary degrees or
certificates, the Company works in conjunction with select universities and
colleges to offer degree and certificate courses through multiple forms of
media, including videotapes, television, print materials, the Internet and other
interactive multimedia. The Company also offers a broad selection of
educational video and software products that complement its programming and
course offerings. The Company's programming, products and services concentrate
primarily on four high-demand subject areas: (i) computers and technology, (ii)
business, careers and finance, (iii) health and wellness and (iv) global culture
and languages.

By integrating and cross-promoting its networks, degree and certificate
programs and other learning products, the Company encourages its viewers,
students and other customers to utilize these products and services. The
Company's networks generate revenue through license fees paid by program
distributors and through the sale of advertising time. The networks'
programming is intended to reach an audience that has demographics attractive to
advertisers and that is receptive to the Company's education products and
services. The Company also generates revenue from tuition fees, student fees
and the sale of education-oriented products, particularly training videos and
programs. The Company believes that its distance education business is
differentiated from others because it is highly integrated and it derives
revenue from multiple sources.

The Company's network programs are designed to provide adults with
practical information that can be applied immediately in their personal and
professional lives and are distributed on the Company's two 24-hours a day,
satellite-delivered networks, ME/U Knowledge TV and Jones Computer Network.
ME/U Knowledge TV, launched in 1987, features programs in each of the Company's
four high-demand subject areas and is currently available to approximately 24.5
million households in the United States. Jones Computer Network, launched in
1994, offers programming focused primarily on computers and technology and is
currently available to approximately 1.2 million households in the United
States.

The Company's degree and certificate courses target adults who desire in-
depth, post-secondary education, but who are constrained by the time and
location inconveniences associated with enrollment in programs using the
traditional educational model. Working in conjunction with

universities and colleges, the Company offers distance education degree and
certificate courses that are delivered directly to adults through multiple forms
of media, including videotape, television, print materials, the Internet and
other interactive multimedia. The Company currently offers 170 course selections
and 17 degree and certificate programs through 11 accredited universities and
colleges, including The George Washington University, Regis University,
California State University at Dominguez Hills and the University of Colorado-
Colorado Springs, as well as through International University College, an
affiliate of the Company currently seeking accreditation. The Company seeks to
distinguish its distance education programs from those of others by offering
students (i) a variety of accredited universities and colleges from which they
can choose to earn a degree or certificate, (ii) a greater selection of degree
and certificate programs, (iii) greater flexibility in the scheduling and
delivery methods for its courses and (iv) increased frequency in the delivery of
its courses. The Company also provides a range of support services for its
distance education degree and certificate courses through its Education Services
Center and offers a broad selection of educational videotapes, audiotapes,
books, compact disks and other learning tools through its ME/U Knowledge Store.

The Company believes that rapidly evolving changes in society, the
workplace and technology are leading adults increasingly to seek new educational
opportunities offered in a more convenient fashion than traditional site-based
education programs. The Company believes that many adults seek practical
education through television programming that contains substantial knowledge and
training content. The Company further believes that advertisers and programming
distributors have responded positively to the popularity of such programming.
Based on recent industry data, the Company believes that advertisers spent
approximately $780 million, net of agency commissions, in 1995 on 10 networks
airing information-based programming, representing an increase of approximately
144% from such advertising expenditures in 1990. In addition, the Company
estimates that license fees paid by cable operators to these networks were
approximately $600 million in 1995. The Company believes that its programming
is education-oriented and therefore appeals to a smaller audience than these
information-based networks. There can be no assurance that the Company's
advertising or license fee revenue will grow in the future. See "Business --
The Market for Adult Education Programming and Credit Courses." In addition, the
Company believes a substantial number of adults are seeking more in-depth
education through formal credit and degree courses. In 1993, the most recent
year for which information is available, the U.S Department of Education
estimated that adults over 24 years of age comprised approximately 6.3 million,
or 44%, of the 14.3 million students enrolled in higher education programs. The
Company believes that it is positioned to compete effectively in these markets
due to its unique combination of experience, resources, depth of course
offerings, breadth of delivery modes and integrated sales and marketing
capabilities.

The Company seeks to strengthen and expand its position as a provider of
knowledge-enhancing programming and distance education products and services to
adults. The Company's strategy is (i) to expand the distribution of its
networks, (ii) to license, develop and produce high quality programming for both
its networks and degree and certificate courses, (iii) to increase its marketing
and promotion activities, (iv) to increase its student enrollments, (v) to
develop corporate relationships (vi) to expand further into international
markets and (vii) to pursue strategic acquisitions. By pursuing these
strategies, the Company hopes to expand its subscriber base, make its networks
more attractive to both viewers and advertisers, increase the brand awareness
and usage of both its networks and its distance education programs and expand
further into international markets.

The Company was incorporated in 1990 in Colorado. The Company's corporate
offices are located at 9697 East Mineral Avenue, Englewood, Colorado 80112, and
its telephone number is (303) 792-3111.

THE OFFERING

Class A Common Stock offered by:
The Company................... 5,800,000 shares
The Selling Shareholders...... 1,100,000 shares
---------
Total....................... 6,900,000 shares
=========

Common Stock to be outstanding
after the Offering:
Class A Common Stock.......... 9,492,175 shares
Class B Common Stock.......... 2,089,620 shares
---------
Total 11,581,795 shares(1)
==========

Use of proceeds................ The Company intends to use the net proceeds
from the Offering as follows: (i)
approximately $23.0 million to increase
marketing activities relating to the Company's
networks and its education products and
services through 1997; (ii) approximately
$21.0 million to license, develop and produce
additional programming for its networks and
its degree and certificate course offerings
through 1997; and (iii) approximately $1.4
million to repay a long-term advance from
Jones International, Ltd. ("Jones
International"). The Company intends to use
the remaining $33.0 million to fund future
operating losses, for marketing and
programming expenses after 1997, and for
general corporate purposes, including
potential strategic investments or
acquisitions. The Company will not receive
any of the proceeds from the sale of shares by
the Selling Shareholders. See "Use of
Proceeds."

Voting rights.................. Holders of Class A Common Stock are entitled
to 1/10th of a vote per share and holders of
Class B Common Stock are entitled to one vote
per share on all matters submitted to a vote
of shareholders. Both classes vote together
as a single class on all matters not requiring
a class vote. The holders of Class A Common
Stock, voting separately as a class, are
entitled to elect approximately 25% of the
Company's directors, with the remainder of the
directors being elected by the holders of
Class B Common Stock, voting separately as a
class. The approval of two-thirds of each
class of Common Stock, voting separately, is
required for certain extraordinary corporate
actions. See "Description of Capital Stock."
Immediately following the Offering and on a
fully-diluted

basis, the holders of the Class B Common Stock
(Glenn R. Jones and Jones International) will
have approximately 69% of the combined voting
power of the Company's outstanding Common
Stock. See "Principal and Selling
Shareholders" and "Risk Factors -- Voting
Rights; Control by Principal Shareholders;
Anti-Takeover Effects."

Nasdaq National Market symbol.. JENI
__________________________

(1) Excludes (i) 1,100,000 shares of Class A Common Stock reserved for issuance
pursuant to the Company's Stock Option Plan, none of which were subject to
outstanding options as of August 30, 1996, and (ii) 28,750 shares (33,063
shares if the Underwriters' over-allotment option is exercised in full) of
Class A Common Stock issuable under a warrant the Company has agreed to
grant to M. Kane & Company, Inc. with an exercise price equal to $18.00 per
share (assuming an offering price of $15.00 per share). The Company
anticipates granting stock options to certain of its officers and employees
prior to the completion of this Offering. See "Management -- Stock Option
Plan" and "Underwriting."

SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AND STUDENT AND ENROLLMENT DATA)

SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------------------- --------------------
1993 1994 1995 1995 1996
------- -------- ------- --------- -------

STATEMENT OF OPERATIONS DATA:
Revenues..................................... $ 6,073 $ 9,973 $ 15,911 $ 7,717 $ 10,528
Operating loss............................... (9,985) (10,157) (12,233) (7,685) (2,170)
Loss before income tax benefit and minority
interests................................. (10,061) (12,755) (13,290) (8,459) (2,287)
Net loss..................................... (9,653) (10,954) (13,290) (8,459) (2,105)
Net loss per common share.................... (2.31) (2.61) (2.40) (1.60) (0.36)
Weighted average number of common shares
outstanding............................... 4,179 4,198 5,527 5,273 5,782

OTHER DATA:
Number of network households................. 25,552 25,558 25,720 27,240 25,676
Number of paying network households.......... 6,800 8,200 11,500 10,900 11,600
Number of enrollments........................ 1,974 2,544 4,674 2,155 2,586
Number of students........................... 1,141 1,185 1,801 1,717 1,970

JUNE 30, 1996
-------------------------------------
ACTUAL AS ADJUSTED(1)
---------------- ------------------

BALANCE SHEET DATA:
Working capital......................................................... $ 5,938 $82,957
Total assets............................................................ 11,088 88,107
Long term debt.......................................................... 1,400 --
Total shareholders' equity.............................................. 6,150 84,569

- -----------------------
(1) Adjusted to give effect to the sale of 5,800,000 shares of Class A Common
Stock offered by the Company hereby, at an assumed offering price of $15.00
per share and after deducting underwriting discounts and commissions and
estimated offering expenses payable by the Company, and the application of
the net proceeds therefrom. See "Use of Proceeds."

RISK FACTORS

An investment in the shares of Class A Common Stock offered hereby involves
a high degree of risk. Prospective purchasers of the Class A Common Stock
should consider carefully the information set forth below, as well as the other
information in this Prospectus, in determining whether to purchase shares of the
Class A Common Stock offered hereby. In addition, certain information included
in this Prospectus is forward-looking. Such forward-looking information
involves significant risks and uncertainties that could cause actual future
results to differ significantly from those expressed in any forward-looking
statements made by, or on behalf of, the Company. These risks and uncertainties
include but are not limited to those discussed below.

HISTORY OF OPERATING AND NET LOSSES; EXPECTED FUTURE LOSSES

The Company has sustained operating and net losses throughout its history,
including operating losses of $10.0 million, $10.2 million, $12.2 million and
$2.2 million and net losses of $9.7 million, $11.0 million, $13.3 million and
$2.1 million for the years ended December 31, 1993, 1994 and 1995, and for the
six months ended June 30, 1996, respectively. The Company also anticipates
incurring increased costs and substantially higher operating losses and net
losses through at least 1998. The Company expects to continue to recognize
substantial operating and net losses for the foreseeable future and there can be
no assurance that the Company will ever generate operating or net income. In
addition, the Company has not generated sufficient cash from operations and has
relied on advances and investments from current shareholders to fund its
operations. These shareholders are under no obligation to provide, nor does the
Company expect such shareholders to provide, additional advances to or make
future investments in the Company. Although the Company believes that the
proceeds of this Offering will be sufficient to satisfy the Company's working
capital and cash flow needs through 1997, there can be no assurance that the
Company will be able to meet its longer term capital requirements. See "--
Capital Requirements," "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

INABILITY TO SUSTAIN OR MANAGE GROWTH

The Company's revenue has grown substantially in recent years primarily as
a result of increased advertising and licensing revenue generated by its two
networks, ME/U Knowledge TV and Jones Computer Network. The Company intends to
pursue an aggressive expansion strategy for the foreseeable future, but there
can be no assurance that the Company will successfully achieve its growth
objectives. The Company's ability to maintain its growth will depend on a
number of factors, many of which are beyond the Company's control, including
maintaining and expanding distribution of ME/U Knowledge TV and Jones Computer
Network, both through multiple system operators of cable television systems
("MSOs"), as well as through alternative distribution systems such as direct
broadcast satellite services ("DBS"), wireless video services ("MMDS") and video
distribution systems being established by various telecommunications companies;
developing and acquiring additional programming for the Company's networks that
is consistent with viewer preferences; attracting additional advertisers that
are willing to pay competitive rates; developing additional course offerings
for, and increasing student enrollment in, its degree and certificate programs;
and penetrating and developing existing and new markets for its television
programming and degree and certificate courses. In addition, the Company is
subject to a variety of business risks generally associated with growing
companies. Future growth and expansion could place significant strain on the
Company's management personnel, some of whom also serve as officers of
affiliates of the Company, and likely will require the Company to recruit
additional management personnel. There

can be no assurance that the Company will be able to manage its expanding
operations effectively, that it will be able to maintain or accelerate its
growth or that such growth, if achieved, will result in profitable operations or
that it will be able to attract and retain sufficient management personnel
necessary for continued growth. The failure to manage such expansion effectively
could have a material adverse effect on the Company's business, financial
condition or results of operations. See "Business -- Growth Strategy" and "--
Dependence upon Key Personnel."

RISKS ASSOCIATED WITH DISTRIBUTION OF PROGRAMMING

The Company's business is dependent upon the distribution of its
programming through MSOs, other video programmers and other media distributors.
In terms of cable distribution, the Company's programming competes for a limited
number of available cable channels with a large number of well-established
programmers supplying a variety of alternative programming, including education,
news, public affairs, entertainment and sports programming. In addition,
channel space is controlled by MSOs, some of which are affiliated with competing
program providers. See "-- Competition." While the Company has entered into
affiliation agreements with five of the ten largest MSOs in the United States,
as well as a number of smaller MSOs, these agreements generally do not guarantee
the distribution of the Company's networks if local cable operators are unable
or unwilling to carry the Company's programming. In addition, affiliation
agreements accounting for approximately 35% of the Company's licensing revenue
for 1995 are terminable upon 30 days notice and affiliation agreements
accounting for approximately 2% and 19% of the Company's licensing revenue for
1995 are scheduled to expire in fiscal 1997 and 1998, respectively. The
termination or non-renewal of certain of the Company's affiliation agreements or
the termination of carriage of the Company's networks by a significant number of
cable systems would have a material adverse effect on the Company's results of
operations. In addition, the Company's expansion plans are dependent, in part,
on the ability of the Company to enter into affiliation agreements with
additional MSOs and other video programming distributors, to renew existing
affiliation agreements with current MSOs when such agreements expire and to
persuade additional local cable operators to carry the Company's programming.
There can be no assurance that the Company will be able to successfully
negotiate affiliation agreements with any current or new MSO or other video
programming distributor or secure additional distribution from or maintain
current distribution with local cable operators. See "-- Competition" and
"Business -- Growth Strategy," and -- Distribution."

DEPENDENCE ON ADVERTISING REVENUE

The Company historically has derived substantial revenue from the sale
of airtime on its networks for long-form advertisements (infomercials) and, to a
lesser extent, short-form advertisements (spot ads). The Company's ability to
increase its advertising revenue is dependent, in part, on its ability to
attract additional advertisers that are willing to pay competitive rates for
airtime. The Company's ability to attract such additional advertisers is
dependent upon its ability to demonstrate that its networks are able to deliver
the type and quantity of television viewers that such advertisers seek which in
turn is dependent upon a number of factors, including, among others, the
Company's ability (i) to expand the distribution of its networks, (ii) to
maintain or increase the number of hours of network programming on the cable
systems on which the Company's networks are carried only part-time, (iii) to
license, develop and produce additional high quality, distinctive programming
that will attract additional viewers and (iv) to increase awareness of its
networks and measure the type and quantity of television viewers tuned to its
networks. The sale of additional advertising on the Company's networks is also
dependent on certain factors that are beyond the Company's control, including,
among others, the amount of funds that advertisers dedicate to

television advertising and, in particular, to networks such as ME/U Knowledge TV
and Jones Computer Network, the number of advertisers who seek audiences within
the demographic group to which the Company's networks deliver programming and
fluctuations affecting the advertising industry resulting from general economic
trends. There can be no assurance that the Company will be able to maintain its
existing advertisers or attract additional advertisers in the future. See
"Business - Advertising."

COMPETITION FOR VIEWERS AND STUDENTS; MARKET ACCEPTANCE

The Company's networks compete for viewers with various cable and broadcast
television programmers supplying a variety of enrichment programming, including,
among others, the Discovery Channel, Arts & Entertainment, the History Channel,
The Learning Channel, CNBC, CNN, MSNBC, Fox News Channel, Home and Garden TV and
the Public Broadcasting Service. Many of these programmers have substantially
greater financial and other resources than the Company. Moreover, the Company
expects to encounter additional competition for viewers as technological
advances, such as the deployment of digital compression technology, the
deployment of fiber optic cable and the "multiplexing" of cable services, allow
cable systems to greatly expand their channel capacity and, as a result, their
ability to add new networks. Historically, demand for educational programming
has not had wide appeal with television audiences and high quality programming
with a substantial educational content has not been widely available. The
Company's ability to compete effectively for viewers is dependent upon, among
other factors, its ability to assess consumer preferences and to develop and
acquire programming that is consistent with these preferences.

With respect to distance education, the Company competes with universities
and colleges, including those that deliver education and training products to
distant locations, and independent education and training companies that package
and distribute programs through various media, including, among others, the
University of Phoenix and Westcott Communications, Inc. While the Company
believes that its integrated approach of offering a variety of products and
services through a combination of technologies is distinctive and that the
convenience of home and desktop delivery will be preferred, there can be no
assurance that adults will find the Company's approach preferable to the
approach of its competitors or that the Company will be able to compete
successfully in the future.

In addition, the Company's success in developing additional quality
educational programming and expanding its audience will depend on its ability to
provide programming that anticipates and responds to the needs and preferences
of adults. There can be no assurance that the Company will be able to license
or develop additional educational programming that will be accepted by its
targeted markets. See "Business -- Competition."

RISKS ASSOCIATED WITH THE DISTANCE EDUCATION MARKET

The market for adult education traditionally has been served through site-
based, live instruction. Although distance education programs have been
available for many years, such programs have low awareness among consumers and
currently account for only a small portion of the overall adult education
market. The Company derived approximately 23% of its revenues in 1995 from the
sale of education products and services. However, there can be no assurance
that the demand for adult distance education will continue at its current level
or increase or that the Company will be able to maintain or increase its current
market share.

VOTING RIGHTS; CONTROL BY PRINCIPAL SHAREHOLDERS; ANTI-TAKEOVER EFFECTS

Holders of Class A Common Stock have limited voting rights. Holders of
Class A Common Stock are entitled to 1/10th of a vote per share, and holders of
Class B Common Stock are entitled to one vote per share, on all matters
submitted to a vote of shareholders. Both classes vote together as a single
class on all matters not requiring a class vote. As long as the Class A Common
Stock constitutes more than 10% of the issued and outstanding shares of Common
Stock, the holders of Class A Common Stock, voting separately as a class, are
entitled to elect approximately 25% of the Company's directors, with the
remainder of the directors being elected by the holders of Class B Common Stock,
voting separately as a class. In addition, the approval of two-thirds of each
class of Common Stock is required for certain extraordinary corporate actions.
See "Description of Capital Stock." Immediately following the Offering and on a
fully-diluted basis (assuming no exercise of the Underwriters' over-allotment
option), (i) the holders of the Class B Common Stock will have approximately 69%
of the combined voting power of the Company's outstanding Common Stock and (ii)
all of the current shareholders of the Company will have approximately 27% of
the voting power of the Class A Common Stock and approximately 77% of the
combined voting power of the Company's outstanding Common Stock. Thus, the
holders of the Class B Common Stock will have the power to control all matters
requiring shareholder approval not involving a class vote and the current
shareholders of the Company will have the power to substantially influence all
matters involving a class vote. In addition, following the completion of this
Offering, Glenn R. Jones will directly and indirectly possess 75.5% of the total
voting power of the Company's outstanding Common Stock. This voting control may
have the effect of delaying, deferring or preventing a change of control of the
Company, including any business combination with an unaffiliated party, impeding
the ability of the shareholders to replace management even if factors warrant
such a change, and affecting the price that investors might be willing to pay in
the future for shares of the Company's Class A Common Stock. See "Certain
Relationships and Related Transactions," "Principal and Selling Shareholders"
and "Description of Capital Stock."

CONFLICTS OF INTEREST; TRANSACTIONS WITH AFFILIATES

The Company has engaged in and expects to continue to engage in numerous
transactions with affiliates. Because certain officers and directors of the
Company are also officers and directors of such affiliates, the terms of any
distribution, programming, production, lease or other agreement between the
Company and such affiliates will not be the result of arm's-length negotiations.
The Board of Directors has not established any policies regarding related
transactions or potential conflicts of interest that may arise in the future
between the Company and its affiliates, and there can be no assurance that the
terms of any such transactions will be as favorable as the Company could obtain
from unaffiliated parties. See "-- Dependence upon Key Personnel" and "Certain
Relationships and Related Transactions."

FLUCTUATIONS IN OPERATING RESULTS; SEASONALITY

The Company has experienced fluctuations in its quarterly operating
results, and it expects such fluctuations to continue in the future. Certain of
the Company's operating expenses, including expenses for (i) program licensing,
development and production, (ii) program distribution and delivery and (iii)
education products and services, are incurred based on the Company's
expectations regarding future demand and market conditions. There can be no
assurance that future expenditures will generate advertising, licensing or
education products and services revenue. The Company may also be unable to
adjust its expenditures in a timely manner to compensate for any unexpected
revenue

shortfall. In addition, a significant change in the level of distribution of the
Company's programming or changes in license fees or advertising revenue may also
affect the Company's earnings comparisons. Any significant revenue shortfall
would have a material adverse effect on the Company's results of operations. In
addition, the Company's operating results may fluctuate based on other factors,
including, among other factors, competitive forces within the current and
anticipated future markets served by the Company and general economic
conditions. The Company's revenue has also varied significantly from quarter to
quarter due to seasonal factors. The Company generally has greater advertising
and student enrollment revenue in the first and fourth quarters. Fluctuations in
operating results could result in volatility in the price of the Class A Common
Stock. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Seasonality and Quarterly Fluctuations."

CAPITAL REQUIREMENTS

Expansion of the Company's business through the licensing, development,
production, marketing and distribution of its programming and education products
and services, as well as through increasing brand recognition of the Company's
networks, will require significant expenditures. The Company expects that the
net proceeds from this Offering will be adequate to meet the Company's
requirements for working capital through 1997. Thereafter, the Company may be
required to seek additional equity or debt financing to pursue future growth
opportunities or to address other needs. There can be no assurance that any
additional financing will be available to the Company on acceptable terms, if at
all. If the Company is unable to obtain additional financing on acceptable
terms in the future, its operations and financial condition would be adversely
affected. Although most of the Company's historical capital needs have been met
by advances from and investments made by current shareholders, such shareholders
are under no obligation to provide, nor does the Company expect such
shareholders to provide, future advances or make future investments in the
Company. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources" and "Certain
Relationships and Related Transactions."

RISKS ASSOCIATED WITH INTERNATIONAL EXPANSION

The Company is seeking to develop international operations through various
arrangements with international cable, broadcast and other media distributors.
The purpose of this expansion effort is to increase revenue from the licensing
of programming to the international syndication market and from student
enrollments outside the United States. The Company's international operations
are subject to certain inherent risks, including varying political and economic
conditions, currency fluctuations, regulation and uncertainties in such
regulation, trade barriers, staffing problems and adverse tax consequences.
Additionally, foreign regulatory requirements may prevent or limit the Company's
ability to distribute programming in certain international markets. There can
be no assurance that such factors will not have a material adverse effect on the
Company's plans for international expansion or growth in the future or that the
Company will be successful in expanding its international operations. See
"Business -- Growth Strategy."

DEPENDENCE UPON KEY PERSONNEL

The Company's success is dependent upon the efforts of its key personnel,
particularly the Company's Chairman of the Board and Chief Executive Officer,
Glenn R. Jones, and its President, Wallace W. Griffin. Mr. Jones is also an
executive officer of affiliates of the Company and will

continue to be engaged in the business activities of such affiliates. Loss of
the services of one or more of the Company's key personnel may adversely affect
its business. The Company does not have employment agreements with, and does not
carry key man life insurance on, any of its employees. See "Management."

LITIGATION

On June 4, 1996, an action entitled Space Vision, Inc., Meridian Gate
Holdings, Ltd. and Higher Education Group, Inc. v. Jones International, Ltd.,
Jones Education Networks, Inc. and Mind Extension University, Inc., Civil Action
No. 96-CV-2644, was filed against the Company in the District Court for the City
and County of Denver, Colorado. The plaintiffs allege that the defendants
failed to perform their obligations under an agreement to provide a certain
number of hours of ME/U Knowledge TV programming for distribution in Taiwan, and
to comply with other provisions of the agreements relating to content of
programming supplied and subtitling of programming. The plaintiffs have alleged
misrepresentation and concealment, breach of contract and bad faith by all
defendants. No dollar amount of damages has been alleged, but plaintiffs seek
to recover both compensatory and punitive damages, including lost profits. The
Company has motions pending to dismiss the fraud and bad-faith claims. The
Company believes that it has not breached the agreements and that it has
meritorious defenses to the allegations. The Company intends to defend this
action vigorously. Because the litigation was only recently filed and no
discovery has occurred, the Company has not yet made an assessment as to any
potential impact that an adverse ruling in this case may have on the Company.
See "Business -- Litigation."

INTELLECTUAL PROPERTY

The Company regards its original network programming as proprietary and
relies primarily on a combination of statutory and common law copyright,
trademark and trade secret laws, customer licensing agreements, employee and
third-party nondisclosure agreements and other methods to protect its
proprietary rights. If substantial unauthorized use of the Company's products
were to occur, the Company's business and results of operations could be
negatively affected. There can be no assurance that the Company's means of
protecting its proprietary rights will be adequate or that the Company's
competitors will not independently develop similar courses, program content and
distribution methods. Additionally, there can be no assurance that third
parties will not claim that the Company's current or future programming or
courseware infringes on the proprietary rights of others. A rights infringement
determination adverse to the Company could have a material adverse effect on the
Company's business. See "Business -- Intellectual Property."

GOVERNMENT REGULATION

Certain states assert authority to regulate non-degree granting education
providers if such provider's educational programs are available to such state's
residents. The Company believes that it is exempt from such regulation because
the Company's courses are offered through independent universities and colleges
that pay the Company a fee for its services and therefore the Company does not
participate in any federal or state student aid or loan programs. However, in
the future, state laws and regulations could limit the ability of the Company to
distribute educational services in certain states. See "Business -- Regulation."

TRANSPONDER ARRANGEMENTS

There are a limited number of domestic communications satellites available
for the transmission of cable television programming to cable system operators.
If satellite transmission were interrupted or terminated due to the failure or
unavailability of a transponder, such interruption or termination could have a
material adverse effect on the Company. The availability of transponders in the
future is dependent on a number of factors over which the Company has no
control.

ABSENCE OF PRIOR PUBLIC MARKET; DETERMINATION OF OFFERING PRICE; POSSIBLE
VOLATILITY OF STOCK PRICE

Prior to the Offering, there has been no public market for the Class A
Common Stock and there can be no assurance that an active public market will
develop or continue after the Offering. The initial public offering price of
the Class A Common Stock was determined through negotiations between the Company
and representatives of the Underwriters and there can be no assurance that the
Class A Common Stock will not trade at a price less than the offering price.
See "Underwriting." The market price of the Class A Common Stock could be
subject to significant fluctuations in response to variations in quarterly
operating results and other factors. See "-- Fluctuations in Operating Results;
Seasonality" and "-- Shares Eligible for Future Sale." In addition, the
securities markets have experienced significant price and volume fluctuations
from time to time in recent years that have often been unrelated or
disproportionate to the operating performance of particular companies. These
broad fluctuations may adversely affect the market price of the Class A Common
Stock.

SHARES ELIGIBLE FOR FUTURE SALE

The market price for the Class A Common Stock could be adversely affected
by the availability of shares of Class A Common Stock for sale or actual sales
of substantial amounts of Class A Common Stock by existing or future
shareholders. Upon completion of the Offering, the 6,900,000 shares of Class A
Common Stock sold in the Offering will be freely tradeable without restriction
or further registration under the Securities Act of 1933, as amended (the
"Securities Act"), by persons other than "affiliates" of the Company. The
remaining 2,592,175 shares of Class A Common Stock will be "restricted
securities" within the meaning of Rule 144 under the Securities Act ("Rule 144")
and may not be sold in the absence of registration under the Securities Act
unless an exemption from registration is available, including the exemption
contained in Rule 144. The holders of 1,676,470 shares of Class A Common Stock
possess registration rights with respect to such shares. The Company and its
current shareholders, directors and executive officers have agreed that for a
period of 180 days from the date of this prospectus, that they will not publicly
offer, sell, contract to sell or otherwise publicly dispose of any shares of
Class A Common Stock without the prior written consent of Montgomery Securities.
Following the expiration of such lock-up agreements, 2,592,175 shares of Class A
Common Stock will become available for resale in the public market, subject to
the volume limitations, holding period and other restrictions of Rule 144.
Additionally, as of August 30, 1996, 1,100,000 shares of Class A Common Stock
have been reserved for issuance under the Company's Stock Option Plan, none of
which were subject to outstanding options as of that date. The Company
anticipates granting stock options to certain of its officers and employees
prior to the completion of this Offering. See "Management." The Company has
also, in connection with this Offering, agreed to grant a warrant to M. Kane &
Company, Inc. to purchase 28,750 shares (33,063 shares if the Underwriters'
overallotment option is exercised in full) of the Class A Common Stock at an
exercise price equal to $18.00 per share (assuming an initial public offering
price of $15.00 per

share), together with certain registration rights relating to such shares.
Future sales of shares of Class A Common Stock, or the perception that such
sales could occur, could have an adverse effect on the market price of the
Company's Class A Common Stock. See "-- Absence of Prior Public Market;
Determination of Offering Price; Possible Volatility of Stock Price," "Shares
Eligible for Future Sale," "Underwriting" and "Description of Capital Stock."

IMMEDIATE AND SUBSTANTIAL DILUTION; ABSENCE OF PAYMENTS OF CASH DIVIDENDS

Purchasers of the Class A Common Stock will experience immediate and
substantial dilution of $7.63 (at an assumed offering price of $15.00 per share)
in net tangible book value per share. Additionally, the Company has not paid
any cash dividends since its inception and does not anticipate paying cash
dividends in the future. See "Dilution" and "Dividend Policy."

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 5,800,000 shares of
Class A Common Stock being offered by the Company, assuming an initial offering
price of $15.00 per share, are estimated to be approximately $78.4 million
($90.3 million if the Underwriters' overallotment option is exercised in full)
after deducting underwriting discounts and commissions and estimated offering
expenses payable by the Company.

The Company intends to use the net proceeds from the Offering as follows:
(i) approximately $23.0 million to increase marketing activities relating to the
Company's networks and its education products and services through 1997; (ii)
approximately $21.0 million to license, develop and produce additional
programming for its networks and its degree and certificate course offerings
through 1997; and (iii) approximately $1.4 million to repay a long-term advance
from Jones International, which has no maturity date and bears interest at the
published prime rate plus 2%. See Note 4 of Notes to the Consolidated Financial
Statements. The Company intends to use the remaining $33.0 million to fund
future operating losses, for marketing and programming expenses after 1997, and
for general corporate purposes, including potential strategic investments in or
acquisitions of businesses complementary to the Company's education products and
services. The Company is not currently engaged in any negotiations concerning
such investments or acquisitions. Pending such uses, the Company intends to
invest the net proceeds from the Offering in investment-grade, short-term,
interest-bearing securities. The Company will not receive any proceeds from the
sale of the 1,100,000 shares of Class A Common Stock to be offered by the
Selling Shareholders. See "Principal and Selling Shareholders."

DIVIDEND POLICY

The Company has never declared or paid a cash dividend on its Common Stock.
The Company intends to retain any earnings for use in the operation and
expansion of its business and therefore does not anticipate paying any cash
dividends in the foreseeable future. The declaration and payment of dividends
in the future will be at the discretion of the Board of Directors and will be
dependent upon the Company's financial condition, results of operations and
capital requirements, terms of future credit or other agreements and such other
factors as the Board of Directors deems relevant. Holders of Class A Common
Stock and Class B Common Stock are entitled to share ratably in dividends
(whether paid in cash, property or shares of the Company), if declared by the
Board of Directors.

CAPITALIZATION

The following table sets forth the actual capitalization of the Company at
June 30, 1996 and as adjusted to reflect the sale of 5,800,000 shares of Class A
Common Stock offered by the Company at the assumed initial offering price of
$15.00 per share and the application of the net proceeds therefrom. See "Use of
Proceeds." This table should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Consolidated Financial Statements and Notes thereto included elsewhere in
this Prospectus.

JUNE 30, 1996
-------------------------------------
Actual As Adjusted
---------------- ------------------
(In thousands)

Long-term debt........................................ $ 1,400(1) $ --

Shareholders' Equity:

Class A Common Stock, $.01 par value; 100,000,000 37 95
shares authorized; 3,692,175 shares issued and
outstanding actual; 9,492,175 shares issued and
outstanding as adjusted(2) ........................

Class B Common Stock, $.01 par value; 2,089,620 shares 21 21
authorized; 2,089,620 shares issued and outstanding
actual and as adjusted ............................

Additional paid-in capital ........................... 40,680 119,041

Accumulated deficit ................................. (34,588) (34,588)
------- --------
Total shareholders' equity .......................... 6,150 84,569
------- --------
Total capitalization .............................. $ 7,550 $ 84,569
======= ========

_______________________

(1) Long-term debt consists of advances from Jones International, which have no
maturity date and bear interest at the published prime rate plus 2%. See
Note 4 of Notes to the Consolidated Financial Statements and "Use of
Proceeds."

(2) Excludes (i) 1,100,000 shares of Class A Common Stock reserved for issuance
under the Company's Stock Option Plan, none of which were subject to
outstanding options as of August 30, 1996 and (ii) 28,750 shares (33,063
shares if the Underwriters' over-allotment option is exercised) of Class A
Common Stock issuable under a warrant the Company has agreed to grant to M.
Kane & Company, Inc. with an exercise price equal to $18.00 per share
(assuming an initial public offering price of $15.00 per share). The
Company anticipates granting stock options to certain of its officers and
employees prior to the completion of this Offering. See "Management - Stock
Option Plan" and "Underwriting."

DILUTION

The net tangible book value of the Company as of June 30, 1996 was
approximately $6.9 million, or $1.19 per share of Common Stock. Net tangible
book value per share represents the amount of tangible assets of the Company,
less total liabilities, divided by the number of shares of Common Stock
outstanding. Without taking into account any other changes in net tangible book
value after June 30, 1996, other than the sale by the Company of the 5,800,000
shares of Class A Common Stock offered hereby (at an assumed initial offering
price of $15.00 per share and after deduction of underwriting discounts and
commissions and estimated Offering expenses), the net tangible book value of the
Company at June 30, 1996 would have been $85.3 million, or $7.37 per share of
Common Stock. This represents an immediate increase in net tangible book value
of $6.18 per share of Common Stock to existing shareholders and an immediate
dilution of $7.63 per share to purchasers of Class A Common Stock. The following
table illustrates the per share dilution to new investors.

Assumed initial public offering price.................................. $15.00
Net tangible book value as of June 30, 1996....................... $ 1.19
Increase in net tangible book value attributable to the Offering.. 6.18
------
Net tangible book value after the Offering............................. 7.37
----
Dilution to purchasers of Class A Common Stock......................... $ 7.63
======

The following table summarizes, on a pro forma basis as of June 30, 1996
(assuming the sale of 5,800,000 shares of Class A Common Stock by the Company at
$15.00 per share), the number of shares of Common Stock purchased from the
Company, the total consideration paid to the Company and the average price per
share paid by the existing shareholders and by the new investors purchasing
shares of Class A Common Stock from the Company in this Offering (before
deducting underwriting discounts and commissions and estimated Offering
expenses):

Shares Purchasesed(1) Total Consideration Average
--------------------------- ------------------------------ Price
Number Percent Amount Percent Per Share
---------- ------------- -------------- ----------- ---------

Existing shareholder....... 5,781,795 49.9% $ 44,301,000 33.7% $7.66

New investors ............. 5,800,000 50.1% 87,000,000 66.3% $15.00
--------- ----- ---------- -----
Total ................ 11,581,795 100.0% $131,301,000 100.0%
========== ====== ============ ======
______________________

(1) Assuming the sale by the Selling Shareholders of 1,100,000 shares of Class
A Common Stock in this Offering, the number of shares of Common Stock held
by the existing shareholders will be reduced to 4,681,795 shares, or 40.4%
of the total number of shares of Common Stock outstanding after this
Offering and new investors will hold 59.6% of the total number of shares of
Common Stock outstanding after the Offering. See "Principal and Selling
Shareholders."

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data of the Company are
qualified by reference to and should be read in conjunction with the
Consolidated Financial Statements and Notes thereto and other financial data
included elsewhere in this Prospectus. The statement of operations data set
forth below for each of the three years in the period ended December 31, 1995
and the balance sheet data at December 31, 1994 and 1995, are derived from the
Company's consolidated financial statements for those years which have been
audited by Arthur Andersen LLP, independent accountants, whose report thereon is
included elsewhere in this Prospectus. The statement of operations data for
each of the two years in the period ended December 31, 1992 and the balance
sheet data at December 31, 1991, 1992 and 1993 are derived from unaudited
financial statements of the Company not included in this Prospectus. The
statement of operations data for the six months ended June 30, 1995 and 1996 and
the balance sheet data at June 30, 1996 are derived from unaudited financial
statements which, in the opinion of management, have been prepared on the same
basis as the audited financial statements and contain all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the financial condition and results of operations for such
periods. These historical results are not necessarily indicative of the results
to be expected in the future. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

Six Months
Ended
Year Ended December 31, June 30,
-------------------------------------------------------- -----------------
1991 1992 1993 1994 1995 1995 1996
------ ------ ------ ------ ------ ------ ------

(In thousands,except per share and student and enrollment data)
Statement of Operations Data:
Revenues:
Advertising revenue .................. $ - $ 24 $ 543 $ 3,423 $ 5,397 $ 2,336 $ 4,529
Licensing prouducts .................. 1,926 2,362 3,051 3,948 6,790 3,397 3,609
Education products and services ...... 2,366 1,624 2,479 2,602 3,724 1,984 2,390
----- ----- ----- ----- ----- ----- ------
Total revenues ...................... 4,292 4,010 6,073 9,973 15,911 7,717 10,528
Operating expenses:
Network expenses .................... 2,088 3,429 4,888 6,537 11,043 5,853 6,372
Education product and services
expenses............................. 1,639 1,515 1,860 2,299 5,231 3,114 2,572
Selling and marketing expenses........ 2,047 2,790 4,379 5,322 5,618 3,171 1,556
General and administrative expenses... 2,304 3,402 4,931 5,972 6,252 3,264 2,198
----- ----- ----- ----- ----- ----- -----
Total operation expenses............. 8,078 11,136 16,058 20,130 28,144 15,402 12,698
----- ------ ------ ------ ------ ------ ------
Operating loss......................... (3,786) (7,126) (9,985) (10,157) (12,233) (7,685) (2,170)
Other income (expenses), net........... 3,060 (788) (76) (2,598) (1,057) (774) (117)
----- ------ ----- ------ ------ ----- -----
Loss before income tax benefit and
minority interest.................... (726) (7,914) (10,061) (12,755) (13,290) (8,459) (2,287)
Income tax benefit..................... 76 1,330 408 1,801 -- -- --
Minority interests..................... -- -- -- -- -- -- 182
----- ----- ------ ------ ------ ----- -----
Net loss............................... $ (649) $ (6,584) $ (9,653) $ (10,954) $ (13,290) $ (8,459) $ (2,105)
===== ======= ======= ======== ======== ======= =======
Net loss per common share.............. $ (0.16) $ (1.58) $ (2.31) $ (2.61) $ (2.40) $ (1.60) $ (0.36)
Weighted average number of common
shares outstanding................... 4,179 4,179 4,179 4,198 5,527 5,273 5,782

OTHER DATA:

Number of network households........... 22,015 22,015 25,552 25,558 25,720 27,240 25,676
Number of paying network households.... N/A 3,802 6,800 8,200 11,500 10,900 11,600
Number of enrollments.................. 588 1,362 1,974 2,544 4,674 2,155 2,586
Number of students..................... 378 1,483 1,141 1,185 1,801 1,717 1,970

DECEMBER 31,
----------------------------------------------- JUNE 30,
1991 1992 1993 1994 1995 1996
-------- -------- -------- -------- -------- ----------
(IN THOUSANDS)

BALANCE SHEET DATA:
Working capital.......................................... $ 682 $ 3,338 $ 1,270 $21,164 $ 7,788 $ 5,938
Total assets............................................. 1,482 4,351 2,886 24,766 12,065 11,088
Long-term debt........................................... 5,843 5,140 13,063 26,693 6,769 1,400
Total shareholders' equity (deficit)..................... (4,640) (1,224) (10,877) (3,831) 2,879 6,150

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion of the results of operations and financial
condition should be read in conjunction with the Company's Consolidated
Financial Statements and Notes thereto appearing elsewhere in this Prospectus.
This Prospectus contains forward-looking statements. These forward-looking
statements involve risks and uncertainties. The Company's actual results may
differ materially from the results discussed in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
those discussed in "Risk Factors."

OVERVIEW

The Company's current shareholders are Glenn R. Jones, Jones International,
Jones Intercable, Inc. ("Jones Intercable") and Bell Canada International BVI
III Limited, a wholly-owned subsidiary of Bell Canada International Inc.
("BCI"). Following the completion of this Offering, Glenn R. Jones, Jones
International, Jones Intercable and BCI will own approximately 3%, 25%, 8% and
5%, respectively, or 41% in the aggregate, of the total shares of outstanding
Common Stock. Following the completion of the Offering, Mr. Jones will directly,
and indirectly through Jones International and Jones Intercable, possess 75.5%
of the total voting power of the Company's outstanding Common Stock. See "Risk
Factors Voting Rights; Control by Principal Shareholders; Anti-Takeover
Effects" and "Principal and Selling Shareholders." The Company's principal
subsidiaries include Mind Extension University, Inc. ("ME/U"), approximately 66%
of which is owned by the Company, approximately 26% of which is owned by Jones
Intercable and approximately 8% of which is owned by Mr. Jones directly. The
Company owns 81% of its other subsidiaries including, among others, Jones
Computer Network, with Mr. Jones owning the remaining 19% of such subsidiaries
directly. The Company allocates income or loss to the minority shareholders in
relation to their ownership interests in the subsidiaries. Any minority share of
loss in excess of the minority interest in those subsidiaries is charged to the
Company which occurs primarily when the capital contributions by the minority
shareholders prove insufficient to fund operations and the Company is required
to advance amounts to the subsidiaries. The Company, to the extent available,
will recover these excess losses against any future income and/or equity
contributions.

The Company's revenue is derived primarily from (i) its television
networks, ME/U Knowledge TV and Jones Computer Network, and (ii) its education
products and services. The Company's television networks generate revenue (i)
from the sale of advertising time on its networks, including both long-form
advertising (infomercials) and short-form spot advertising and (ii) through

licensing fees, which include subscriber and syndication fees, paid by cable
operators and other programming distributors, respectively. Historically, long-
form advertisements have accounted for the majority of the Company's advertising
revenue. In both 1995 and for the six months ended June 30, 1996, network
revenue accounted for approximately 77% of total revenue. The Company's
education products and services revenue is comprised of (i) gross tuition fees,
(ii) student servicing fees and (iii) the sale of education-oriented products,
primarily computer training videos and cable television training programs. The
Company recognizes as revenue 100% of the gross tuition fees paid by students to
the Company for the degree and certificate courses it provides and expenses that
portion of the tuition that is remitted to the applicable university or college,
which is typically 65% of tuition. Upon enrollment, the Company records an
accounts receivable from the student and deferred revenue is recognized
beginning with the start of the term, pro rata over the length of the term. The
length of the term is typically three months. If a student withdraws, tuition
paid related to the unearned portion of the course is refunded in accordance
with the applicable refund policy and accounts receivable and deferred revenue
are adjusted accordingly. The Company rebates the appropriate portion of
tuition to the applicable university or college at the end of the course term.
In both 1995 and for the six months ended June 30, 1996, the Company's education
products and services revenue accounted for approximately 23% of total revenue.

Operating expenses consist of (i) network expenses, (ii) education
products and services expenses, (iii) selling and marketing expenses and (iv)
general and administrative expenses. Network expenses consist of program
licensing, development and production costs, as well as distribution and
delivery costs. Program licensing, development and production costs include the
costs of licensing, researching, designing and producing programs for the
Company's networks, and other associated operating costs. The majority of the
Company's program licensing, development and production costs are expensed as
they are incurred. Program distribution and delivery costs include transponder
leasing fees, uplinking charges and other associated operating costs. The costs
associated with program distribution and delivery are relatively fixed with
respect to each of the Company's two networks. Education products and services
expenses include tuition rebates to universities and colleges that offer the
degree and certificate courses delivered by the Company, production, development
and licensing costs related to products and services offered, and other
associated operating expenses. Selling and marketing expenses include salaries,
travel and other associated operating expenses related to the Company's
marketing activities, as well as the costs of designing, producing and
distributing marketing, advertising and promotional materials. General and
administrative expenses include personnel and associated operating costs for the
Company's executive and management staff and operational support.

Under the terms of an affiliation agreement with a certain MSO, the
Company pays a rebate to the MSO equal to such MSO's pro rata share (based on
the number of subscribers in its cable systems receiving ME/U Knowledge TV as a
percentage of the total number of subscribers receiving such network) of 20% of
net advertising revenue (defined as gross advertising revenue less outside
agency commissions) generated by ME/U Knowledge TV. In addition, the Company
pays such MSO a rebate equal to 5% of net sales receipts from sales of
merchandise made to customers in zip codes served by MSO's systems carrying ME/U
Knowledge TV as a consequence of direct on-air marketing and sales of products
on ME/U Knowledge TV. For 1994 and 1995, these rebates amounted to
approximately $35,000 and $61,000, respectively, and are expected to be
approximately $100,000 in 1996.

The Company expects certain costs to increase and, as a result, to
incur substantially higher operating losses and net losses through at least
1998. These operating losses and net losses are

primarily the result of increased expenditures for program licensing,
development and production, and expanded sales and marketing expenses to
increase distribution, brand awareness and student enrollments, as well as
advertising and program licensing agreements. The Company expects to fund these
expenditures and operating losses with a portion of the proceeds of this
Offering.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain
data from the Company's consolidated statements of operations as a percentage of
total revenue:

Years Ended December 31, Six Months Ended June 30,
---------------------------- -------------------------
1993 1994 1995 1995 1996
---- ---- ---- ---- ----

TOTAL REVENUES:
Advertising revenue................................ 9% 34% 34% 30% 43%
Licensing revenue.................................. 50 40 43 44 34
--- --- --- --- ---

Network revenue.................................. 59 74 77 74 77
Education products and services revenue............ 41 26 23 26 23
--- --- --- --- ---
Total revenue.................................... 100 100 100 100 100
=== === === === ===

OPERATING EXPENSES:
Network expenses................................... 80 66 69 76 61
Education products and service expenses............ 31 23 33 40 24
Selling and marketing expenses..................... 72 53 35 41 15
General and administrative expenses................ 81 60 39 42 21
--- ---- --- --- ---
Total operating expenses......................... 264 202 176 199 121
=== ==== === === ===

Operating loss..................................... (164) (102) (76) (99) (21)

Net loss.......................................... (159)% (110)% (84)% (110)% (20)%
====== ====== ===== ====== =====

SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995

Total Revenue. Total revenue increased $2.8 million, or 36%, from $7.7
million for the six months ended June 30, 1995 to $10.5 million for the six
months ended June 30, 1996. This increase was due primarily to an increase in
network revenue and secondarily to an increase in sales of education products
and services.

Network Revenue. Network revenue increased $2.4 million, or 42%, from $5.7
million for the six months ended June 30, 1995 to $8.1 million for the six
months ended June 30, 1996. Advertising revenue increased $2.2 million, or 96%,
from $2.3 million for the six months ended June 30, 1995 to $4.5 million for the
six months ended June 30, 1996, primarily as a result of increased rates charged
for long-form advertising. Licensing revenue increased $0.2 million, or 6%,
from $3.4 million for the six months ended June 30, 1995 to $3.6 million for the
six months ended June 30, 1996, due primarily to an increase in the number of
paying subscribers receiving ME/U Knowledge TV and Jones Computer Network.

Education Products and Services Revenue. Education products and services
revenue increased $0.4 million, or 20%, from $2.0 million for the six months
ended June 30, 1995 to $2.4 million for the six months ended June 30, 1996.
This increase was due primarily to an approximately 81%

increase in unit sales of ME/U Knowledge Store products and an approximately 20%
increase in student enrollments in degree and certificate courses.

Network Expenses. Network expenses increased $0.5 million, or 8%, from
$5.9 million for the six months ended June 30, 1995 to $6.4 million for the six
months ended June 30, 1996. This increase was due primarily to an increase in
program distribution and delivery costs and was partially offset by a decrease
in program licensing, development and production costs. Program licensing,
development and production costs decreased $0.3 million, or 11%, from $2.7
million for the six months ended June 30, 1995 to $2.4 million for the six
months ended June 30, 1996. This decrease was due primarily to reductions in
international distribution costs and viewer research activities, which offset
increased operating costs. Program distribution and delivery costs increased
$0.8 million, or 25%, from $3.2 million for the six months ended June 30, 1995
to $4.0 million for the six months ended June 30, 1996. This increase was due
primarily to an increase in personnel and associated operating costs due to an
increase in the size of the affiliate sales staff and a $0.3 million write-off
of an account receivable. As a percentage of network revenue, network expenses
decreased from 104% for the six months ended June 30, 1995 to 79% for the six
months ended June 30, 1996.

Education Products and Services Expenses. Education products and services
expenses decreased $0.5 million, or 16%, from $3.1 million for the six months
ended June 30, 1995 to $2.6 million for the six months ended June 30, 1996.
This decrease was due primarily to a reduction in expenditures for original and
licensed products and a reduction in personnel and contract service costs and
was partially offset by an increase in tuition rebates. As a percentage of
education products and services revenue, education and product service expenses
decreased from 155% for the six months ended June 30, 1995 to 108% for the six
months ended June 30, 1996.

Selling and Marketing Expenses. Selling and marketing expenses decreased
$1.6 million, or 50%, from $3.2 million for the six months ended June 30, 1995
to $1.6 million for the six months ended June 30, 1996. This decrease was due
primarily to decreases in advertising, promotion and public relations expenses
as a result of the redevelopment of the Company's marketing strategy during the
first half of 1996. Significantly greater marketing expenditures primarily
related to the development of new marketing initiatives in the second half of
1996 and secondarily related to staff increases should result in year-end
expenses approximating those of 1995. As a percentage of total revenue, selling
and marketing expenses decreased from 41% for the six months ended June 30, 1995
to 15% for the six months ended June 30, 1996.

General and Administrative Expenses. General and administrative expenses
decreased $1.1 million, or 33%, from $3.3 million for the six months ended June
30, 1995 to $2.2 million for the six months ended June 30, 1996. This decrease
was due primarily to the reduction of certain executive and management staff and
support personnel and was partially offset by an increase in salary allocations
to the Company by its affiliates. As a percentage of total revenue, general and
administrative expenses decreased from 42% for the six months ended June 30,
1995 to 21% of total revenue for the six months ended June 30, 1996.

Other Expense (Income). Other expense (income) includes primarily interest
income and interest expense. Other expense (income) decreased $0.7 million, or
88%, from $0.8 million for the six months ended June 30, 1995 to $0.1 million
for the six months ended June 30, 1996. This decrease was primarily the result
of a decrease in interest expense resulting from the conversion in April 1995
of a $20 million note payable to Jones Intercable into shares of the Company's
Class A Common Stock.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Total Revenue. Total revenue increased $5.9 million, or 59%, from $10.0
million for the year ended December 31, 1994 to $15.9 million for the year ended
December 31, 1995. This increase was due primarily to an increase in network
revenue and secondarily to an increase in the sale of education products and
services.

Network Revenue. Network revenue increased $4.8 million, or 65%, from $7.4
million for the year ended December 31, 1994 to $12.2 million for the year ended
December 31, 1995. Advertising revenue increased $2.0 million, or 59%, from $3.4
million for the year ended December 31, 1994 to $5.4 million for the year ended
December 31, 1995. Revenue from the sale of airtime for long-form advertising
accounted for $1.7 million of the increase in advertising revenue. This
increase was due primarily to a 154% increase in available airtime for long-form
advertising on ME/U Knowledge TV and a 300% increase in available airtime on
Jones Computer Network. Licensing revenue increased $2.8 million, or 70%, from
$4.0 million for the year ended December 31, 1994 to $6.8 million for the year
ended December 31, 1995. This increase was due primarily to an increase in the
number of paying subscribers receiving ME/U Knowledge TV for which cable
operators are required to pay a per subscriber license fee, and the fact that
the Company received 12 months of Jones Computer Network licensing revenue in
1995 as compared to 4 months of such licensing revenue in 1994.

Education Products and Services Revenue. Education products and services
revenue increased $1.1 million, or 42%, from $2.6 million for the year ended
December 31, 1994 to $3.7 million for the year ended December 31, 1995. This
increase was primarily due to an approximately 83% increase in student
enrollments in degree and certificate courses offered by the Company and an
approximately 73% increase in product sales through the ME/U Knowledge Store.

Network Expenses. Network expenses increased $4.5 million, or 69%, from
$6.5 million for the year ended December 31, 1994 to $11.0 million for the year
ended December 31, 1995. This increase was due primarily to a significant
increase in program distribution and delivery costs, and a smaller increase in
program licensing, development and production costs. Program licensing,
development and production costs increased $1.4 million, or 44%, from $3.2
million for the year ended December 31, 1994 to $4.6 million for the year ended
December 31, 1995. This increase was due primarily to increased expenditures for
the development and production of enhanced programming for Jones Computer
Network, which was launched in September 1994, and ME/U Knowledge TV. Program
distribution and delivery costs increased $3.1 million, or 94%, from $3.3
million for the year ended December 31, 1994 to $6.4 million for the year ended
December 31, 1995. This increase was due primarily to increased transponder
fees, uplink charges and other associated operating costs for Jones Computer
Network, which operated for 12 months in 1995 as compared to four months in
1994. In 1995, the Company also incurred initial program distribution and
delivery costs associated with licensing programming internationally. As a
percentage of network revenue, network expenses increased from 88% to 90% for
the periods ended December 31, 1994 and 1995, respectively.

Education Products and Services Expenses. Education products and services
expenses increased $2.9 million, or 126%, from $2.3 million for the year ended
December 31, 1994 to $5.2 million for the year ended December 31, 1995. This
increase was due primarily to significant costs associated with the development
and production of ME/U Knowledge Store products in 1995 as compared to 1994 and,
to a lesser extent, increased tuition rebates and other costs related to the
approximately 83% increase in student enrollments and an approximately 73%
increase in unit sales

through the ME/U Knowledge Store. As a percentage of education products and
services revenue, education products and services expenses increased from 88%
for the year ended December 31, 1994 to 140% for the year ended December 31,
1995.

Selling and Marketing Expenses. Selling and marketing expenses increased
$0.3 million, or 6%, from $5.3 million for the year ended December 31, 1994 to
$5.6 million for the year ended December 31, 1995. This increase was primarily
due to continued promotional efforts directed toward cable operators to
facilitate the launch of the Jones Computer Network in September 1994. As a
percentage of total revenue, selling and marketing expenses decreased from 53%
for the year ended December 31, 1994 to 35% for the year ended December 31,
1995.

General and Administrative Expenses. General and administrative expenses
increased $0.3 million, or 5%, from $6.0 million for the year ended December 31,
1994 to $6.3 million for the year ended December 31, 1995. This increase was
due primarily to the implementation of a computerized traffic and billing system
to support advertising sales. As a percentage of total revenue, general and
administrative expenses decreased from 60% for the year ended December 31, 1994
to 39% for the year ended December 31, 1995.

Other Expense (Income). Other expense (income) decreased $1.5 million, or
58%, from $2.6 million for the year ended December 31, 1994 to $1.1 million for
the year ended December 31, 1995. This decrease was primarily a result of a
decrease in interest expense resulting from the conversion in April 1995 of a
$20 million note payable to Jones Intercable into shares of the Company's Class
A Common Stock.

YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993

Total Revenue. Total revenue increased $3.9 million, or 64%, from $6.1
million for the year ended December 31, 1993 to $10.0 million for the year ended
December 31, 1994. This increase was due primarily to an increase in network
revenue.

Network Revenue. Network revenue increased $3.8 million, or 106%, from
$3.6 million for the year ended December 31, 1993 to $7.4 million for the year
ended December 31, 1994. Advertising revenue increased $2.9 million to $3.4
million for the year ended December 31, 1994. Revenue from the sale of airtime
for long-form advertising accounted for substantially all of the increase in
advertising revenue. This increase was due primarily to the increased airtime
available for long-form advertising. Licensing revenue increased $0.9 million,
or 29%, from $3.1 million for the year ended December 31, 1993 to $4.0 million
for the year ended December 31, 1994. This increase was due to an increase in
the number of subscribers receiving ME/U Knowledge TV and Jones Computer Network
for which the cable operators were required to pay a per subscriber license fee.

Education Products and Services Revenue. Education products and services
revenue increased $0.1 million, or 4%, from $2.5 million for the year ended
December 31, 1993 to $2.6 million for the year ended December 31, 1994. This
increase was due to an approximately 29% increase in student enrollments in
degree and certificate courses offered by the Company and was partially offset
by a decline in product sales.

Network Expenses. Network expenses increased $1.6 million, or 33%, from
$4.9 million for the year ended December 31, 1993 to $6.5 million for the year
ended December 31, 1994. This increase was due primarily to an increase in
program licensing, development and production costs.

Program licensing, development and production costs increased $1.3 million, or
68%, from $1.9 million for the year ended December 31, 1993 to $3.2 million for
the year ended December 31, 1994. This increase was due primarily to increased
program expenditures relating to the launch of Jones Computer Network and
secondarily to increased program expenditures for ME/U Knowledge TV. Program
distribution and delivery costs increased $0.3 million, or 10%, from $3.0
million, for the year ended December 31, 1993 to $3.3 million for the year ended
December 31, 1994. This increase was due primarily to an increase in transponder
fees and uplinking charges as a result of the launch of Jones Computer Network.
As a percentage of network revenue, network expenses decreased from 136% for the
year ended December 31, 1993 to 88% for the year ended December 31, 1994.

Education Products and Services Expenses. Education products and services
expenses increased $0.4 million, or 21%, from $1.9 million for the year ended
December 31, 1993 to $2.3 million for the year ended December 31, 1994. This
increase was due primarily to the tuition rebates as a result of the 29%
increase in student enrollments in degree and certificate courses offered by the
Company, partially offset by a decline in product sales. As a percentage of
education products and services revenue, education products and services
expenses increased from 76% for the year ended December 31, 1993 to 88% for the
year ended December 31, 1994.

Selling and Marketing Expenses. Selling and marketing expenses increased
$0.9 million, or 20%, from $4.4 million for the year ended December 31, 1993 to
$5.3 million for the year ended December 31, 1994. This increase was primarily
due to increased promotional activity related to the launch of Jones Computer
Network. As a percentage of total revenue, selling and marketing expenses
decreased from 72% for the year ended December 31, 1993 to 53% for the year
ended December 31, 1994.

General and Administrative Expenses. General and administrative expenses
increased $1.1 million, or 22%, from $4.9 million for the year ended December
31, 1993 to $6.0 million for the year ended December 31, 1994. This increase
was primarily due to the increase in the executive staff and associated general
administrative expenses related to the anticipated growth of the Company. As a
percentage of total revenue, general and administrative expenses decreased from
81% for the year ended December 31, 1993 to 60% for the year ended December 31,
1994.

Other Expense (Income). Other expense (income) increased $2.5 million to
$2.6 million for the year ended December 31, 1994. This increase was due
primarily to an increase in interest expense resulting from increased levels of
borrowings from affiliates.

NEW ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-lived
Assets and for Long-lived Assets to be Disposed Of" ("SFAS 121"), which
establishes accounting standards for the impairment of long-lived assets,
certain identifiable intangibles and goodwill. The Company adopted SFAS 121
effective January 1, 1996. Implementation of SFAS 121 had no material effect on
the Company's financial position or results of operations.

The Company adopted Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("SFAS 123") effective January 1,
1996. SFAS 123 recommends a fair value based method of accounting for employee
stock compensation, including stock options.

However, companies may choose to account for stock compensation using the
intrinsic value based method as prescribed by Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" and provide pro forma
disclosures of net income and earnings per share as if the fair value based
method had been applied. The Company elected to account for stock compensation
using the intrinsic value based method, and thus SFAS 123 will not have any
impact on reported operating results.

SEASONALITY AND QUARTERLY FLUCTUATIONS

The Company experiences seasonality in its results of operations from
quarter to quarter, primarily as a result of changes in the level of advertising
on its networks and on the level of student enrollments. The Company has
generally higher advertising revenue in the first and fourth quarters due to
viewership and corresponding rates received for advertising during these
quarters. While the Company enrolls students throughout the year, educational
products and services revenue is the greatest during the Company's fourth and
first quarters which correspond to the Fall and Spring academic enrollment
periods. The Company's results of operations from quarter to quarter may be
adversely impacted in the future as the Company increases its program licensing,
development and production expenses and selling and marketing expenses. See
"Risk Factors -- Fluctuations in Operating Results; Seasonality."

LIQUIDITY AND CAPITAL RESOURCES

Since inception, the Company has financed its operations from a combination
of advances to and investments in the Company made by current shareholders.
These shareholders are under no obligation to provide, nor does the Company
expect them to provide, future advances or make future investments in the
Company. The Company currently has no external credit facilities.
Historically, the Company has been able to maintain positive working capital as
a result of the advances and investments from shareholders. In December 1994,
the Company received $18.0 million from BCI in exchange for a then 15% interest
in the Company. In April 1995, Jones Intercable converted $20.0 million of
advances made to ME/U into a then 17% interest in the Company. Also, in March
1996, Jones International invested $6.3 million in the Company in exchange for
shares of Class A Common Stock and Class B Common Stock. The Company's working
capital was $7.8 million and $5.9 million at December 31, 1995 and June 30,
1996, respectively. In addition, Jones International has historically funded
the Company's ordinary course working capital needs. The Company has repaid
these amounts on a monthly basis as revenues were received or from other cash
resources. Following the consummation of this Offering, any advances from Jones
International to fund the Company's operating activities, which advances are not
expected to be material, will bear interest at or below market rates. Jones
International has no obligation to continue such funding. See "Certain
Relationships and Related Transactions."

Since its inception, the Company has incurred net losses as a result of
expenses associated with developing and launching its networks and developing
its distance education degree and certificate courses. Net cash used in
operating activities for the years ended December 31, 1993, 1994 and 1995, and
the six months ended June 30, 1996 was $9.4 million, $13.1 million, $11.1
million and $1.6 million, respectively.

The Company's investing activities have consisted primarily of licensing of
programming content in support of expanded television programming and, to a
lesser extent, capital expenditures, except for a purchase of marketable debt
securities in 1994 and their corresponding sale in 1995. For

the years ended December 31, 1993, 1994 and 1995, and the six months ended
June 30, 1996, net cash provided by (used in) investing activity was $(0.4)
million, $(10.8) million, $9.2 million and $(1.4) million, respectively. Net
cash provided by financing activities in 1993, 1994, 1995 and the six months
ended June 30, 1996 were $7.5 million, $32.1 million, $0.0 million and $0.8
million. See "Certain Relationships and Related Transactions."

The Company presently has no material commitments for future capital
expenditures.

The Company believes that the net proceeds from this Offering will provide
sufficient cash to fund its liquidity requirements through 1997. Should the
Company require additional capital in the future, the Company will be required
to seek external financing sources. Such external sources of funding may not be
available on terms and conditions acceptable to the Company, if at all. See
"Risk Factors -- Capital Requirements."

EFFECT OF INFLATION

The Company does not believe its operations have been materially affected
by inflation.

BUSINESS

OVERVIEW

THE MARKET FOR ADULT EDUCATION PROGRAMMING AND CREDIT COURSES

Television networks that focus on delivery of both information and
entertainment programming, including CNN and Headline News, the Discovery
Channel, The Learning Channel, Arts & Entertainment and CNBC, have become
popular in recent years and advertisers have responded positively to the success
of programs aired on these networks and the viewers they attract. Based on
recent industry data, the Company believes that advertisers spent over $3.1
billion, net of agency commissions, on the 27 largest advertising-supported
cable networks in 1995, representing an increase of approximately 112% from the
approximately $1.5 billion spent in 1990. Of these

expenditures, the Company estimates that advertisers spent approximately $780
million, net of agency commissions, in 1995 on 10 networks airing information-
based programming, representing an increase of approximately 144% from such
advertising expenditures on these networks in 1990. In addition, license fees
paid by cable operators to the 27 largest advertising-supported cable networks
increased approximately 110% to approximately $2.4 billion in 1995 from
approximately $1.2 billion in 1990. Of these expenditures, the Company estimates
that license fees paid by cable operators to networks airing information-based
programming were approximately $600 million in 1995. The Company believes that
its programming is more education-related and less oriented toward a general
television audience than the programming on the information-based networks
referred to above. The Company therefore anticipates that it may not be as
attractive to advertisers or MSOs. The Company currently has limited
distribution by cable operators and a very small portion of this advertising
market and there can be no assurance that the Company's share of this
advertising market or license fees can be increased.

The Company, working in conjunction with select universities and colleges,
offers distance education degree and certificate courses for adults. In 1993,
the most recent year for which information is available, the U.S. Department of
Education estimated that adults over 24 years of age comprised approximately 6.3
million, or 44%, of the 14.3 million students enrolled in higher education
programs. The Company believes that traditional educational institutions, which
typically are designed to serve the needs of the 18 to 24 year-old student, have
significant inherent shortcomings in meeting the needs of older students. Most
universities and colleges provide the bulk of their educational programming
based on a traditional academic calendar with courses starting and finishing on
a semester schedule and with extensive breaks between semesters. In addition,
most universities and colleges offer programs that are site-based, requiring
students to attend classes on a regular basis at a specific time and location.
This structure limits the educational opportunities of adults who, due to
personal and career responsibilities, desire courses that are more flexibly
provided and scheduled. The Company believes its distance education programs
increase the accessibility of educational opportunities desired by many adults.

THE JONES EDUCATION NETWORKS APPROACH

The Company utilizes multiple forms of communications technologies and
media to market and deliver knowledge-enhancing television programming, degree
and certificate courses and other knowledge-based products, such as educational
videos and software. The Company's programming, products and services are
designed to be integrated and are intended to encourage viewers of the Company's
networks to enroll in its degree and certificate courses and to purchase its
other education products and services. Key elements of the Company's approach
include:

Programming. The Company licenses, develops and produces knowledge-
enhancing programs focusing primarily on its four high-demand subject areas.
The Company's network programs are designed to provide adults with practical
information that can be applied immediately in their personal and professional
lives in a cost-effective and convenient manner. These programs are distributed
on the Company's two 24-hours a day, satellite-delivered networks, ME/U
Knowledge TV and Jones Computer Network, and to a lesser extent through
syndication on other networks. ME/U Knowledge TV, launched in 1987, offers a
variety of programming relating to each of the Company's four high-demand
subject areas and Jones Computer Network, launched in 1994, offers programming
focused on computers and technology. The Company also uses its networks as a
platform to market its distance education degree and certificate courses and
other education products and services.

Distance Education Degree and Certificate Courses. Working in conjunction
with select universities and colleges, the Company offers distance education
degree and certificate courses that are delivered directly to adults through
multiple forms of media, including videotapes, television, print materials, the
Internet and other interactive multimedia. The Company's distance education
degree and certificate courses target adults who desire in-depth, post-secondary
education but are limited by location and time constraints. The Company seeks
affiliations with universities and colleges that have strong reputations,
expertise in the subject matter in which the degree or certificate is offered,
and the willingness and ability to design courses that enable affordable and
effective education to occur beyond the confines of the classroom. The Company
seeks to distinguish its distance education programs by offering students (i) a
variety of accredited universities and colleges from which they can choose to
earn a degree or certificate, (ii) a greater selection of degree and certificate
programs, (iii) greater flexibility in the scheduling and delivery methods for
its courses and (iv) increased frequency in the delivery of its courses.

Education Services Center. The Company's Education Services Center
provides a range of support services for the Company's distance education degree
and certificate course programs, including facilitating telephone and Internet
communications among students and faculty members in order to provide an
interactive component that is essential to the Company's distance education
model. In addition, the Education Services Center performs student recruitment
functions and provides enrollment processing and academic advising services to
students. The Education Services Center also provides administrative support
services, such as tuition billing and collection, to participating universities
and colleges. The Education Services Center also handles inquiries concerning
the Company's education products and services that are promoted on its networks.
The Company believes its Education Services Center is unique in its practice of
providing complete services and support to distance education students
throughout their learning experience.

ME/U Knowledge Store. The Company's ME/U Knowledge Store offers a broad
selection of educational videotapes, CDs and other learning tools. The ME/U
Knowledge Store products are designed to present information that may be
immediately employed by adults in their personal and professional lives and that
may be viewed at a time and place of their choosing. The products are marketed
through promotion on the Company's networks and through a catalog published and
distributed by the Company.

GROWTH STRATEGY

The Company's strategy is to strengthen and expand its position as one of
the leading providers of knowledge-enhancing programming and distance education
products and services to adults. Key elements of this strategy include:

Expand Distribution of Its Networks. The Company's networks, ME/U
Knowledge TV and Jones Computer Network, are currently available to
approximately 24% and 1%, respectively, of households with televisions in the
United States. The Company seeks to expand the distribution of its networks to
a larger percentage of the estimated 97 million U.S. households with televisions
by (i) increasing distribution with cable operators currently carrying one or
both of its networks, (ii) establishing distribution of its networks with cable
operators that currently do not carry its networks and (iii) establishing
distribution of its networks with providers of direct broadcast satellite and
wireless video services. As the Company expands the distribution of its
networks, it anticipates generating increased advertising revenue, increased
licensing revenue from cable operators and other programming distributors and
increased revenue from the sale of education products and services.

License, Develop and Produce High Quality Programming. The Company intends
to continue to improve the quality and quantity of its network programming,
including programming related to degree and certificate courses in each of its
four high-demand subject areas. The Company intends to license, develop and
produce high-quality programs to increase the appeal of its networks to cable
operators and other distributors, viewers and advertisers and to meet the
knowledge needs of adults.

Increase Marketing and Promotion. The Company anticipates increasing its
marketing and promotion expenses from approximately $5.0 million in 1996 to
approximately $20.0 million in 1997 in support of the Company's efforts to
expand distribution of its networks, increase the number of advertisers and
advertisements, increase viewership, increase student enrollments and increase
sales of education products. The Company's efforts will be focused on (i)
promoting the benefits of ME/U Knowledge TV and Jones Computer Network to cable
operators and other media distributors and their viewers and users, (ii)
promoting its distance education degree and certificate courses and education-
oriented products to adults and (iii) building brand recognition of its networks
and education products and services.

Increase Student Enrollments. The Company intends to increase student
enrollments by aggressively marketing its distance education degree and
certificate courses on its networks as well as on other networks, expanding the
number of universities and colleges that offer courses through the Company,
introducing new degree and certificate courses that respond to the changing
educational needs of adults, offering distance education programs and services
through new and more convenient media and providing a more flexible enrollment
schedule to better accommodate the needs of adults. The Company intends to
enhance the delivery of its network programming and distance education degree
and certificate courses as new communications technologies are developed and
become cost effective. In 1995, the Company began offering courses using the
Internet, thereby making certain of the Company's degree and certificate
programs more readily available and easily accessible worldwide.

Develop Corporate Relationships. The Company plans to continue to
establish educational relationships with major corporations, governmental
agencies and the military in order to provide degree and certificate courses and
other training programs to their employees. The Company believes that the
establishment of such corporate relationships provides an effective means of
marketing its education products and services to adults who are likely to
receive tuition assistance or reimbursement.

Expand in International Markets. The Company believes that there are
significant opportunities to deliver its programming, products and services
internationally, especially in the fields of computers and technology and
business. The Company recently entered into licensing agreements providing for
distribution of the Company's programming in a number of foreign countries,
including China and Thailand, and continues to assess opportunities for further
international expansion.

Pursue Strategic Acquisitions. The Company intends to pursue strategic
investments or acquisitions that are complementary to its education products and
services. Although the Company currently has no agreement or understanding with
respect to any such strategic investment or acquisition, the Company plans to
evaluate opportunities to expand its business through strategic investments or
acquisitions.

-33-

PROGRAMMING

The Company licenses, develops and produces educational programming
designed to meet the personal and professional enrichment needs of adults. The
Company's programming content currently consists of both programming licensed
from third parties and programming developed and produced by the Company. The
Company currently dedicates approximately 30% of its combined daily programming
schedules to knowledge-enhancing general programming, approximately 30% to its
degree and certification courses and the balance to advertising and promotions.
The Company's programming is typically shown in half hour and hour segments and
is focused on four high-demand subject areas that the Company's proprietary
research indicates are of high educational interest, including: (i) computers
and technology, (ii) business, careers and finance, (iii) health and wellness,
and (iv) global culture and languages.

Licensed Programming. The majority of the Company's network programming is
licensed from various sources, including program syndicators and the
universities and colleges whose courses are offered through the Company. The
Company has chosen to license most of its programming because it is less capital
intensive than development and production and increases the networks'
programming flexibility. As a result, the Company expects to continue to
license the majority of its programming in the future. The Company exhibits the
licensed programming pursuant to agreements with suppliers and generally pays a
negotiated annual fixed fee under these licenses. In general, licenses extend
for one year and entitle the Company to show each program an unlimited number of
times on its networks.

Original Programming. To complement licensed programming, the Company also
develops and produces original programming. The Company has historically
developed and produced programming within the four high-demand subject areas in
which there is a lack of relevant high quality programming available for
licensing. The majority of the programming produced by the Company has
consisted of computers and technology programming aired on both of its networks.
The Company plans to increase its production of original programming in the
future as it believes the development and production of original programming
creates distinctive "brand-name" shows that are expressly identified with its
networks. The Company believes that additional value can also be realized
through licensing its original programming domestically and internationally.
The Company's development activities include surveying adults to determine what
types of programming they would be interested in viewing, conducting marketing
studies, convening focus groups, hiring consultants to assist in the development
of program content and producing pilot episodes to further test viewer interest.
Most of the Company's original programming has been and is anticipated to be
produced by production companies under the supervision of the Company.

-34-

The following table provides selected examples of programs that have been
recently licensed or developed and produced by the Company within its four high-
demand subject areas:

NUMBER
PROGRAMS OF EPISODES DESCRIPTION
- -------- ----------- -----------

COMPUTERS AND TECHNOLOGY

Home Computing/(1)(2)/ 13 A program employing a light-
hearted approach to explaining the
basics of using computer hardware
and software.

New Media News/(1)(2)/ 117 A news format program, co-produced
with KRON-TV of San Francisco,
reporting on current developments
in computers and technology.

Using the Internet in 6 A program offered by International
Business/(1)(2)(3)/ University College that examines
issues related to doing business
on the Internet.

BUSINESS, CAREERS AND
FINANCE

AARP Works/(1)/ 16 A program designed to provide
information on effective job
searching techniques for mature
job seekers.

Leading and Managing the 10 A program offered by University
Organization of the of Colorado--Colorado Springs
Future/(1)(3)/ that explores leadership and
management skills important to
success in business
organizations.

International 20 A program offered by Regis
Management/(1)(3)/ University that focuses on
strategies and structures of
international business, including
discussion of the future role of
small and mid-sized firms in these
markets.

HEALTH AND WELLNESS

Professional Issues in 24 A program offered by California
Nursing/(1)(3)/ State University at Dominguez
Hills that examines the diverse
roles and settings for nursing
practice in the health care
delivery system.

The Cutting Edge Medical 26 A magazine format program
Report/(1)/ focusing on breakthrough
developments in technology which
enables people to live longer,
healthier lives.

Psychological Foundations of 26 A program offered by Oklahoma
Childhood/(1)(3)/ State University that focuses on
children's development of
cognitive, affective and
psychomotor skills.

-35-

NUMBER
PROGRAMS OF EPISODES DESCRIPTION
- -------- ----------- -----------

GLOBAL CULTURE AND
LANGUAGES

French Deux News/(1)/ 260 A daily local news program from
France designed to provide an
international news update from a
French perspective.

More Simply Spanish/(1)(3)/ 20 A Spanish course that uses a
conversational approach to
illustrate how to communicate
about travel, shopping, eating and
other activities in Spanish.

Europa Seminal/(1)/ 26 A weekly Spanish language news
format program providing a wide
ranging international news report.

____________________

(1) Shown on ME/U Knowledge TV.
(2) Shown on Jones Computer Network.
(3) Also included as part of a credit bearing course.

DISTRIBUTION

The Company's programming is distributed on its networks, ME/U Knowledge TV
and Jones Computer Network and, to a lesser extent, through syndication to third
parties for distribution domestically and internationally.

ME/U Knowledge TV. Launched in 1987, ME/U Knowledge TV is a 24-hour a day,
satellite-delivered programming network that features programs in each of the
Company's four high-demand subject areas. A portion of the programming on ME/U
Knowledge TV is also carried on Jones Computer Network. ME/U Knowledge TV is
currently available to approximately 24.5 million households in the United
States, approximately 19.4 million of which are in cable television systems that
distribute the network on a full or part time basis, and the remainder of which
receive the network through C-Band satellite dishes or untraceable cable
connections. ME/U Knowledge TV is currently distributed in systems owned by
each of the ten largest MSOs in the United States and the Company has
affiliation agreements with five of such MSOs, including Tele-Communications,
Inc., Time Warner, Marcus Cable Partners, Cox Cable and Jones Intercable. In
addition, the Company also has affiliation agreements providing for the
distribution of ME/U Knowledge TV with approximately 25 smaller MSOs, including
two cable cooperatives, Telesynergy and the National Cable Television
Cooperative, which together represent MSOs that own cable television systems
that reach over 9 million cable subscribers. The Company's affiliation
agreements generally provide that the MSO may distribute the network in as many
or as few of its cable television systems as it desires. Once the Company has
reached an agreement with an MSO, the Company works with local cable operators
within the MSO system to secure distribution of ME/U Knowledge TV on their
systems. In order to secure such distribution, the Company often provides
launch incentives to the operators, such as providing periods of free
programming and/or paying a marketing subsidy to the cable operator. The fees
payable by MSOs with respect to distribution vary depending upon the level of
distribution of the networks in the particular MSO's system and the size of the
MSO. The terms of affiliation

-36-

agreements with larger MSOs generally provide that the MSO can add or delete the
Company's programming in its discretion. The terms of the affiliation
agreements with smaller MSOs generally provide for distribution for a period of
three to five years and, in most cases, do not allow for the discretionary
deletion of the network once it is launched. In June 1995, the Company entered
into an affiliation agreement with Corporate Media Partners, d/b/a Americast, a
general partnership consisting of Ameritech New Media, Inc., Bell South Media
Ventures, Inc., GTE Media Ventures, Incorporated and SBC Interactive, Inc., that
provides for the distribution of ME/U Knowledge TV on video distribution
networks being established by these telecommunication companies. This
affiliation agreement contains terms similar to those of the affiliation
agreements with the larger MSOs.

Jones Computer Network. Launched in 1994, Jones Computer Network is a 24-
hour a day, satellite-delivered network that delivers programming focusing on
computers, communications, multimedia, software and related technologies. The
programming includes news programs and reports on the latest in computers and
technology, "how-to" shows offering information and instruction on operating
software programs, interviews with leaders in technological innovation, and
general interest shows relating to the current and future impact of computers
and other emerging technologies. The Jones Computer Network programming is also
distributed on ME/U Knowledge TV as part of its prime time programming block.
Jones Computer Network is currently available to approximately 1.2 million
households in the United States, approximately 85% of which households are in
cable television systems operated by Jones Intercable. The only cable systems
that are currently paying fees to the Company for distribution rights of Jones
Computer Network programming are those systems owned by Jones Intercable. The
remainder of these systems do not currently pay fees due to launch incentives
granted by the Company. The operators of these systems are scheduled to begin
paying fees at various dates commencing in 1997.

Program Syndication. The Company distributes educational programming
developed and produced by the Company or for which it has secured distribution
rights through domestic and international syndication agreements with satellite
and broadcast distribution systems. The licensing agreements generally provide
either for distribution of a specific program series or distribution of a block
of programming and may be either exclusive or non-exclusive. The Company
currently has licensing agreements relating to distribution of specific programs
in Canada, Brazil, Korea, Israel and Hong Kong. In addition, the Company has
agreements allowing it to provide programming blocks on distribution systems in
Thailand and China. Currently, approximately 20% and 50% of the programming
aired on ME/U Knowledge TV and Jones Computer Network, respectively, is
available for licensing by the Company. The Company views its licensing
arrangements as a means of increasing awareness of its education programming and
products and services and promoting its distance education degree and
certificate programs.

ADVERTISING

The Company has sold advertising on ME/U Knowledge TV since 1993 and on
Jones Computer Network since its launch in September 1994. The Company's
advertising revenues have been derived primarily from sales of long-form
advertising (infomercials) and, to a lesser extent, from sales of spot
advertising. Major advertisers on the Company's networks are generally
nationally known companies whose products are complementary to the content on
the Company's networks. The Company believes that the focused nature of its
programming enables a potential advertiser to effectively target a specific
demographic segment of viewers. In keeping with its role as a provider of
quality knowledge and academic programming, the Company does not carry
advertisements that it believes are inconsistent with the networks' programming
strategy.

-37-

Long-form advertising generally is 30 minutes in length. This form of
advertising is generally aired in the overnight hours. During 1995,
approximately 22% of ME/U Knowledge TV's average weekly programming was devoted
to long-form advertising and approximately 25% of Jones Computer Network's
average weekly programming was devoted to long-form advertising. An affiliate
of the Company earns a three percent commission on the sale of airtime for
infomercials on the Company's networks. See "Certain Relationships and Related
Transactions -- Sales Commissions."

Spot advertising consists primarily of 30-second commercials for products
and services. The Company sells spot advertising time to advertising agencies
representing national advertisers or directly to the advertisers themselves. In
1995, spot advertising accounted for 16% of total advertising revenues, with the
balance being comprised of long-form advertising.

EDUCATION PRODUCTS AND SERVICES

The Company's education products and services consist of distance education
degree and certificate courses, the services of its Education Services Center
and educational video and software products.

Distance Education Degree and Certificate Courses. In conjunction with
select universities and colleges, the Company produces and markets distance
education degree and certificate courses to adults. The Company currently
offers 17 degree and certificate programs, including four graduate degree
programs, six bachelor's degree completion programs, two associate of arts
programs and five certificate programs. The Company currently offers
approximately 170 courses through 11 accredited universities and colleges and
through the International University College, an affiliate of the Company
currently seeking accreditation. The following table summarizes the Company's
current distance education degree and certificate programs:

ENROLLMENTS PRICE PER
JANUARY 1- CREDIT HOURS CREDIT
PROGRAM INSTITUTION JUNE 30, 1996 REQUIRED HOUR/(1)/
- ------- ----------- ------------- -------- ---------

GRADUATE DEGREE PROGRAMS

Master's Degree in
Educational Technology The George Washington
Leadership University 505 36 $238

Master of Arts in International University
Business Communication College 114 35 $163

Master of Business University of Colorado -
Administration Colorado Springs __/(2)/ 36 $235

Master of Public University of Colorado -
Administration Colorado Springs __/(2)/ 36 $235
-----
Total Graduate Degree Program Enrollment 619
=====

BACHELOR'S DEGREE COMPLETION PROGRAMS

Bachelor of Science in
Business Administration Regis University 799 128/(3)/ $185/(4)/

-38-

ENROLLMENTS PRICE PER
JANUARY 1- CREDIT HOURS CREDIT
PROGRAM INSTITUTION JUNE 30, 1996 REQUIRED HOUR/(1)/
- ------- ----------- ------------- -------- ---------

Bachelor of Science in California State
Nursing University at
Dominguez Hills 719 126/(3)/ $210

Bachelor of Arts in Washington State
Social Sciences University 269 120/(3)/ $182

Bachelor of Science in
Animal Sciences and
Industry Kansas State University 41 127/(3)/ $180

Bachelor of Science in
Human Resources with a
Major in Hotel,
Restaurant and
Institutional Management University of Delaware 16 120/(3)/ $195

Bachelor of Arts in International University
Business Communication College 12 120/(3)/ $163
-------
Total Bachelor's Degree Completion Program
Enrollment 1,856
=======

ASSOCIATE OF ARTS DEGREE PROGRAMS

Associate of Arts
Colorado Electronic
Community College/
Arapahoe Community
College 186 60 $147

Associate of Arts Seattle Central
Community College 152 90 $ 94
------
Total Associate of Arts Degree Program
Enrollment 338
======

CERTIFICATE PROGRAMS

Early Reading University of Colorado -
Instruction Colorado Springs 41 8 $125

Advanced Oral
and Written International University
Communication Skills College 1 6 $163

Business Technologies International University
College __/(5)/ 6 $163

Oral and Written International University
Communication Skills College 4 6 $163

-39-

ENROLLMENTS CREDIT PRICE PER
JANUARY 1- HOURS CREDIT
PROGRAM INSTITUTION JUNE 30, 1996 REQUIRED HOUR (1)
- ------- ----------- ------------- -------- ---------

Organizational International University
Communication College -- /(5)/ 6 $163
------

Total Certificate Program Enrollment 46
======

_______________________

(1) Includes tuition registration fees.

(2) These programs are first being offered in September 1996.

(3) The total number of required credit hours listed for bachelor degree
completion programs includes credit hours earned by the student prior to
enrollment in the program. The prior credit hours required before
enrollment in these programs range from 27 to 60.

(4) Colorado residents pay $197 per credit hour.

(5) International University College has not yet marketed this certificate
program.

The Company attempts to identify and offer distance education degree and
certificate courses that will attract students and address their educational
needs. The Company conducts surveys among adults to attempt to identify which
courses or programs are of interest to them. The Company then attempts to
identify and establish relationships with educational institutions that offer
degree or certificate programs in the area of interest.

The Company seeks affiliations with accredited universities and colleges
that have strong reputations, expertise in the subject matter in which the
degree or certificate is offered, and the willingness and ability to design
courses that enable effective education to occur beyond the confines of the
classroom. The courses and degree programs offered through the Company are
designed and taught by the faculty of the university or college offering the
course and are produced with assistance from the Company in a manner designed to
be appealing and engaging. Individuals who successfully complete any course
taken for credit or any degree program receive credit from the participating
university or college.

The courses and the degree and certificate programs offered by the Company
are specifically designed for the distance education market and are accessible
through videotapes, television, print material, the Internet and other
interactive multimedia methods. Currently, a typical course package includes
videotapes, print materials (study guides, textbooks and reference materials),
and telecommunication connections such as voice-mail and the Internet. Students
interact with course instructors and/or other class members on a regular basis
through the telephone and the Internet. All course assignments are submitted to
the institution by the students either through the mail or electronically, and
grades and comments on such assignments are similarly returned by the faculty to
the students. Proctored testing occurs at locations arranged by the university
or college that are convenient to the student's location, such as a local
college. Testing also occurs through "take home" exams that are submitted in
the same manner as class assignments.

The Company first enrolled students in its courses in January 1988 and
since that time, approximately 6,400 students have completed approximately
15,000 courses. Approximately 135 students have graduated from degree programs,
including approximately 95 who have received masters degrees and approximately
40 who have received bachelors degrees. As of June 30, 1996, approximately 90%
of students enrolled in a course offered through the Company are pursuing one of
the 12 available degree programs. During 1996, approximately 74% of the
students who have

-40-

enrolled in a course or degree program through the Company have been between the
ages of 26 and 45, and approximately 65% of these students were women. The
largest concentration of the Company's students has come from the states of
Colorado and California, although the Company has had students from each of the
50 states and from 16 foreign countries.

Education Services Center. The Company's Education Services Center
recruits, enrolls, and provides course and other materials and customer service
to the Company's students. Service representatives at the Education Services
Center respond to inquiries and distribute enrollment forms. Once a student is
accepted into a course or degree program, the Educational Services Center
supplies the student with appropriate course materials and establishes any
Internet or other electronic connection required for participation in such
course. Each student is billed according to the products and services ordered.
The Education Services Center performs collections and remittance functions on
behalf of the applicable program or service provider. In addition, customers
are subsequently contacted in an effort to determine satisfaction with the
products and services offered. During 1995, the Company's Education Services
Center processed approximately 4,600 course enrollments and sold approximately
33,000 educational products.

Educational Video and Software Products. The Company, through the ME/U
Knowledge Store, offers a wide variety of software and other learning tools.
The Company currently offers approximately 250 products with the majority of the
products sold ranging in price between $50 and $75. Each product is designed to
educate the consumer in a specific topic or skill within the applicable subject
matter area. Examples of such education products include Video Software School,
a videotape series designed to improve computing skills and to serve as a
reference source for computer users; More Simply Spanish, a videotape series
designed to teach Spanish in a conversational setting through vocabulary and
activities; and Adults in Transition, a series for adults who want to
investigate new career opportunities. These products are marketed principally
through ME/U Knowledge TV and a catalog published and distributed by the
Company.

SALES AND MARKETING

The Company markets its combination of programming, products and services
as an integrated package designed to provide a broad selection of high-quality
education and training tools. The Company's sales and marketing efforts
endeavor to take advantage of cross-promotional opportunities made available by
the Company's multiple and complementary distribution channels. In addition to
the sales associates disclosed below, the Company has 11 general marketing
associates who support network distribution, advertising sales and the marketing
of education products and services.

The Company employs a 21 person sales force that targets cable television
operators and other video program distributors in order to increase distribution
of ME/U Knowledge TV and Jones Computer Network. The Company's marketing
activities with respect to programming distribution typically consist of making
presentations, placing print ads in trade publications and undertaking
promotional activities at trade shows. Additionally, the Company promotes its
networks to cable operators through launch incentives, including payments to
cable operators for direct mailings, advertising and community-oriented events.
The Company also employs a three person sales force that targets advertisers
whose products are complementary to the knowledge-enhancing content of the
programming on its networks.

-41-

In order to attract students, the Company uses its networks to coordinate
sales and marketing campaigns designed to encourage viewers to enroll in the
Company's distance education degree and certificate courses. The Company's
research indicates that approximately 70% of the students who have enrolled in
courses offered through the Company first became aware of the course offerings
through viewing ME/U Knowledge TV and approximately 20% of such students first
became aware of the Company's course offerings through referrals. The Company
currently dedicates approximately 20% of its total spot advertising time to the
promotion and advertising of its distance education courses. In addition, the
Company promotes its education products and services through its half-hour
program, ME/U User Guide, which airs daily Monday through Saturday. Although
the Company has previously advertised its distance education programs
exclusively on its networks, it plans to advertise its distance education degree
and certificate courses on other networks in the future. In addition to network
advertising, the Company uses catalogs and direct mail targeted to specific
groups such as associations, educators, professionals and human resource
executives, as well as print advertisements and telemarketing campaigns, to
promote the Company's education products and services.

The Company has developed a Web site, ME/U Knowledge Online,
http://www.meu.edu, on the Internet that allows electronic access to information
concerning the Company and its products. The web site also provides avenues for
users to explore education opportunities, enroll in courses, review ME/U
Knowledge TV and Jones Computer Network programming schedules and purchase
education products.

COMPETITION

The Company faces competition from a variety of sources, including cable
and broadcast television programmers, universities and colleges that deliver
education and training to distant locations and independent education and
training companies that package and distribute programs through various media.
Many of the Company's competitors have greater financial and other resources
than the Company. While the Company believes that its approach of offering a
variety of products and services through an integrated combination of
technologies, combined with its ability to use its networks to encourage adults
to pursue further education through the Company, is distinctive, there can be no
assurance that the Company will be able to compete effectively in the future.

Cable and Broadcast Television Programmers. The Company faces intense
competition from other networks for channel space on cable television
distribution systems and other broadcast and satellite distribution networks.
The Company also competes with these networks for both viewers and advertisers.
The Company believes that there are currently over 100 programming services
competing for limited space on the existing distribution systems, as well as for
viewers and advertising dollars. Several of these programmers target an
audience similar to that targeted by the Company, including The Discovery
Channel, Arts & Entertainment, The History Channel, The Learning Channel, CNBC,
CNN, MSNBC, Fox News Channel, Home and Garden TV and the Public Broadcasting
System, among others.

Universities and Colleges. Various institutions offer education and
training, both on-site and at a distance, including the University of Phoenix
and many other universities and colleges. These institutions typically offer
courses or programs either at satellite campuses or at distant locations to
which students must travel. In addition, these institutions typically offer
only their own courses rather than courses from multiple institutions. The
Company believes, however, that there are low barriers to entry in the distance
education market for most universities and colleges. As a result, the Company
may face increased competition in this market in the future.

-42-

Independent Education and Training Companies. There are a large number of
independent education and training companies. Similar to universities and
colleges, these companies generally provide programs in a site-based manner.
However, there can be no assurance that these companies will not develop
capabilities similar to the Company's in the future or that the Company's
products and course offerings will be preferred by consumers.

INTELLECTUAL PROPERTY

The Company owns all rights to the original programming that it develops
and produces and it generally owns distribution rights in most domestic and
international markets to the educational programming and products developed in
conjunction with participating universities and colleges. With respect to
programming licensed by the Company for distribution on its networks, the
Company generally acquires the right to air such programming on its networks
multiple times during a specified license period.

The Company has also developed proprietary information systems to support
the operation of its business. It relies primarily on a combination of
statutory and common law copyright, trademark and trade secret laws and other
methods to protect these proprietary rights. The Company uses a variety of
federal and state registered trademarks and trade names in its business.
Certain of these trademarks and trade names are owned by Jones International,
the majority shareholder of the Company, and are licensed to the Company at no
charge for use by the Company in connection with its business. The Company
believes that the trademarks and trade names that it currently uses are not
material to its business. See "Risk Factors --- Intellectual Property."

ASSOCIATES

The Company refers to its employees as associates. As of June 30, 1996,
the Company had 74 full-time associates. Of these associates, 29 work in
network sales and programming, 21 in the Education Services Center, 11 in
marketing and 13 in operations, executive and administrative positions with the
Company. None of the Company's associates are covered by a collective
bargaining agreement, and the Company believes its employee relations to be
good. See "Risk Factors --- Dependence upon Key Personnel."

FACILITIES AND LEASES

The Company's offices and its Education Services Center are located in
Englewood, Colorado in facilities leased by the Company from certain of its
affiliates. The Company believes that its offices and Education Services Center
facilities are adequate to meet its current needs. The Company also leases
transponder space on the domestic communications satellites on which ME/U
Knowledge TV and Jones Computer Network are distributed from an affiliate. See
"Certain Relationships and Related Transactions --- Office Lease and ---
Transponder Agreements."

REGULATION

To date, the Company has not been subject to any material regulation
regarding its programming or its method of operations. Certain states assert
authority to regulate non-degree granting education providers if their
educational programs are available to that state's residents. Generally, the
Company is exempt from such regulation because the Company contracts with the
universities and colleges offering the courses and does not participate in any
federal or state student

-43-

aid/loan programs. However, in the future, state laws and regulations could
affect the Company's operations and might limit the ability of the Company to
distribute educational services in certain states. Additionally, there may be
foreign regulatory requirements which must be met in order to provide
programming in the international markets and there can be no assurance that such
requirements can be met. See "Risk Factors --- Government Regulation."

LITIGATION

The Company is involved in routine legal proceedings incident to the
ordinary course of its business. The Company believes that the outcome of all
such routine legal proceedings in the aggregate will not have a material adverse
effect on the Company.

-44-

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The Company's directors and executive officers are as follows:

NAME AGE POSITION
---- --- --------

Glenn R. Jones 66 Chairman of the Board and Chief Executive Officer

Wallace W. Griffin 57 President and Director

Scott A. Wheeler 37 Group Vice President/Operations and Director

Paul R. Amos 43 Vice President/International Business Development

Ilene B. Block 44 Group Vice President/Marketing

Stephanie L. Garcia 34 Vice President/Chief Financial Officer

James P. Honiotes 38 Vice President/Distribution

Elizabeth M. Steele 44 Vice President and Secretary

Keith D. Thompson 29 Chief Accounting Officer

Barbara B. Lawton 41 Director

Siim A. Vanaselja 40 Director

Robert J. Malone 52 Director

Glenn R. Jones has served as Chairman of the Board of Directors and Chief
Executive Officer of the Company since it was founded in 1990. Mr. Jones has
been involved in the cable television business in various capacities since 1961
and currently serves as a director and/or executive officer of many of the
Company's affiliates, including as Chief Executive Officer and a director of
Jones Intercable, one of the ten largest MSOs in the United States, and as a
director and vice chairman of BCI and a director of Bell Cablemedia plc, an
affiliate of BCI. Mr. Jones will continue to devote a substantial amount of his
time to the Company's affiliates. Mr. Jones serves on the Board of Directors
and the Executive Committee of the National Cable Television Association, the
Board of Governors for the American Society for Training and Development, the
Board of Education Council of the National Alliance of Business and on the James
Madison Council of the Library of Congress, and has served on the Executive
Committee of Cable in the Classroom, an organization dedicated to education via
cable television. Mr. Jones has been the recipient of numerous awards during
his career, including the 1993 Most Outstanding Corporate Individual Achievement
award from the International Distance Learning Conference and the 1994 Golden
Plate Award for his advances in distance education from the American Academy of
Achievement. In 1994, Mr. Jones was inducted into Broadcasting and Cable's Hall
of Fame. Mr. Jones received a B.S. in Economics from Allegheny College and a
J.D. from the University of Colorado School of Law.

Wallace W. Griffin has served as President and as a director of the Company
since April 1995. From April 1995 to August 1996, Mr. Griffin also served as an
executive officer of Jones Digital Century, Inc., an electronic publishing
company, Jones Interactive, Inc., a computer support services company, Jones
Lightwave, Ltd., an alternate access provider, and Jones Digital Empire, Inc.,
an Internet distribution and content provider, each of which is an affiliate of
the Company. From July 1994 to April 1995, Mr. Griffin served as President of
Jones Futurex, Inc., an affiliate of the Company engaged in contract
manufacturing. From April 1992 to the present, he has served as a director of
Ddx, Inc., a Colorado-based company that conducts various food diagnostic tests.
From

-45-

June 1992 to June 1994, he served as Chief Operating Officer of that company.
Mr. Griffin was employed for thirty years in various management positions at US
West, Inc., including serving as President and Chief Executive Officer of its
Marketing Resources Group from 1987 to June 1992. Mr. Griffin holds a B.S.
Degree in Electrical Engineering from The University of North Dakota and has
participated in executive management training programs at Harvard University,
The Brookings Institute and The Menninger Foundation.

Scott A. Wheeler has served as Group Vice President/Operations of the
Company since April 1995 and as a director of the Company since August 1996.
Mr. Wheeler has been associated with the Jones International group of companies
since 1984, including serving as the Company's Vice President/Business Services
from March 1994 to March 1995 and as the Assistant to the President of Jones
Intercable from March 1990 to February 1994. Mr. Wheeler received a B.S. in
Accounting from the University of Wyoming and a Masters in Telecommunications
from the University of Denver and is a Certified Public Accountant in the State
of Colorado.

Paul R. Amos has served as a Vice President of the Company since February
1996 and as Vice President/International Business Development and as a director
of the Company since August 1996. From September 1995 to February 1996, Mr.
Amos served as Vice President, Studio Operations, of King World Productions and
from April 1995 to September 1995, as an independent media and technology
consultant. Mr. Amos founded HCTV, Inc. (d/b/a The Health Channel) in March
1993 and served as its President from March 1993 to April 1995. From March 1980
to May 1991, Mr. Amos was employed in various capacities by CNN, including as an
Executive Vice President from 1988 to May 1991. Mr. Amos received his B.A. in
Mass Communications from Loyola University, New Orleans.

Ilene B. Block has served as Group Vice President/Marketing of the Company
since January 1996. From October 1993 to March 1995, Ms. Block served as Senior
Vice President Marketing, Executive Committee, with VICORP Restaurants, Inc., a
restaurant holding company based in Denver, Colorado. From August 1992 to
September 1993, Ms. Block was Vice President, Director of Client Services of
Henry Gill Silverman, a Denver, Colorado based advertising agency. From 1982
until joining Henry Gill Silverman, Ms. Block was a Senior Partner, Executive
Management Committee, with the advertising agency of Tatham Euro RSCG in
Chicago, Illinois. Ms. Block received an MBA from the University of Chicago and
an MFA and BFA from the California Institute of the Arts. In 1973, Ms. Block
received a Fulbright Scholarship to study as a master's apprentice in a glass
factory in Riihimaki, Finland.

Stephanie L. Garcia has served as Vice President/Chief Financial Officer of
the Company since July 1996. Ms. Garcia has been associated with the Jones
International group of companies since September 1992, serving as Group Vice
President, Finance and Operations for Jones Digital Century, Inc. from March
1995 to July 1996, Vice President of Financial Analysis and Business Development
for the Company from April 1994 to February 1995, Director of Operations for the
Product Information Network from October 1993 to March 1994 and as an Operations
Manager for Jones Intercable from September 1992 to September 1993. From June
1992 to August 1992, Ms. Garcia was an Operations Manager at US West, Inc.
specializing in international cable property investments and management. Ms.
Garcia received an MBA from the Amos Tuck Business School at Dartmouth College
and a B.S. in Business Administration from the University of Colorado.

James P. Honiotes has served as Vice President/Domestic Distribution of the
Company since April 1995. From 1981 to April 1995, Mr. Honiotes served in a
variety of management, marketing

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and sales positions for Jones Intercable, including as general manager of its
Colorado operations from 1990 to April 1995. Mr. Honiotes is a past President of
the Colorado Cable Television Association. Mr. Honiotes received a B.S. in
Business Administration from Regis University.

Elizabeth M. Steele has served as Vice President and Secretary of the
Company since it was founded in July 1990. Ms. Steele has also served as Vice
President/General Counsel and Secretary of Jones Intercable, as well as general
counsel to certain of Jones Intercable's and the Company's affiliates since
1987. Ms. Steele will continue to devote a significant amount of her time to
these affiliates. From 1980 through 1987, Ms. Steele practiced law with the
Denver law firm of Davis, Graham & Stubbs LLP, where she was elected a partner
in 1985. Ms. Steele received a B.A. in History from Hamilton College and J.D.
from the University of New Mexico.

Keith D. Thompson has served as Chief Accounting Officer of the Company
since August 1996. Mr. Thompson has also been associated with Jones
International since October 1994, serving as a Senior Accountant from October
1994 to April 1995, as an Accounting Manager from April 1995 to January 1996 and
as Director of Accounting from January 1996 to the present. Mr. Thompson will
continue to devote a substantial amount of his time to Jones International.
From July 1989 to October 1994, Mr. Thompson was an auditor for Deloitte &
Touche LLP. Mr. Thompson received a B.S. in Accounting from Oral Roberts
University and is a Certified Public Accountant in the State of Colorado.

Barbara B. Lawton has served as a director of the Company since August
1996. Since 1993 she has been a W. Edward Deming Professor of Management at the
University of Colorado. From 1992 to 1993, Dr. Lawton was president of The
Deming Foundation, a non-profit educational institution. From 1989 to 1992, Dr.
Lawton served as Corporate Director of Total Quality of Albany International
Corporation, a manufacturing company, and from 1985 to 1989 was a senior
statistician for Rockwell International. Dr. Lawton received a Ph.D. in
Statistics from the University of Wyoming, an M.A. in Statistics from The
Pennsylvania State University and a B.S. in Biology from The American
University. Dr. Lawton has also completed the Executive Program in Business
Administration at Columbia University.

Siim A. Vanaselja has served as a director of the Company since August
1996. Since August 1996, Mr. Vanaselja has served as Chief Financial Officer of
BCI. From February 1994 to August 1996, Mr. Vanaselja served as an officer of
BCE, Inc., Canada's largest telecommunications company and the corporate parent
of BCI, including as Vice-President, Taxation from February 1995 to August 1996,
as Assistant Vice-President and Director of Taxation from June 1994 to February
1995, and as Assistant Vice-President of International Taxation from February
1994 to June 1994. From August 1989 to February 1994, Mr. Vanaselja was a
partner in the Toronto office of KPMG Peat Marwick Thorne.

Robert J. Malone has served as a director of the Company since August 1996.
Since December 1992, he has served as Chairman of the Board of Colorado National
Bank, Denver and Chairman of the Board and Chief Executive Officer of Colorado
National Bankshares, Inc., a national bank holding company. From March 1990 to
December 1992, Mr. Malone was Chairman of the Board, President and Chief
Executive Officer of Western Capital Investment Corporation and its principal
subsidiary, Bank Western. From 1984 to 1990, he was President and Chief
Executive Officer of First Interstate Bank of Denver. Mr. Malone received an
M.B.A. from the University of Southern California and an A.B. from Loyola
University, Los Angeles.

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All directors serve for a term of one year and until their successors are
duly elected. Executive officers of the Company serve at the discretion of the
Board of Directors.

COMMITTEES

The Board of Directors established an Executive Committee, a Compensation
Committee, an Executive Officer Stock Option Committee and an Audit Committee in
August 1996. The Executive Committee consists of Messrs. Jones, Griffin and
Vanaselja and is responsible for acting in the Board's stead, except where
action by the full Board of Directors is required by law or the Company's
articles of incorporation or bylaws. The Compensation Committee consists of
Messrs. Jones, Malone and Vanaselja and is responsible for recommending which
employees (other than the executive officers) will receive awards under the
Stock Option Plan and the salaries for senior management to the Company's Board
of Directors. The Executive Officer Stock Option Committee consists of Messrs.
Malone and Vanaselja and Ms. Lawton and selects which executive officers will
receive awards under the Stock Option Plan. The Audit Committee consists of
Messrs. Malone, Wheeler and Vanaselja and is responsible for meeting
periodically with representatives of the Company's independent auditors to
review the general scope of audit coverage, including consideration of the
Company's accounting practices and procedures and system of internal accounting
controls, and to report to the Board with respect thereto. The Audit Committee
also recommends to the Board of Directors the appointment of the Company's
independent auditors.

DIRECTORS' COMPENSATION

Directors who are not officers of the Company will receive $2,500 per
quarter for services rendered as a director and $500 for attending each meeting
of the Board of Directors or one of its Committees. Directors who are also
officers of the Company will not be paid any director fees. All directors are
reimbursed for their expenses in attending Board and Committee meetings.

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EXECUTIVE COMPENSATION

The following table sets forth certain information regarding the
compensation for services in all capacities to the Company for the year ended
December 31, 1995 for the Chief Executive Officer of the Company and the one
other executive officer of the Company whose annual salary and bonus exceeded
$100,000 during such period (collectively, the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

Annual Compensation All Other
------------------------
Name and Principal Position Salary ($) Bonus ($) Compensation ($)
- --------------------------- ---------- ----------- ----------------

Glenn R. Jones/(1)/.......... 0 0 0
Chairman of the Board and
Chief Executive Officer

Wallace W. Griffin/(2)/...... $93,925 $60,000 $14,125/(3)/
President and Director

____________________

(1) Mr. Jones has not received any compensation for services rendered to the
Company in the past. Mr. Jones served as an executive officer of certain of
the Company's affiliates during 1995 and has served and will continue to
serve these affiliates in 1996. The Company expects that it will pay Mr.
Jones an annual salary of $75,000 in 1996.

(2) Mr. Griffin's total compensation for services rendered to the Company during
the year ended December 31, 1995 represents an allocation of the total
compensation paid to Mr. Griffin by Jones International for this period
based upon the time he dedicated to the Company's business. Mr. Griffin
served as an executive officer of certain of the Company's affiliates during
1995 and has served these affiliates in 1996. Subsequent to the close of
this Offering, Mr. Griffin will devote substantially all of his time to the
business of the Company. The Company expects that it will pay Mr. Griffin
an annual salary of $250,000 in 1996.

(3) Represents an allocation of amounts paid to Mr. Griffin under the Jones
Intercable Deferred Compensation Plan.

The Company expects that it will pay each of Messrs. Griffin, Wheeler, Amos
and Honiotes and Msses. Block and Garcia an annual salary and bonus in excess of
$100,000 for services rendered to the Company in 1996 (pro-rated for their
respective time of service with the Company in 1996).

STOCK OPTION PLAN

The Company has adopted an employee stock option plan (the "Plan") that
provides for the grant of stock options and stock appreciation rights ("SARs")
to employees or individuals providing services to the Company. The Plan is
construed, interpreted and administered by the Compensation Committee (the
"Committee") of the Board of Directors. The Committee (or the Executive Stock
Option Committee, in the case of grants of stock options or SARs to executive
officers) determines the individuals to whom options are granted, the number of
shares subject to the options, the exercise price of the options (which may be
below fair market value of the stock on the date of grant), the period over
which the options become exercisable and the term of the options. The Committee

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and/or Executive Stock Option Committee has the discretion to set other terms
and provisions of stock options as it may determine from time to time, subject
only to the provisions of the Plan.

Under the Plan, the Committee and/or Executive Stock Option Committee may
grant options to purchase an aggregate of up to 1,100,000 shares of the
Company's Class A Common Stock. The number of shares available for grant of
options under the Plan and the number of shares included in each outstanding
option are subject to adjustment upon recapitalizations, stock splits or other
similar events that cause changes in the Company's Class A Common Stock. Shares
of Class A Common Stock underlying options that expire unexercised are available
for future option grants under the Plan.

The Plan provides for the grant of incentive stock options ("Incentive
Options") within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and non-statutory stock options that do not
qualify as incentive stock options under Section 422 of the Code ("Non-Qualified
Options"). Options granted may be either Incentive Options or Non-Qualified
Options or a combination of the two. The exercise price of each Incentive
Option granted must be at least equal to the fair market value of the Class A
Common Stock on the date the Incentive Option is granted. The exercise price of
Non-Qualified Options may be less than the fair market value of the Class A
Common Stock on the date the Non-Qualified Option is granted. If an Incentive
Option is granted to an employee who then owns stock possessing 10% of the total
combined voting power of all classes of stock of the Company, the exercise price
of the Incentive Option must be at least equal to 110% of the fair market value
of the Class A Common Stock on the date the Incentive Option is granted.

The maximum term of options granted under the Plan is generally ten years,
but with respect to an Incentive Option granted to an employee who then owns
stock possessing 10% of the total combined voting power of all classes of stock
of the Company, the maximum term of the option is five years. Subject to the
foregoing limitation, the Committee determines the term of the options and the
period over which they vest and become exercisable.

The Committee and/or Executive Stock Option Committee may also grant SARs
in tandem with options granted under the Plan. Each SAR entitles the
participant, upon the exercise of the SAR, to receive the excess of the fair
market value of a share of Class A Common Stock on the exercise date over the
fair market value of the share on the date the SAR was granted. An SAR is
exercisable only to the extent the associated stock option is exercisable. To
the extent the option is exercised, the accompanying SAR will cease to be
exercisable, and vice versa. An SAR may be exercised only when the market price
of Class A Common Stock subject to the option exceeds the exercise price of such
option.

Options and associated SARs are not transferable, except by will or
pursuant to the laws of descent and distribution, and are exercisable only by
the option holder during his lifetime or, in the event of disability or
incapacity, by the option holder's guardian or legal representative.

The vesting of options and associated SARs is accelerated upon a "Change in
Control" of the Company. A Change in Control is deemed to have occurred if (a)
a person (as such term is used in Section 13(d) of the Exchange Act) becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, in one or more transactions, of shares of Class A Common Stock
and/or Class B Common Stock of the Company representing 35% or more of the total
number of votes that may be cast by all shareholders of the Company voting as a
single class, without the approval or consent of the Company's Board of
Directors, or (b) there is a consolidation or merger of

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the Company in which the Company is not the surviving corporation or (c) a plan
or proposal for the liquidation or dissolution of the Company is adopted.

The Board may amend the Plan at any time or may terminate it without the
approval of the shareholders; provided, however, that shareholder approval is
required for any amendment to the Plan that increases the number of shares for
which options may be granted, materially increases the benefits accruing to
participants in the plan or materially modifies the eligibility requirements for
participation in the Plan. However, no action by the Board or shareholders may
alter or impair any option previously granted without the consent of the
optionee.

As of August 30, 1996, the Company had not granted any SARs or options to
purchase shares of its Class A Common Stock under the Plan. The Company
anticipates granting stock options to certain of its officers and employees
prior to the completion of this Offering.

Certain Federal Income Tax Consequences. The following discussion, which
is based on the law as in effect on June 30, 1996, summarizes certain federal
income tax consequences of participation in the Plan. The summary does not
purport to cover federal employment tax or other federal tax consequences that
may be associated with the Plan, nor does it cover state, local or non-U.S.
taxes.

In general, an optionee realizes no taxable income upon the grant or
exercise of an Incentive Option. However, the exercise of an Incentive Option
may result in an alternative minimum tax liability to the optionee. With
certain exceptions, a disposition of shares purchased under an Incentive Option
within two years from the date of grant or within one year after exercise
produces ordinary income to the optionee (and a corresponding deduction is
available to the Company) equal to the value of the shares at the time of
exercise less the exercise price. Any additional gain recognized in the
disposition is treated as a capital gain for which the Company is not entitled
to a deduction. If the optionee does not dispose of the shares until after the
expiration of these one- and two-year holding periods, any gain or loss
recognized upon a subsequent sale is treated as a long-term capital gain or loss
for which the Company is not entitled to a deduction.

In general, in the case of a Non-Qualified Option, the optionee has no
taxable income at the time of grant if the option price is equal to the fair
market value of the Shares at date of grant, but realizes ordinary income in
connection with exercise of the option in an amount equal to the excess (at the
time of exercise) of the fair market value of the shares acquired upon exercise
over the option price, a corresponding deduction is available to the Company,
and upon a subsequent sale or exchange of the shares, appreciation or
depreciation after the date of exercise is treated as capital gain or loss for
which the Company is not entitled to a deduction. In general, an Incentive
Option that is exercised more than three months after termination of employment
(other than termination by reason of death) is treated as a Non-Qualified
Option. Incentive Options are also treated as Non-Qualified Options to the
extent they first become exercisable by an individual in any calendar year for
shares having a fair market value (determined as of the date of grant) in excess
of $100,000.

The grant of SARs has no federal income tax consequences at the time of
grant. Upon the exercise of SARs, the amount received is generally taxable as
ordinary income, and the Company is entitled to a corresponding deduction.

Under the so-called "golden parachute" provisions of the Code, the vesting
or accelerated exercisability of awards in connection with a Change in Control
of the Company may be required to

-51-

be valued and taken into account in determining whether participants have
received compensatory payments, contingent on the Change in Control, in excess
of certain limits. If these limits are exceeded, a substantial portion of
amounts payable to the participant, including income recognized by reason of the
grant, vesting or exercise of awards under the Plan, may be subject to an
additional 20% federal tax and may be nondeductible to the Company.

The foregoing constitutes a brief summary of the principal federal income
tax consequences related to the grant and exercise of stock options and SARs
based on current federal income tax laws. This summary is not intended to be
exhaustive and does not describe state, local or foreign tax consequences.
Recipients of stock options or SARs under the Plan are urged to consult their
own tax advisors with respect to the consequences of their participation in the
Plan.

EMPLOYEE INVESTMENT 401(K) PLAN

In 1990, the Company's employees became eligible to participate in an
Employee Profit Sharing/Retirement Savings Plan (the "401(k) Plan"). Under the
401(k) Plan, eligible employees are permitted to defer receipt of up to 20% of
their monthly compensation, subject to a limit prescribed by statute. The
Company currently matches 50% of the employees' deferrals up to a maximum of 6%
of their monthly base pay. The Company's contribution vests immediately.
Subject to certain restrictions, contributions to the 401(k) Plan are invested
by the trustees of the 401(k) Plan in accordance with the directions of each
participant. All employees of the Company who earn 1,000 hours of credited
service over one year are eligible to participate in the 401(k) Plan on the
first day of the January or July next following the date that the eligibility
requirement has been met.

Participants or their beneficiaries are entitled to payment of benefits (i)
upon retirement either at or after age 65, (ii) upon death or disability or
(iii) upon termination of employment, if the participant elects to receive a
distribution of his account balance. In addition, hardship distributions and
loans to participants from the 401(k) Plan are available under certain
circumstances. The amount of benefits ultimately payable to a participant under
the 401(k) Plan will depend on the performance of the investments to which
contributions are made on the participant's behalf. During 1995, the Company
contributed approximately $55,000 to the 401(k) Plan on behalf of its employees.

DEFERRED COMPENSATION PLAN

In 1995, certain of the Company's key employees became eligible to
participate in a Deferred Compensation Plan (the "Deferred Compensation Plan").
Key employees eligible to participate in the Deferred Compensation Plan
constitute a select group of highly compensated or management personnel and are
selected by the Compensation Committee of the Company. Under the Deferred
Compensation Plan, key employees are permitted to defer receipt of 100% of their
annual compensation. The Company currently matches the key employees' deferrals
up to a maximum of 6% of their contributions. The funds are deposited with
Norwest Bank Colorado, NA, as Trustee of the Deferred Compensation Plan's Public
Trust, and they are invested in a number of pre-selected investment funds. Both
the key employees' contributions and the Company's contributions are at all
times subject to the claims of the Company's general creditors.

Key employees who participate in the Deferred Compensation Plan receive a
distribution of their contributions, the Company's contributions, and earnings
attributable to those contributions on their separation from employment with the
Company or their death. The Deferred Compensation Plan also permits hardship
distributions in certain circumstances. The amount of benefits ultimately

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payable to a key employee participant depends upon the performance of the
investment funds held by the trust. During 1995, the Company contributed
approximately $30,000 to the Deferred Compensation Plan on behalf of its key
employees.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company established a Compensation Committee and an Executive Stock
Option Plan Committee in August 1996. The Compensation Committee consists of
Messrs. Jones, Malone and Vanaselja. The Executive Stock Option Committee
consists of Messrs. Malone and Vanaselja and Ms. Lawton. During 1995, the
Company's Board of Directors set the compensation of the Company's executive
officers and was comprised of, at various times, Mr. Jones, Mr. Griffin, Gregory
Liptak, Bernard J. Luskin, Reynie U. Ortiz, Donald A. Sutton and Daniel E.
Somers.

Messrs. Jones, Griffin, Liptak, Luskin, Ortiz and Sutton served as
executive officers of the Company and certain of its subsidiaries, and also
served as directors and officers of a number of the Company's affiliates during
1995. As individuals, the Company's executive officers and directors had no
reportable transactions with the Company. See "Certain Relationships and
Related Transactions" for a discussion of certain transactions between the
Company and its affiliates.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

INVESTMENTS AND ADVANCES BY AFFILIATES

From the Company's inception, it has relied primarily on advances from
Jones International and Jones Intercable to fund the Company's operating and
investment activities. These advances accrue interest at the published prime
rate plus 2% (approximately 11% in 1995). The Company paid interest of
approximately $695,000, $541,000 and $1.1 million to Jones International in
1993, 1994 and 1995, respectively, in connection with these advances. The
largest total amount of outstanding advances from Jones International in 1995
was approximately $11.6 million in April 1995. At August 15, 1996, advances
from Jones International totaled approximately $3.8 million. The Company
intends to repay the $1.4 million long-term portion of these advances upon the
closing of this Offering. See "Use of Proceeds." Following the completion of
this Offering, any advances from Jones International to fund the Company's
operating activities, which advances are not expected to be material, will bear
interest at or below market rates.

In March 1996, the Company issued 144,210 shares of Class A Common Stock
and 144,210 shares of Class B Common Stock to Jones International to repay $6.3
million owed to Jones International.

Prior to 1995, Jones Intercable advanced $20 million to the Company's
subsidiary, Mind Extension University. Prior to the conversion of the advance
into Class A Common Stock (as described below), the advance accrued interest at
Jones Intercable's weighted average cost of borrowing plus 2% (approximately 11%
in 1995). The total interest paid by the Company to Jones Intercable on this
advance totalled approximately $300,000, $2,094,000 and $704,000 for 1993, 1994
and 1995, respectively. The largest total amount of outstanding advances from
Jones Intercable in 1995 was $20 million in April 1995. On April 10, 1995, the
Company issued shares of Class A Common Stock to Jones Intercable representing a
then 16.7% interest in the Company to repay the entire $20 million advance.

On December 20, 1994, BCI purchased an approximately 30% economic interest
in Jones Intercable. In connection with this investment, BCI also purchased an
approximately 15% economic interest in the Company for $18 million. At that
time, BCI entered into a shareholders agreement with the Company, Jones
International and Glenn R. Jones that, among other things, grants to BCI and its
affiliates certain registration rights with respect to the Company's capital
stock. See "Shares Eligible for Future Sale."

LOANS TO AFFILIATES

In April 1996, the Company and Mind Extension University each agreed to
loan $166,667 (for a total of $333,334) to The International Community College
("ICC"), a non-profit entity of which the Company and Mind Extension University
are members. Interest accrues on these loans at the rate of 10% per annum. The
loans provide that ICC will make quarterly principal and interest payments of
$41,667 to each of the Company and Mind Extension University beginning on July
1, 2000 and ending on April 1, 2002. In July 1995, the Company advanced $50,000
of the $166,667. In December 1995, Mind Extension University advanced $50,000
of the $166,667. In February 1996, the Company and Mind Extension University
each funded ICC with an additional $75,000 on the same terms and conditions as
described above. At August 15, 1996, a total of $250,000 was outstanding under
these loans.

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SALES COMMISSIONS

Jones International Networks, Ltd. ("JIN"), a subsidiary of Jones
International, earns a three percent commission on the sale of airtime for
informational programming to third parties. Mind Extension University and Jones
Computer Network paid commissions to JIN of approximately $50,000 and $118,000,
respectively, in 1995.

AFFILIATE FEES

The Company sells its programming to certain cable television systems owned
and managed by Jones Intercable. In 1993, 1994 and 1995, these systems paid
total subscriber license fees to Mind Extension University of approximately
$417,000, $640,000, $861,000, respectively. In 1994 and 1995, these systems
paid total subscriber license fees to Jones Computer Network of approximately
$237,000 and $1.1 million, respectively.

TRANSPONDER AGREEMENTS

Jones Satellite Holdings, Inc. ("Satellite Holdings"), a wholly-owned
subsidiary of Mind Extension University, leases a non-preemptible transponder on
a domestic communication satellite from a third party. The lease terminates in
2004. In January 1995, Satellite Holdings entered into a license agreement with
Jones Galactic Radio, Inc. ("JGR"), an affiliate of the Company, to sublease the
sub-carrier space on the transponder to JGR for approximately $58,000 per month.
Satellite Holdings has the right to terminate the license agreement at any time
upon 30 days written notice to JGR. Satellite Holdings received approximately
$696,000 in lease payments from JGR in 1995.

In fiscal 1994, Jones Computer Network entered into a license agreement
with Jones Space Segment, Inc. ("Space Segment"), a subsidiary of Jones
International, to sublease a non-preemptible transponder on a domestic
communications satellite that is currently leased by Space Segment from a third
party. Under the terms of the agreement, Space Segment has the right to
terminate the license at any time upon 30 days written notice to Jones Computer
Network. Such monthly lease payments may be adjusted periodically through the
December 2004 agreement expiration date based on the number of customers using
the transponder. Jones Computer Network made lease payments to Space Segment of
approximately $267,000, and $1.2 million in 1994 and 1995, respectively.

UPLINKING AND OTHER SERVICES

Jones Earth Segment, Inc. ("Earth Segment"), a subsidiary of Jones
International, provides playback, editing, duplicating and uplinking services to
the Company. The Company paid Earth Segment approximately $1.0 million, $1.7
million and $1.9 million for these services in 1993, 1994 and 1995,
respectively.

PROGRAMMING

Jones Digital Century, Inc. ("JDC"), a subsidiary of Jones Interactive,
Inc., provides program production services to the Company. The Company paid
approximately $1.1 million to JDC for programming in 1995.

The Mind Extension Institute, Inc. ("MEI"), a subsidiary of the Company,
provides cable-related instructional videos and other training materials to
MSOs, including Jones Intercable and its

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affiliates. In 1993, 1994 and 1995, MEI charged Jones Intercable and its
affiliates approximately $13,000, $252,000 and $39,000, respectively, for these
materials.

COMPUTER SERVICES

Jones Interactive, Inc. ("JII"), a wholly-owned subsidiary of Jones
International, provides computer hardware and software services and
miscellaneous related support services to the Company. The Company paid JII
approximately $236,000, $449,000 and $895,000 for these services in 1993, 1994
and 1995, respectively.

OFFICE LEASE

The Company subleases office space in Englewood, Colorado from affiliates
of Jones International. This sublease, as amended, has a 15-year term,
expiring July 2000, with three five-year renewal options. The Company paid rent
and associated expenses of approximately $211,000, $196,000 and $373,000 to
these affiliates in 1993, 1994 and 1995, respectively.

ADMINISTRATIVE SERVICES

The Company also reimburses Jones International and Jones Intercable for
certain administrative services provided by these companies, such as legal,
accounting, purchasing and human resources services. Jones International and
Jones Intercable charge the Company for these services based upon an allocation
of its personnel expenses associated with providing these services. These
allocated expenses totaled approximately $70,000, $359,000 and $60,000 in 1993,
1994 and 1995, respectively.

In most of the foregoing transactions no third party bids or appraisals
were obtained. In addition, certain of these transactions are by their nature
unique to the companies involved. Accordingly, no assurance can be given that
these transactions were generally as favorable to the Company as could have been
obtained from unaffiliated third parties. All of the transactions described
above, other than the advances from Jones Intercable and from Jones
International and the investment by BCI, are expected to continue during the
current fiscal year and additional agreements and transactions with affiliated
parties may be arranged in the future.

In addition, Messrs. Jones and Griffin and Msses. Steele and Garcia,
officers and/or directors of the Company, are also officers or directors of
these affiliated entities and, from time to time, the Company may enter into
transactions with these entities. Consequently, such officers and directors may
have conflicts of interest with respect to matters potentially or actually
involving or affecting the Company and such affiliates. In addition, such
directors and/or officers may have such conflicts of interest with respect to
corporate opportunities suitable for both the Company and such affiliates.
Neither the Company nor its Board of Directors has established any corporate
policy to resolve such potential conflicts of interest between the Company and
its affiliates.

However, under the Colorado Business Corporation Act, as amended (the
"Colorado Act"), no conflicting interests transaction shall be void or voidable
or give rise to an award of damages in a proceeding by a shareholder or by or in
the right of the corporation, solely because the conflicting interest
transaction involves a director of the corporation or an entity in which a
director of a corporation is a director or officer or has a financial interest
or solely because the director is present at or participates in the meeting of
the corporation's Board of Directors or of a committee of the

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Board of Directors which authorizes, approves, or ratifies the conflicting
interest transaction or solely because the directors' vote is counted for such
purpose if the material facts as to the directors relationship or interest and
as to the conflicting interest transaction are disclosed or known to the Board
of Directors or the committee and said Board of Directors or committee
authorizes, approves, or ratifies in good faith the conflicting interest
transaction, the material facts as to the director's relationship or interest
and as to the conflicting interest transaction are disclosed or known to the
shareholder entitled to vote thereon and said shareholders specifically
authorize, approve, or ratify in good faith the conflicting interest
transaction, or the conflicting interest transaction is fair as to the
corporation. In addition, the Board of Directors or a committee thereof may not
authorize a loan to, or issue a guaranty on behalf of, a director of the Company
or an entity in which a director of the Company is a director or officer or has
a financial interest, until at least ten days after written notice of the
proposed authorization of the loan or guaranty has been given to the
shareholders who would be entitled to vote thereon if the issue of the loan or
guaranty were submitted to a vote of the shareholders.

Conflicts of interest also may arise in managing the operations of more
than one entity with respect to allocating time, personnel and other resources
between entities. To the extent deemed appropriate by the Company, such
conflicts would be resolved by employing additional personnel as necessary. The
Company and its officers and directors will devote only such time to the Company
as they deem necessary and will be involved on a continuing basis with
activities on behalf of affiliates of the Company. See "Risk Factors --
Conflicts of Interest."

-57-

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Class A Common Stock and Class B Common Stock as of
August 30, 1996 and as adjusted to reflect the sale of shares offered hereby, by
(i) each Selling Shareholder, (ii) each person known by the Company to be the
beneficial owner of more than 5% of the Class A Common Stock or Class B Common
Stock, (iii) certain of the Company's directors, (iv) each of the Named
Executive Officers, and (v) all directors and executive officers of the Company
as a group. Ms. Lawton and Messrs. Malone and Vanaselja, directors of the
Company, do not beneficially own any shares of Class A Common Stock and Class B
Common Stock and have therefore been omitted from the following table. Except as
otherwise indicated, each person named in the table has informed the Company
that such person has sole voting and investment power with respect to all shares
beneficially owned by it, subject to community property laws where applicable.

Class A Common Stock Class B Common Stock
------------------------------------------------------- --------------------
Owned Before and
Owned Before Offering Owned After Offering After Offering Percent of
--------------------- -------------------- -------------------- Vote of All Classes
Number Shares Sold Number Number of Common Stock
Beneficial Owner of Shares Percent In Offering of Shares Percent of Shares Percent After Offering
- ---------------- --------- ------- ----------- --------- ------- --------- ------- --------------

Glenn R. Jones
/(1)(2)/ 3,005,325 81.4% 944,735 2,060,590 21.7% 2,089,620 100.0% 75.5%

Jones International,
Ltd./(2)(3)/ 2,759,655 74.7 833,665 1,925,990 20.3 1,843,950 88.2 67.0%

Jones Intercable,
Inc./(2)/ 915,705 24.8 -- 915,705 9.6 -- -- 3.0%

Bell Canada International
BVI III Limited/(4)/ 686,850 18.6 155,265 531,585 5.6 -- -- 1.8%

Wallace W. Griffin -- -- -- -- -- -- -- --

Scott A. Wheeler -- -- -- -- -- -- -- --

Paul R. Amos -- -- -- -- -- -- -- --

All executive officers 3,005,325 81.4% 944,735 2,060,590 21.7% 2,089,620 100.0% 75.5%
and directors as a group
(12 person(s))(3)

______________________

(1) Glenn R. Jones is the Chairman of the Board of Directors and Chief
Executive Officer of Jones International and owns all of the outstanding
shares of Jones International and is therefore deemed to be the beneficial
owner of all shares of the Company owned by Jones International. Mr. Jones
is also the Chairman of the Board of Directors and Chief Executive Officer
of Jones Intercable and beneficially owns shares of the common stock of
Jones Intercable entitling him to cast 41% of the votes to be cast on all
matters put to a vote of Jones Intercable's shareholders voting as a single
class. He therefore may be deemed to be the beneficial owner of all shares
of the Company held by Jones Intercable. Share amounts shown do not include
shares beneficially owned by BCI, of which Mr. Jones is a director. Mr.
Jones disclaims beneficial ownership of such shares.

(2) Glenn R. Jones', Jones International's and Jones Intercable's address is
9697 East Mineral Avenue, Englewood, Colorado 80112.

(3) Jones International beneficially owns shares of common stock of Jones
Intercable entitling it to cast 35% of the votes to be cast on all matters
put to a vote of Jones Intercable's shareholders voting as a single class.
Jones International may be deemed to be the beneficial owner of all of the
shares of the Company held by Jones Intercable.

-58-

(4) Bell Canada International BVI III Limited ("Limited") is a wholly-owned
subsidiary of BCI. As a result, BCI may be deemed to beneficially own all
686,850 shares of Class A Common Stock owned by Limited. Mr. Vanaselja, a
director of the Company and an executive officer of BCI, disclaims
beneficial ownership of such shares. BCI's address is 1000 rue de La
Gauchetiere Ouest, Bureau 1100, Montreal, Quebec, Canada H3B 4Y8.

(5) Consists solely of shares beneficially owned by Glenn R. Jones.

-59-

DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital stock consists of 100,000,000 shares of
Class A Common Stock, $.01 par value per share, of which 3,692,175 shares were
outstanding on June 30, 1996, and 2,089,620 shares of Class B Common Stock, $.01
par value per share, of which 2,089,620 shares were outstanding on such date.

COMMON STOCK

Under the Colorado Business Corporation Act, as amended (the "Colorado
Act"), the holders of the Class A Common Stock and Class B Common Stock are
entitled to vote as separate classes with respect to certain amendments to the
Company's articles of incorporation, certain mergers or share exchanges, a sale
or other disposition of all or substantially all of the Company's assets not in
the ordinary course of business, and the dissolution of the Company. On all
matters requiring a class vote under the Colorado Act, passage will require the
affirmative vote of the holders of two-thirds of the shares of each class,
voting separately, and of the total shares entitled to vote thereon.

Holders of Class A Common Stock and Class B Common Stock are entitled to
share ratably in all dividends (whether paid in cash, property or shares of the
Company), if declared by the Company's Board of Directors out of any funds
legally available therefor and in assets available for distribution upon any
liquidation of the Company, subject to the prior rights of creditors. The
Company does not currently anticipate paying any dividends. See "Dividend
Policy."

The outstanding shares of Common Stock are not subject to redemption or to
any liability for further calls or assessments, and the holders of such shares
do not have preemptive or other rights to subscribe for additional shares of the
Company or any rights to convert such shares into any other securities of the
Company.

CLASS A COMMON STOCK

Each share of Class A Common Stock casts one-tenth of a vote on all matters
put to a vote of the shareholders. On all matters except for the election of
directors or as otherwise required by law, the holders of Class A Common Stock
and Class B Common Stock vote together as a single class. As long as the Class
A Common Stock constitutes more than 10% of the issued and outstanding shares of
Common Stock, the holders of Class A Common Stock, voting as a separate class,
are entitled to elect that number of directors that constitute 25% percent of
the total membership of the Board of Directors (if such number of directors is
not a whole number, the holders of the Class A Common Stock are entitled to
elect the nearest higher whole number of directors that constitute at least 25%
of the Board of Directors). Holders of the Class A Common Stock are not
entitled to cumulate their votes in the election of directors. Directors
elected by the Class A Common Stock may be removed from office, with or without
cause, only by the holders of the Class A Common Stock. Any vacancies on the
Board of Directors may be filled by the remaining directors, regardless of which
class of Common Stock elected the director whose directorship has been vacated.

Upon the completion of this Offering, the outstanding shares of Class A
Common Stock will constitute approximately 82% of the total outstanding shares
of capital stock of the Company and will be entitled to cast approximately 31%
of the votes to be cast in matters to be acted upon by shareholders of the
Company not requiring a class vote.

-60-

CLASS B COMMON STOCK

Each share of Class B Common Stock casts one vote on all matters put to a
vote of the shareholders. On all matters except for the election of directors
or as otherwise required by law, the holders of Class A Common Stock and Class B
Common Stock vote together as a single class. In the election of directors, the
holders of Class B Common Stock, voting as a separate class, are entitled to
elect all of the directors not specially entitled to be elected by the holders
of the Class A Common Stock. Holders of the Class B Common Stock are not
entitled to cumulate their votes in the election of directors. Directors
elected by the Class B Common Stock may be removed from office, with or without
cause, only by the holders of the Class B Common Stock. Any vacancies on the
Board of Directors may be filled by the remaining directors, regardless of which
class of Common Stock elected the director whose directorship has been vacated.

Upon the completion of this Offering, the outstanding shares of Class B
Common Stock will constitute approximately 18% of the total outstanding shares
of capital stock of the Company and will be entitled to cast approximately 69%
of the votes to be cast in matters to be acted upon by shareholders of the
Company not requiring a class vote.

CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION

In accordance with the Colorado Act, the Company's articles of
incorporation eliminate in certain circumstances the liability of directors of
the Company for monetary damages for breach of their fiduciary duty as
directors. This provision does not eliminate the liability of a director (i)
for a breach of the director's duty of loyalty to the Company or its
shareholders, (ii) for acts or omissions by the director not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for a
willful or negligent declaration of an unlawful distribution or (iv) for
transactions from which the director derived an improper personal benefit.

The Company's articles of incorporation also provide that the Company shall
indemnify any person and his or her estate and personal representatives against
all liability and expense incurred by reason of the person being or having been
a director or officer of the Company or, while serving as a director or officer
of the Company, is or was serving at the request of the Company or any of its
subsidiaries as a director, an officer, an agent, an associate, an employee, a
fiduciary, a manager, a member, a partner, a promoter, or a trustee of, or to
hold any similar position with, another domestic or foreign corporation or other
individual or entity or of an employee benefit plan, to the full extent
permitted under the Colorado Act. The Colorado Act requires a corporation to
indemnify its officers and directors against reasonable expenses incurred in any
proceeding to which the officer or director is a party and was wholly
successful, on the merits or otherwise, in defense of the proceeding. In
addition to this mandatory indemnification, the Colorado Act provides that a
corporation may indemnify its officers and directors against liability and
reasonable expenses if the officer or director acted in good faith and in a
manner reasonably relieved to be in the best interests of the corporation in the
case of conduct in an official capacity, in a manner he or she reasonably
believed was at least not opposed to the corporation's best interests in all
other cases, or in a manner he or she had no reasonable cause to believe was
unlawful in the case of criminal proceedings. In actions by or in the name of
the corporation, the Colorado Act provides the same standard but limits
indemnification to reasonable expenses incurred by the director and prohibits
any indemnification if the director was adjudged liable to the corporation. The
Colorado Act also prohibits indemnification of a director in connection with
actions charging improper personal benefit to the director if the director is
adjudged liable on that basis.

-61-

Certain provisions of the Company's articles of incorporation and bylaws
may have the effect of preventing, discouraging or delaying any change in the
control of the Company and may maintain the incumbency of the Board of Directors
and management. Under the Company's articles of incorporation, a majority of
the directors then in office, though less than a quorum, or the sole remaining
director, will be empowered to fill any vacancy on the Board of Directors. A
two-thirds vote of the Common Stock, will be required to alter, amend or repeal
the foregoing provisions. This provision for filling vacancies on the Board of
Directors may discourage a third party from attempting to gain control of the
Company and may maintain the incumbency of the Board of Directors. The Company
is not aware of any plans by a third party to seek control of the Company. See
"Risk Factors" Voting Rights; Control by Principal Shareholders; Anti-Takeover
Effects."

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Class A Common Stock will be
American Securities Transfer & Trust, Incorporated, Denver, Colorado.

-62-

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have outstanding
9,492,175 shares (10,527,175 shares if the Underwriters' over-allotment option
is exercised in full) of Class A Common Stock. Of these shares, all 6,900,000
shares (7,935,000 shares if the Underwriters' over-allotment option is exercised
in full) sold by the Company and the Selling Shareholders in this Offering will
be freely transferable by persons other than "affiliates" of the Company without
restriction under the Securities Act.

The remaining 2,592,175 shares of Class A Common Stock are held by
affiliates of the Company and are "restricted securities" within the meaning of
Rule 144 under the Securities Act and may not be sold in the absence of
registration under the Securities Act unless an exemption from registration is
available, including the exemption contained in Rule 144. The Company and its
shareholders, officers and directors have agreed not to publicly offer to sell,
sell, contract to sell or otherwise publicly dispose of such shares for at least
180 days after the date of this Prospectus without the prior written consent of
Montgomery Securities. The Company understands that Montgomery Securities may,
in its discretion, waive these agreements at any time. Following the expiration
of such lock-up agreements, 2,592,175 shares will become available for resale in
the public market, all of which are subject to the volume limitations, holding
period and other restrictions of Rule 144.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned his or her shares of
Class A Common Stock for at least two years, including an "affiliate" of the
Company (as that term is defined under the Securities Act), is entitled to sell,
within any three-month period, a number of shares that does not exceed the
greater of (i) 1% of the then outstanding shares of Class A Common Stock of the
Company or (ii) the average weekly trading volume of the then outstanding shares
of Class A Common Stock during the four calendar weeks preceding each such sale.
A person (or persons whose shares are aggregated) who is not deemed an
"affiliate" of the Company and who has beneficially owned shares for at least
three years is entitled to sell such shares under Rule 144 without regard to the
volume limitations described above. Affiliates, including members of the
Company's Board of Directors and executive officers, continue to be subject to
such limitations.

In connection with BCI's acquisition of a then 15% equity interest in the
Company in December 1994, BCI entered into a Shareholders Agreement, dated as of
December 20, 1994, with Glenn R. Jones, Jones International and the Company (the
"Shareholders Agreement") that, among other things, grants to BCI and certain of
its affiliates (the "BCI Holders") certain registration rights with respect to
the Company's capital stock. On August 7, 1996, Mr. Jones and Jones
International (collectively, the "Jones Holders") and the Company entered into a
Registration Rights Agreement on substantially the same terms and conditions as
the registration rights granted to the BCI Holders under the Shareholders
Agreement. Pursuant to such registration rights, each of the BCI Holders and
the Jones Holders have the right to demand, up to three times, that the Company
file a registration statement with the Commission to register the sale of their
shares of the Company's capital stock and to piggy-back, an unlimited number of
times, on certain other registration statements filed by the Company. The Jones
Holders and the BCI Holders may demand that the Company register shares of its
capital stock owned by them no more than once every nine months. The Jones
Holders' and BCI Holders' registration rights terminate five years after the
effective date of the registration statement for this Offering. The Jones
Holders and the BCI Holders have exercised their piggyback registration rights
in connection with this Offering.

-63-

As compensation for services rendered in connection with this Offering, the
Company has agreed to grant a warrant to M. Kane & Company, Inc. ("MKC") to
purchase 28,750 shares (33,063 shares if the Underwriters' over-allotment option
is exercised in full) of the Class A Common Stock at an exercise price equal to
$18.00 (assuming an initial offering price of $15.00 per share). In connection
with the warrant, MKC also received certain registration rights that provide,
among other things, that MKC will have one demand registration right and an
unlimited number of piggy-back registration rights during the five-year period
after the closing of this Offering. MKC has agreed not to publicly offer to
sell, sell, contract to sell or otherwise publicly dispose of the shares of
Class A Common Stock underlying the warrant for at least 180 days after the date
of this Prospectus. See "Underwriting."

Additionally, as of August 30, 1996, 1,100,000 shares of Class A Common
Stock were reserved for issuance under the Company's Stock Option Plan. As of
that date, the Company had not granted any options to purchase shares of its
Class A Common Stock under the Stock Option Plan. The Company anticipates
granting stock options to certain of its officers and employees prior to the
completion of this Offering.

Prior to this Offering, there has been no market for the Class A Common
Stock of the Company, and the amount, timing and nature of any future sale of
Class A Common Stock will depend upon market conditions, the personal
circumstances of the sellers and other factors. No predictions can be made as
to the effect, if any, that public sales of shares or the availability of shares
for sale will have on the market price prevailing from time to time.
Nevertheless, sales of substantial amounts of the Class A Common Stock in the
public market, pursuant to Rule 144 or otherwise, or the perception that such
sales could occur, could have an adverse impact on the market price of the Class
A Common Stock.

-64-

UNDERWRITING

The underwriters named below (the "Underwriters"), represented by
Montgomery Securities, Piper Jaffray Inc. and MKC (the "Representatives"), have
severally agreed, subject to the terms and conditions set forth in the
Underwriting Agreement, to purchase from the Company and the Selling
Shareholders the number of shares of Class A Common Stock indicated below
opposite their respective names at the initial public offering price less the
underwriting discount set forth on the cover page of this Prospectus. The
Underwriting Agreement provides that the obligations of the Underwriters are
subject to certain conditions precedent and that the Underwriters are committed
to purchase all of such shares if they purchase any.

Underwriters Number of Shares
------------ ----------------

Montgomery Securities.....................
Piper Jaffray Inc.........................
M. Kane & Company, Inc.................... ---------

Total............................... 6,900,000
=========

The Representatives have advised the Company and the Selling Shareholders
that the Underwriters initially propose to offer Class A Common Stock to the
public on the terms set forth on the cover page of this Prospectus. The
Underwriters may allow to selected dealers a concession of not more than $
per share; and the Underwriters may allow, and such dealers may reallow, a
concession of not more than $ per share to certain other dealers. After
the initial public offering, the offering price and other selling terms may be
changed by the Representatives. The Class A Common Stock is offered subject to
receipt and acceptance by the Underwriters, and to certain other conditions,
including the right to reject orders in whole or in part. Montgomery Securities
and Piper Jaffray Inc. have advised the Company that they intend to make a
market in the Class A Common Stock after the consummation of this Offering.

The Company and the Selling Shareholders have granted an option to the
Underwriters, exercisable during the 30-day period after the date of this
Prospectus, to purchase up to a maximum of 870,000 and 165,000 additional shares
of Class A Common Stock, respectively, to cover over-allotments, if any, at the
same price per share as the initial 6,900,000 shares to be purchased by the
Underwriters. To the extent that the Underwriters exercise this option, each of
the Underwriters will be committed, subject to certain conditions, to purchase
such additional shares in approximately the same proportion as set forth in the
above table. The Underwriters may purchase such shares only to cover over-
allotments made in connection with this Offering.

Each director and executive officer of the Company, the Selling
Shareholders and certain other holders of Class A Common Stock have agreed,
subject to certain limited exceptions, not to publicly sell or offer to sell or
otherwise publicly dispose of any shares of Class A Common Stock currently held
by them, any right to acquire any shares of Class A Common Stock or any
securities exercisable for or convertible into any shares of Class A Common
Stock for a period of 180 days after the date of this Prospectus without the
prior written consent of Montgomery Securities. Montgomery Securities may, in
its sole discretion and at any time without notice, release all or any portion
of the securities subject to these lock-up agreements.

-65-

The Underwriting Agreement provides that the Company and the Selling
Shareholders will severally indemnify the Underwriters and their controlling
persons against certain liabilities, including civil liabilities under the
Securities Act, or will contribute to payments the Underwriters may be required
to make in respect thereof.

The Representatives have advised the Company that the Underwriters do not
intend to confirm sales to any accounts over which they exercise discretionary
authority in excess of 5% of the number of shares of Class A Common Stock
offered hereby.

On May 29, 1996, the Company and MKC entered into an agreement pursuant to
which MKC agreed to provide financial advice and assistance, including
valuation-related analyses of the Company, to the Company about strategic
financial alternatives and to assist the Company in structuring and conducting
this Offering. In consideration for such services, MKC is entitled to advisory
fees equal to 1.875% of the gross proceeds of this Offering, which fees are
estimated to be $2 million, as well as a warrant (the "MKC Warrant") to purchase
shares of Class A Common Stock (described below). In addition, the Company is
required to reimburse MKC for its reasonable out-of-pocket fees and expenses.
This agreement will terminate on the closing date of this Offering.

Under the MKC Warrant, MKC will have the right to purchase shares of the
Class A Common Stock at a per share exercise price equal to 120% of the initial
offering price of the Class A Common Stock, in an aggregate amount equal to 0.5%
of the gross proceeds of this Offering. Assuming an offering price of $15 per
share, MKC will have the right to purchase 28,750 shares (33,063 shares if the
Underwriters' over-allotment option is exercised) of the Class A Common Stock at
an exercise price equal to $18.00 per share. The MKC Warrant is immediately
exercisable and expires five years from the closing of the Offering. In
connection with the MKC Warrant, MKC will also receive certain registration
rights. These registration rights provide that MKC will have the right, during
the five year period commencing on the date of the closing of the Offering, on
one occasion to require the Company to register the Class A Common Stock
underlying the MKC Warrant (the "Registrable Securities") by means of a
registration statement pursuant to the Securities Act, or post-effective
amendment thereto, as appropriate, so as to enable MKC to publicly offer the
Registrable Securities. Moreover, if during the five year period commencing the
date of the closing of the Offering the Company registers any of its Class A
Common Stock for sale pursuant to a post-effective amendment or new registration
statement (with the exception of Form S-8, Form S-4 or any other inappropriate
form), upon request by MKC, the Company shall be required to include the
Registrable Securities as part of the registration statement. MKC will have no
voting, dividend or other rights as stockholders of the Company unless and until
the exercise of the MKC Warrant. The number of shares of Class A Common Stock
deliverable upon any exercise of the MKC Warrant and the exercise price of the
MKC Warrant are protected by customary anti-dilution provisions. MKC has agreed
not to publicly offer to sell, sell, contract to sell or otherwise publicly
dispose of the shares of Class A Common Stock underlying the warrant for at
least 180 days after the date of this Prospectus.

Prior to this offering, there has been no public market for the Class A
Common Stock. Consequently, the initial public offering price will be
determined through negotiations among the Company, the Selling Shareholders and
the Representatives. Among the factors considered in such negotiations will be
the history of, and prospects for, the Company and the industry in which it
competes, an assessment of the Company's management, the Company's past and
present operations and financial performance, its past and present earnings and
the trend of such earnings, the prospects for future earnings of the Company,
the present state of the Company's development, the general

-66-

condition of the securities markets at the time of this Offering and the market
prices of publicly traded common stocks of comparable companies in recent
periods.

-67-

LEGAL MATTERS

The validity of the Common Stock being offered hereby will be passed upon
for the Company by Davis, Graham & Stubbs LLP, Denver, Colorado. Certain legal
matters will be passed upon for the Underwriters by Locke Purnell Rain Harrell
(A Professional Corporation), Dallas, Texas.

EXPERTS

The Financial Statements of the Company at December 31, 1995 and 1994, and
for each of the three years in the period ended December 31, 1995, appearing in
this Prospectus and the Registration Statement to the extent and for the periods
indicated in their report have been audited by Arthur Andersen LLP, independent
public accountants, as set forth in their report thereon appearing elsewhere
herein and in the Registration Statement, and is included herein in reliance
upon the authority of said firm as experts in accounting and auditing in giving
said report.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (including all amendments
thereto, the "Registration Statement") under the Securities Act with respect to
the Common Stock offered hereby. As permitted by the rules and regulations of
the Commission, this Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. Statements contained in this
Prospectus as to the contents of any agreement or other document referred to are
not necessarily complete. With respect to each such agreement or other document
filed as an exhibit to the Registration Statement, reference is made to the
exhibit for a more complete description of the matter involved, and each such
statement shall be deemed qualified in all respects by such reference.

The Registration Statement, including the exhibits and schedules thereto,
may be inspected at the public reference facilities maintained by the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the following regional offices of the Commission: Seven World Trade
Center, New York, New York 10048, and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such materials may be obtained from the
public reference section of the Commission at its Washington, D.C. address upon
payment of the prescribed fees. The Commission also maintains a World Wide Web
site that contains reports, proxy statements and information statements of
registrants (including the Company) that file electronically with the Commission
at http://www.sec.gov.

Upon completion of this Offering, the Company will be subject to the
informational reporting requirements of the Securities Exchange Act of 1934, as
amended, and, in accordance therewith, will file reports, proxy statements and
other information with the Commission.

-68-

INDEX TO FINANCIAL STATEMENTS

Page
----
Jones Education Networks, Inc. and Subsidiaries Consolidated Financial
- ----------------------------------------------------------------------
Statements
- ----------

Report of Independent Public Accountants......................................... F-2

Consolidated Balance Sheets as of December 31, 1994 and 1995 and June 30, 1996... F-3

Consolidated Statements of Operations for the Three Years Ended December 31,
1995, and the Six Month Periods Ended June 30, 1995 and 1996................... F-5

Consolidated Statements of Shareholders' Investment for the Three Years Ended
December 31, 1995, and the Six Month Period Ended June 30, 1996................ F-6

Consolidated Statements of Cash Flows for the Three Years Ended December 31,
1995, and the Six Month Periods Ended June 30, 1995 and 1996................... F-7

Notes to Consolidated Financial Statements....................................... F-8

F-1

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Jones Education Networks, Inc.:

We have audited the accompanying consolidated balance sheets of Jones
Education Networks, Inc. (a Colorado corporation) and subsidiaries
(collectively, "the Company") as of December 31, 1994 and 1995, and the related
consolidated statements of operations, shareholders' investment and cash flows
for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
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, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
December 31, 1994 and 1995, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1995 in conformity
with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Denver, Colorado
August 21, 1996

F-2

JONES EDUCATION NETWORKS, INC. AND SUBSIDIARIES
-----------------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------

ASSETS
------

DECEMBER 31, DECEMBER 31, JUNE 30,
1994 1995 1996
------------- ------------- -------------
(unaudited)

CURRENT ASSETS:

Cash and cash equivalents $ 8,258,040 $ 6,362,420 $ 4,197,154
Short term investments 10,000,000 - 1,032,188
Accounts receivable, net of allowance
for doubtful accounts of $397,685,
$199,160, and $133,977, respectively 3,749,917 2,957,619 2,805,420
Inventory 442,676 585,985 646,822
Other current assets 617,516 298,954 52,526
---------- ---------- ----------
Total Current Assets 23,068,149 10,204,978 8,734,110
---------- ---------- ----------

PROPERTY AND EQUIPMENT:

Furniture, fixtures and equipment 1,368,812 1,821,453 1,922,664
Leasehold improvements 65,432 122,921 303,073
---------- ---------- ----------
1,434,244 1,944,374 2,225,737
Less - accumulated depreciation
and amortization (543,227) (751,840) (925,739)
---------- ---------- ----------
Net Property and Equipment 891,017 1,192,534 1,299,998
---------- ---------- ----------

INVESTMENT IN PRODUCTIONS (Note 2):

Investment in productions 1,004,763 1,254,635 1,305,575
Less - accumulated amortization (385,971) (757,434) (891,456)
---------- ---------- ----------
Net Investment in Productions 618,792 497,201 414,119
---------- ---------- ----------

OTHER ASSETS:

Notes receivable from affiliate (Note 6) - 100,000 250,000
Other 188,408 70,192 389,909
---------- ---------- ----------
Total Other Assets 188,408 170,192 639,909
---------- ---------- ----------

Total Assets $24,766,366 $12,064,905 $11,088,136
========== ========== ==========

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

F-3

JONES EDUCATION NETWORKS, INC. AND SUBSIDIARIES
-----------------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------

LIABILITIES AND SHAREHOLDERS' INVESTMENT
----------------------------------------

DECEMBER 31, DECEMBER 31, JUNE 30,
1994 1995 1996
------------- ------------- -------------
(unaudited)

CURRENT LIABILITIES:

Accounts payable and accrued liabilities $ 340,934 $ 1,461,774 $ 921,711
Accounts payable--Jones International,
Ltd. (Note 4) - - 896,081
Accrued tuition (Note 2) 410,152 383,179 586,585
Deferred revenue (Note 2) 1,153,230 457,551 259,320
Other - 114,227 132,322
------------ ------------ ------------
Total Current Liabilities 1,904,316 2,416,731 2,796,019
------------ ------------ ------------

ADVANCES FROM JONES
INTERNATIONAL, LTD. (Note 4) 6,680,032 6,768,894 1,400,000
------------ ------------ ------------

LONG-TERM DEBT AND
CAPITAL LEASES (Note 1) 20,012,621 - -
------------ ------------ ------------

MINORITY INTERESTS - - 742,494
------------ ------------ ------------

COMMITMENTS AND CONTINGENCIES (Note 8)

SHAREHOLDERS' INVESTMENT (Note 5):

Class A Common Stock; $.01 par value;
100,000,000 shares authorized; 2,632,260, 3,547,965
and 3,692,175 shares issued and outstanding,
respectively 26,323 35,480 36,922
Class B Common Stock; $.01 par value;
2,089,620 shares authorized; 1,945,410, 1,945,410
and 2,089,620 shares issued and outstanding,
respectively 19,454 19,454 20,896
Additional paid-in capital 26,928,480 46,919,323 40,679,532
Accumulated deficit (Note 2) (30,804,860) (44,094,977) (34,587,727)
------------ ------------ ------------
Total Shareholders' Investment (3,830,603) 2,879,280 6,149,623
------------ ------------ ------------

Total Liabilities and
Shareholders' Investment $ 24,766,366 $ 12,064,905 $ 11,088,136
============ ============ ============

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

F-4

JONES EDUCATION NETWORKS, INC. AND SUBSIDIARIES
-----------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------

For the Years Ended For the Six Months
December 31, Ended June 30,
---------------------------------------------------------- --------------------------
1993 1994 1995 1995 1996
---- ---- ---- ---- ----
(unaudited)

REVENUES:
Network revenue--
Advertising revenue $ 542,716 $ 3,423,587 $ 5,397,013 $ 2,336,019 $ 4,528,832
------------ ------------ ------------ ----------- -----------
Licensing revenue--
Non-affiliated entities 2,635,004 3,070,734 4,103,593 2,105,187 2,177,269
Affiliated entities 416,740 877,271 2,686,090 1,291,758 1,431,748
------------ ------------ ------------ ----------- -----------
Total licensing revenue 3,051,744 3,948,005 6,789,683 3,396,945 3,609,017
------------ ------------ ------------ ----------- -----------
Total network revenue 3,594,460 7,371,592 12,186,696 5,732,964 8,137,849
Education products and services revenue 2,478,879 2,601,785 3,724,757 1,984,576 2,390,113
------------ ------------ ------------ ----------- -----------
Total revenues 6,073,339 9,973,377 15,911,453 7,717,540 10,527,962
------------ ------------ ------------ ----------- -----------

OPERATING EXPENSES:
Network expense--
Non-affiliated entities 3,846,471 4,574,520 6,868,786 4,050,439 4,059,210
Affiliated entities 1,041,436 1,962,096 4,174,761 1,802,831 2,312,934
------------ ------------ ------------ ----------- -----------
Total network expense 4,887,907 6,536,616 11,043,547 5,853,270 6,372,144

Education products and services expense 1,860,216 2,299,461 5,231,220 3,113,670 2,572,116
Selling and marketing expense 4,379,072 5,321,710 5,617,969 3,171,333 1,555,658
General and administrative expense 4,930,943 5,972,707 6,251,717 3,264,019 2,197,547
------------ ------------ ------------ ----------- -----------
Total operating expenses 16,058,138 20,130,494 28,144,453 15,402,292 12,697,465
------------ ------------ ------------ ----------- -----------

OPERATING LOSS (9,984,799) (10,157,117) (12,233,000) (7,684,752) (2,169,503)
------------ ------------ ------------ ----------- -----------

OTHER INCOME (EXPENSE):
Interest income 26,852 130,486 869,512 607,341 195,001
Interest expense - affiliated entities (994,507) (2,634,670) (1,851,541) (1,379,816) (260,196)
Equity in loss of affiliated entity - - (72,845) - (48,075)
Other, net 891,956 (93,925) (2,243) (1,754) (4,390)
------------ ------------ ------------ ----------- -----------
Total other expense, net (75,699) (2,598,109) (1,057,117) (774,229) (117,660)
------------ ------------ ------------ ----------- -----------

Loss before income tax benefit and
minority interests (10,060,498) (12,755,226) (13,290,117) (8,458,981) (2,287,163)

Income tax benefit (Note 7) 407,868 1,801,448 - - -
------------ ------------ ------------ ----------- -----------

Minority interests in net loss
of consolidated subsidiaries - - - - 182,293
------------ ------------ ------------ ----------- -----------

NET LOSS $ (9,652,630) $(10,953,778) $(13,290,117) $(8,458,981) $(2,104,870)
============ ============ ============ =========== ===========

NET LOSS PER COMMON SHARE (Note 2) $(2.31) $(2.61) $(2.40) $(1.60) $(.36)
============ ============ ============ =========== ===========

WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING (Note 5) 4,179,240 4,197,704 5,527,433 5,273,070 5,781,795
============ ============ ============ =========== ===========

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

F-5

JONES EDUCATION NETWORKS, INC. AND SUBSIDIARIES
-----------------------------------------------
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
--------------------------------------------------

COMMON STOCK ADDITIONAL TOTAL
------------
CLASS A CLASS B PAID-IN ACCUMULATED SHAREHOLDERS'
------- -------
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT INVESTMENT
------ ------ ------ ------ ------------- -------------- -------------

BALANCE, January 1, 1993 1,945,410 $19,454 1,945,410 $19,454 $ 8,935,671 $(10,198,452) $ (1,223,873)
Net Loss - - - - - (9,652,630) (9,652,630)
--------- ------- --------- ------- ------------ ------------ ------------
BALANCE, December 31, 1993 1,945,410 19,454 1,945,410 19,454 8,935,671 (19,851,082) (10,876,503)
Issuance of Common Stock 686,850 6,869 - - 17,992,809 - 17,999,678
Net Loss - - - - - (10,953,778) (10,953,778)
--------- ------- --------- ------- ------------ ------------ ------------
BALANCE, December 31, 1994 2,632,260 26,323 1,945,410 19,454 26,928,480 (30,804,860) (3,830,603)
Issuance of Common Stock 915,705 9,157 - - 19,990,843 - 20,000,000
Net Loss - - - - - (13,290,117) (13,290,117)
--------- ------- --------- ------- ------------ ------------ ------------
BALANCE, December 31, 1995 3,547,965 35,480 1,945,410 19,454 46,919,323 (44,094,977) 2,879,280
Issuance of Common Stock 144,210 1,442 144,210 1,442 6,297,116 - 6,300,000
Minority Interest - - - - (12,536,907) 11,612,120 (924,787)
Net Loss - - - - - (2,104,870) (2,104,870)
--------- ------- --------- ------- ------------ ------------ ------------
BALANCE, June 30, 1996 (unaudited) 3,692,175 $36,922 2,089,620 $20,896 $ 40,679,532 $(34,587,727) $ 6,149,623
========= ======= ========= ======= ============ ============ ============

The accompanying notes to financial statements are
an integral part of this financial statement.

F-6

JONES EDUCATION NETWORKS, INC. AND SUBSIDIARIES
-----------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------

For the Years Ended For the Six Months
December 31, Ended June 30,
------------------------------------------- --------------------------
1993 1994 1995 1995 1996
---- ---- ---- ---- ----
(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(9,652,630) $(10,953,778) $(13,290,117) $(8,458,981) $(2,104,870)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 169,144 72,685 627,580 282,847 307,921
Equity in loss of subsidiary - - 72,845 - 48,075
Minority interest in net loss - - - - (182,293)
Net change in assets and liabilities:
Decrease (increase) in receivables,
inventory, prepaid assets and other
assets (640,038) (2,967,161) 1,085,767 2,710,861 18,073
Increase in accounts payable to Jones
International, Ltd. - - - - 896,081
Increase (decrease) in accounts payable,
accrued liabilities and accrued tuition 724,210 746,140 439,570 (388,244) (564,868)
----------- ------------ ------------ ----------- -----------
Net cash used in operating activities (9,399,314) (13,102,114) (11,064,355) (5,853,517) (1,581,881)
----------- ------------ ------------ ----------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (218,046) (374,083) (510,130) (100,353) (281,363)
Purchases of investments - (10,000,000) - - (1,032,188)
Proceeds from sale or maturity of investments - - 10,000,000 1,163,768 -
Investment in productions (214,700) (383,309) (297,376) (147,875) (50,940)
----------- ------------ ------------ ----------- -----------
Net cash provided by (used in) investing
activities (432,746) (10,757,392) 9,192,494 915,540 (1,364,491)
----------- ------------ ------------ ----------- -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in advances from
Jones International, Ltd. (1,678,620) 3,356,853 88,862 1,249,671 (5,368,894)
Proceeds from sale of common stock of
Jones Education Networks, Inc. - 17,999,678 - - 6,300,000
Proceeds from borrowings 9,201,000 10,799,000 - - -
Repayment of borrowings (58,025) (67,940) - - -
Increase in advances to International Community
College - - (100,000) - (150,000)
Repayment of capital leases - - (12,621) (12,621) -
----------- ------------ ------------ ----------- -----------
Net cash provided by (used in) financing
activities 7,464,355 32,087,591 (23,759) 1,237,050 781,106
----------- ------------ ------------ ----------- -----------

INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (2,367,705) 8,228,085 (1,895,620) (3,700,927) (2,165,266)
----------- ------------ ------------ ----------- -----------

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,397,660 29,955 8,258,040 8,258,040 6,362,420
----------- ------------ ------------ ----------- -----------

CASH AND CASH EQUIVALENTS, END OF PERIOD $ 29,955 $ 8,258,040 $ 6,362,420 $ 4,557,113 $ 4,197,154
========== =========== =========== ========== ==========

SUPPLEMENTAL CASH FLOW DISCLOSURES:
Issuance of common stock in repayment of
debt (Note 1) $ - $ - $ 20,000,000 $20,000,000 $ -
========== =========== =========== ========== ==========

Interest paid $ 994,507 $ 2,634,670 $ 1,851,541 $ 1,379,816 $ 260,196
========== =========== =========== ========== ==========

Allocated income tax benefits $ 407,868 $ 1,801,448 $ - $ - $ -
========== =========== =========== ========= ==========

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

F-7

JONES EDUCATION NETWORKS, INC.
------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------

FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
----------------------------------------------------

AND FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1996 (unaudited)
---------------------------------------------------------------

(1) ORGANIZATION AND BUSINESS
-------------------------

Jones Education Networks, Inc. (the "Company"), was incorporated on June
18, 1990. The Company develops, acquires, markets and distributes
knowledge-based television programs, distance education credit courses
and other educational products and services that target the adult learning
market. Through its television networks, ME/U Knowledge TV ("ME/U") and
Jones Computer Network ("JCN"), the Company distributes knowledge-enhancing
programs via multiple distribution channels. ME/U is a 66-percent-owned
subsidiary of the Company and JCN is an 81-percent-owned subsidiary of the
Company. To date, the Company has invested heavily in building its cable
distribution base and in developing its programming networks. Also, the
Company has expanded into the international marketplace, through
distribution of educational programming in the Asian and Latin American
markets. To date, these international operations have not had a significant
impact on the Company's results of operations.

The funding of the Company's development has come primarily from equity
funding and advances from its primary shareholders. The Company was formed
by Jones International, Ltd. ("International"), a holding company with
ownership interests in several companies involved in various aspects of the
telecommunications industry, and Glenn R. Jones. International is wholly
owned by Glenn R. Jones, Chairman and Chief Executive Officer of
International. International also owns a controlling interest in Jones
Intercable, Inc. ("Intercable"), a company which owns, operates and manages
cable television systems serving approximately 1.4 million subscribers in
the United States. In 1993, 1994 and 1995, Intercable advanced a total of
$20 million to ME/U. In June 1995, Intercable converted these advances to
ME/U into shares of Class A Common Stock of the Company for a then 17%
equity interest in the Company. In December 1994, Bell Canada International
Inc. ("BCI") purchased a then 15% equity position in the Company for $18
million (See Note 3 for additional information regarding BCI's investment).
Further, in March 1996, the Company sold 144,210 shares of both its Class A
and Class B Common Stock to International for $6.3 million, resulting in
the following ownership of the Company as of June 30, 1996 (excluding the
pro forma effect of the proposed offering described below):

Glenn R. Jones 8%
International 64%
Intercable 16%
BCI 12%
-----
100%
=====

Expansion of the Company's business through the development, production,
acquisition, marketing and distribution of its programming, as well as
through increasing brand recognition of the Company's networks, will
require significant expenditures. If the Company is unable to obtain
additional financing on acceptable terms in the future, its operations and
financial condition could be adversely affected. Although most of the
Company's historical capital needs have been met by advances from and
investments made by current shareholders, such entities are under no
obligation to provide future advances to the Company.

The Company is planning to register and sell additional shares of its Class
A Common Stock to the public. The Company believes its growing revenue
streams and available cash balances will allow it to meet its obligations
through December 31, 1996.

F-8

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------

Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of all majority-
owned or controlled subsidiaries. Investments in entities which are not
controlled by the Company are accounted for under the equity method. All
significant intercompany balances and transactions have been eliminated in
consolidation.

Minority Interest
-----------------
The minority interest in the net losses of the Company's consolidated
subsidiaries in excess of the minority interest in the shareholders'
investment of those subsidiaries are charged to the Company. These excess
losses are recovered against any future earnings or equity contributions by
existing or new shareholders. Accordingly, the Company recorded losses of
approximately $4,700,000, $4,400,000, and $4,600,000 in excess of the
Company's ownership interest in its consolidated subsidiaries, excluding
recovery of any excess losses, during the years ended December 31, 1993,
1994 and 1995, respectively, and losses of approximately $2,800,000 and
$900,000 during the six months ended June 30, 1995 and 1996, respectively.

In March 1996, the Company exchanged $26 million of advances made to ME/U
for additional ME/U stock issued. The resulting net change from this equity
contribution in the Company's proportionate share of ME/U's equity,
including recovery of previously recognized excess losses, has been
reflected in the accompanying statement of shareholders' investment in the
amount of approximately $925,000. As of December 31, 1994 and 1995, and
June 30, 1996, the Company had accumulated losses in excess of the
Company's ownership interest in its consolidated subsidiaries totaling
approximately $9,400,000, $14,000,000 and $3,000,000, respectively.

Cash and Cash Equivalents
-------------------------
The Company considers all highly-liquid investments with a maturity when
purchased of three months or less to be cash equivalents.

Short-term investments
----------------------
Short-term investments mature within one year and are comprised of
investments in debt securities. Due to the short-term nature of these
securities, the estimated fair market value approximates cost. Therefore,
no unrealized holding gains or losses are reflected in the accompanying
financial statements.

Inventories
-----------
Inventories consist of course and training materials and are valued on a
first-in, first-out basis at the lower of cost or market value.

Investment in Productions
-------------------------
As of December 31, 1994 and 1995, and June 30, 1996, the Company had a
gross investment of $1,004,763, $1,254,635 and $1,305,575, respectively, in
the production of telecourses and cable-related instructional videos. The
investment includes costs incurred in connection with the acquisition of
programming for, and original productions of, credit and non-credit
telecourses and instructional videos. These production costs are amortized
based upon the estimated life of each telecourse, which is typically two
years. The Company also evaluates production costs periodically and charges
them to expense when the telecourses are no longer distributed.

Property and Equipment
----------------------
Property and equipment is depreciated using the straight-line method over
the estimated useful lives of five years. Leasehold improvements are
depreciated over the lesser of five years or the term of the lease.

Income Taxes
------------
The Company accounts for deferred tax liabilities or assets based on the
temporary differences between the financial reporting and tax bases of
assets and liabilities as measured by the enacted tax rates which are
expected to be in effect when these differences reverse. Deferred tax
assets are reduced, if deemed necessary, by a valuation allowance for the
amount of any tax benefits which, more likely than not based upon current
circumstances, are not expected to be realized.

The Company's ownership of ME/U is below the 80 percent ownership
requirement for inclusion in the Company's consolidated income tax return
and, therefore, ME/U files separate federal and state income tax returns.
As a result, ME/U's tax net operating loss carryforwards are not available
to the Company.

Revenue Recognition
-------------------
The Company generates revenue primarily through advertisements, cable
operator and syndication licensing fees and education products and
services. The Company generates advertising revenue by selling airtime to
advertising agencies and other organizations who advertise their products
or services on the networks. The Company

F-9

recognizes revenue upon airing of the advertisements. Any amount paid by a
customer for an advertisement that has not aired during the period is
recorded as deferred revenue until such time as the advertisement is aired.

The Company delivers its programming to affiliated and unaffiliated cable
television systems for distribution to their viewers. Cable operator
licensing fees are earned based on contractual agreements covering
subscriber carriage. Cable operator licensing fees are usually paid within
90 days.

The Company, through its subsidiary ME/U, offers a number of degree
programs and other for-credit courses from a number of accredited colleges
and universities. The Company negotiates agreements with these universities
for the sharing of gross tuition fees and other student services. All
student registration, tuition payment collection and related support
functions are coordinated by the Company. The Company accrues the
universities' share of gross tuition fees when students are registered.
Tuition fees are generally payable to these universities at the end of the
course term. Tuition fee income is recognized by the Company over the
related instruction period, which is generally 3 months.

The Company also sells course support materials to students and video
learning tools to consumers. Revenue is recognized from the sale of these
and other student-related merchandise when the goods are shipped.

Net Loss per Share
------------------
Net loss per share of Class A and Class B Common Stock is based on the
weighted average number of shares outstanding during the respective
periods. In accordance with generally accepted accounting principles, all
shares issued within one year of the Company's proposed public equity
offering have also been reflected as outstanding for all periods presented.

Unaudited June 30 Results
-------------------------
The accompanying June 30, 1996 and 1995 unaudited financial information
reflects all necessary adjustments which are, in the opinion of management,
necessary for a fair statement of the results for the interim periods
presented. All such adjustments were of a normal recurring nature.

Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.

New Accounting Pronouncements
-----------------------------
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-lived
Assets and for Long-lived Assets to be Disposed Of" (SFAS 121), which
establishes accounting standards for the impairment of long-lived assets,
certain identifiable intangibles and goodwill. The Company adopted SFAS 121
effective January 1, 1996. Implementation of SFAS 121 had no material
effect on the Company's financial position or results of operations.

The Company adopted Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" (SFAS 123) effective January 1,
1996. SFAS 123 recommends a fair value based method of accounting for
employee stock compensation, including stock options. However, companies
may choose to account for stock compensation using the intrinsic value
based method as prescribed by Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" and provide pro forma
disclosures of net income and earnings per share as if the fair value based
method had been applied. The Company elected to account for stock
compensation using the intrinsic value based method, and thus SFAS 123 will
not have any impact on reported operating results.

(3) INVESTMENT IN THE COMPANY BY BCI
--------------------------------

On December 20,1994, BCI invested $18,000,000 in the Company through the
acquisition of 686,850 shares of the Company's Class A Common Stock, which
represented a then 15% equity interest in the Company. Due to issuances of
additional shares of the Company's Class A Common Stock since that date,
BCI's equity interest in the Company as of June 30, 1996 had been reduced
to approximately 12%.

Pursuant to the terms of a Shareholders Agreement dated as of December 20,
1994 among the Company, Glenn R. Jones, International and BCI (the
"Shareholders Agreement"), BCI was granted certain rights including, among
others, the right to

F-10

designate one member of the Board of Directors of the Company, the same
"shareholder rights" granted to any new unaffiliated shareholder that
purchases 15% or less of the Company's equity, and both demand and piggy-
back registration rights. The Shareholders Agreement also provides BCI with
certain preemptive rights with respect to future issuances of stock by the
Company and tag-along rights if International and Mr. Jones propose to sell
the controlling interest in the Company. BCI's preemptive rights and tag-
along rights will terminate at the time of the Company's initial public
offering. In addition, the Shareholders Agreement granted International
certain rights, including the right of first refusal should BCI desire to
sell any of its shares in the Company. International's right of first
refusal will terminate at the time of the Company's initial public
offering. All of the foregoing provisions of the Shareholders Agreement,
except for BCI's demand and piggy-back registration rights, automatically
will terminate at such time as BCI's equity ownership in the Company drops
below 10%.

(4) TRANSACTIONS WITH AFFILIATED ENTITIES
-------------------------------------

International owns a controlling interest in a number of subsidiaries,
including Intercable. As of June 30, 1996, Intercable owns 16 percent of
the Company and 26 percent of ME/U. Certain members of management of the
Company are also officers or directors of other affiliated entities and,
from time to time, the Company may have transactions with these entities.
Certain expenses are paid by affiliated entities on behalf of the Company
and are allocated at cost based on specific identification or other methods
which management believes are reasonable. Principal recurring transactions
are described in the following discussion:

Network Revenue
---------------
Jones International Networks, Inc. ("JIN"), a subsidiary of International,
earns a commission equal to 3 percent on the sale of airtime for
informational programming to third parties. Prior to July 1, 1995, the
Company did not have any commissions payable to JIN from this service. For
the year ended December 31, 1995 and the six month period ended June 30,
1996, JIN charged ME/U and JCN commissions totaling $49,917, and $118,220,
respectively.

The Company delivers its television programming to cable television
systems, including cable television systems owned and managed by
Intercable. Total cable operator license fees paid by Intercable to ME/U
were $416,740, $639,892, $861,488, $411,838 and $440,643, for the years
ended December 31, 1993, 1994 and 1995, and the six months ended June 30,
1995 and 1996, respectively. Total cable operator fees paid by Intercable
to JCN were $-0-, $237,379, $1,128,302, $531,770 and $642,955 for the years
ended December 31, 1993, 1994 and 1995, and the six months ended June 30,
1995 and 1996, respectively.

Jones Satellite Holdings ("Satellite Holdings"), a wholly-owned subsidiary
of ME/U, has entered into a transponder lease agreement with a third party.
This agreement entitles Satellite Holdings to use a transponder (the
"Transponder") on a domestic communications satellite on a full-time basis.
In 1995, Satellite Holdings entered into a license agreement with Jones
Galactic Radio ("JGR"), an affiliate of International. This agreement
allows JGR to use a portion of the Transponder to distribute its audio
programming. JGR agreed to pay Satellite Holdings $58,025 per month
beginning in January 1995. Satellite Holdings has the right to terminate
the license agreement at any time upon 30 days written notice to JGR. The
amounts paid by JGR to Satellite Holdings for this service were $-0-, $-0-,
$696,300, $348,150 and $348,150 for the years ended December 31, 1993, 1994
and 1995, and the six months ended June 30, 1995 and 1996, respectively.

Education Products and Services Revenue
---------------------------------------
Mind Extension Institute, Inc. ("MEI"), a subsidiary of the Company,
provides cable-related instructional videos and other training materials to
multi-system cable operators, including Intercable and its subsidiaries and
managed partnerships. For the years ended December 31, 1993, 1994 and 1995
and the six month periods ended June 30, 1995 and 1996, MEI charged
Intercable and its affiliates $12,956, $252,054, $38,610, $21,910 and
$52,582, respectively for these instructional materials.

Network Expense
---------------
Jones Digital Century ("JDC"), a wholly-owned subsidiary of Jones
Interactive, Inc. ("JII", a wholly-owned subsidiary of International),
provides linear video production services for the Company and its
subsidiaries. Production services charges of $-0-, $-0-, $1,077,605,
$296,820, and $1,116,596, were incurred by the Company for the years ended
December 31, 1993, 1994 and 1995 and the six month periods ended June 30,
1995 and 1996, respectively.

Jones Earth Segment, Inc. ("Earth Segment"), a subsidiary of International,
provides playback, editing, duplication and uplinking services primarily to
its cable programming network affiliates. Earth Segment charges affiliates
for its services

F-11

using rates which are calculated to achieve a specified rate of return on
investment to Earth Segment. For the years ended December 31, 1993, 1994
and 1995, and the six month periods ended June 30, 1995 and 1996, Earth
Segment charged the Company and its subsidiaries $1,041,436, $1,695,428,
$1,884,481, $899,675, and $770,260, respectively for these services.

In 1994, JCN entered into a license agreement with Jones Space Segment,
Inc. ("Space Segment"), a subsidiary of International, to use a non-
preemptible transponder on a domestic communications satellite which Space
Segment currently leases. JCN agreed to pay Space Segment $66,667 per month
from September through December 1994 and $101,056 per month beginning
January 1995. Beginning in January 1996, the monthly transponder fee
charged to JCN decreased to $71,013 per month. Space Segment has the right
to terminate the license at any time upon 30 days written notice to JCN.
Monthly transponder expense may be adjusted periodically through the
December 2004 agreement expiration date, depending on the number of
networks being carried by the transponder. Transponder expenses of $0,
$266,668 and $1,212,675 were charged to JCN for the years ended December
31, 1993, 1994 and 1995, and $606,336 and $426,078 were charged to JCN for
the six-month periods ended June 30, 1995 and 1996, respectively.

General and Administrative Expense
----------------------------------
The Company leases office space in Englewood, Colorado from affiliates of
International. Rent and associated expenses are allocated to the Company
based on the amount of square footage it occupies. Office rent and
associated expenses of $211,020, $195,900, $373,333, $248,125, and
$156,008, were charged to the Company for the years ended December 31,
1993, 1994 and 1995, and the six months ended June 30, 1995 and 1996,
respectively.

JII provides computer hardware and software support services to the
Company. Computer expenses of $235,982, $449,273, $894,909, $458,692, and
$382,557, were charged to the Company for the years ended December 31,
1993, 1994 and 1995 and the six months ended June 30, 1995 and 1996,
respectively.

The Company and its consolidated subsidiaries reimburse International for
certain allocated administrative expenses. These expenses generally consist
of salaries and related benefits. Allocations of personnel costs are
generally based on actual time spent by affiliated associates with respect
to the Company. Such allocated expenses totaled $69,713, $359,207, $60,088,
$56,570, and $88,328, for the years ended December 31, 1993, 1994 and 1995
and the six months ended June 30, 1995 and 1996, respectively.

Interest Expense
----------------
To assist in funding its operating and investing activities, the Company
has borrowed funds from International and Intercable. International and
Intercable charged interest on their advances to the Company at rates of
approximately 8, 9, and 11 percent per annum in 1993, 1994 and 1995,
respectively, and approximately 11 percent per annum during the six months
ended June 30, 1995 and 1996. International's interest rate is calculated
using the published prime rate plus 2 percent. Intercable's interest rate
is calculated using Intercable's weighted average cost of borrowings plus 2
percent. Total interest charged by International for the years ended
December 31, 1993, 1994 and 1995 and the six month periods ended June 30,
1995 and 1996, was $694,757, $540,930, $1,147,667, $675,942 and $260,196,
respectively. Total interest charged by Intercable for the years ended
December 31, 1993, 1994 and 1995 and the six month periods ended June 30,
1995 and 1996 was $299,750, $2,093,740, $703,874, $703,874, and $-0-,
respectively.

While International has not established formal repayment terms and has
agreed not to demand repayment of these advances until at least July 1997,
the Company intends to repay the outstanding advances upon closing of the
offering. Because International has agreed not to demand repayment until at
least July 1997, the advances are considered long-term.

Periodically, International remits funds on behalf of the Company and its
subsidiaries to third parties and affiliates in payment of products and
services purchased by the Company and its subsidiaries in their normal
course of business. These amounts are then subsequently reimbursed to
International on a timely basis as revenue proceeds are received by the
Company. Due to their short-term nature, such amounts payable to
International are classified as a current liability in the accompanying
financial statements.

(5) COMMON STOCK
------------

Voting Rights
-------------
The Class A Common Stock has voting rights that are generally one-tenth of
those held by the Class B Common Stock. In the election of directors, the
holders of Class A Common Stock, voting as a separate class, are entitled
to
F-12

elect that number of directors that constitute approximately 25 percent of
the total membership of the Board of Directors of the Company. Holders of
the Class B Common Stock, also voting as a separate class, are entitled to
elect the remaining directors. Glenn R. Jones directly or beneficially owns
all of the Class B Common Stock.

Stock Splits
------------
Assuming the proposed offering is successful, the Board of Directors will
approve a stock split whereby each share of the Company's Class A Common
Stock will be exchanged into 285 shares of Class A Common Stock and each
share of the Company's Class B Common Stock will be exchanged into 285
shares of Class B Common Stock. These stock splits have been reflected
retroactively in the accompanying financial statements.

Stock Option Plan
-----------------
An employee stock option plan has been adopted to provide for the granting
of either incentive options or non-qualified options or a combination of
the two. The Company has reserved 1,100,000 shares of Class A Common Stock
pursuant to this plan. Options to purchase shares of Class A Common Stock
at the initial public offering price are expected to be granted to
employees concurrent with the offering. No options currently have been
granted under this plan.

(6) NOTES RECEIVABLE
----------------

The Company and ME/U each agreed to loan The International Community
College (the "College"), a non-profit entity of which the Company and ME/U
are members, $166,667, for a total of $333,334. As of June 30, 1996, the
Company and ME/U had each loaned $125,000 to the College pursuant to this
agreement. This note will accrue interest at 10 percent per annum. The
College will make quarterly principal and interest payments of $41,667 to
be split equally between the Company and ME/U. The principal and interest
payments will commence on July 1, 2000 with final payment on April 1, 2002.

This note receivable is not publicly traded, but management believes the
note is reflected on the balance sheets at values approximating estimated
fair market value.

(7) INCOME TAXES
------------

Prior to December 20, 1994, the Company and certain of its subsidiaries
joined in filing a consolidated tax return as provided for under the terms
of a tax sharing agreement with International and International's other
subsidiaries. Pursuant to the terms of the agreement, tax (provisions)
benefits are allocated to members of the tax sharing group based on their
respective pro rata contribution of taxable (income) loss to
International's consolidated taxable (income) loss. Income tax benefits
recognized as a result of the tax sharing arrangement were $407,868 and
$1,801,448 for the years ended December 31, 1993 and 1994, respectively.

The difference between the statutory federal income tax rate and effective
rate is summarized as follows (in thousands):

December 31, June 30,
1993 1994 1995 1995 1996
-------------------------- ---------------
(unaudited)

Computed "expected tax benefit" $ 3,521 $ 4,464 $ 4,652 $ 2,961 $ 801
State taxes, net of federal benefit 327 415 432 275 74
Other 1 15 24 13 18
------- ------- ------- ------- -----
3,849 4,894 5,108 3,249 893

Valuation allowance (3,441) (3,093) (5,108) (3,249) (893)
-------- -------- -------- -------- ------

Total income tax benefit $ 408 $ 1,801 $ - $ - $ -
====== ====== ====== ======= =====

F-13

The tax effect of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities are as follows(in the
thousands):

December 31, June 30,
1994 1995 1996
---------------- ---------
(unaudited)

DEFERRED TAX ASSETS:
Net operating loss carryforwards $ 9,369 $ 14,366 $ 15,354
Future deductible amounts associated
with other assets and liabilities 374 304 442
------- -------- --------
9,743 14,670 15,796
DEFERRED TAX LIABILITIES:
Investments in productions, property
and equipment (94) (102) (109)

VALUATION ALLOWANCE (9,649) (14,568) (15,687)
-------- --------- ---------

Net deferred tax asset $ - $ - $ -
======= ======== ========

At December 31, 1995, the Company had net tax operating loss carryforwards
of approximately $7,300,000, which expire in 2010. ME/U's net tax operating
loss carryforwards, which are not available to offset taxable income of the
Company, are approximately $30,300,000 at December 31, 1995. The
carryforwards expire between 2004 and 2010. Although management expects
future results of operations to improve, it emphasizes the Company's and
ME/U's past performance rather than growth projections when determining the
valuation allowance. Any subsequent adjustment to the valuation allowance,
if deemed appropriate due to changed circumstances, will be recognized as a
separate component of the provision for income taxes.

If the Company successfully completes its proposed offering of Class A
shares, an ownership change as defined under tax statutes may occur,
limiting the Company's yearly utilization of NOLs to offset future income.
Management believes that the application of the limitation will not likely
cause taxable income to occur in the near term due to unavailability of
limited NOLs.

(8) COMMITMENTS
-----------

Lease
-----

In June 1992, Satellite Holdings entered into a transponder lease agreement
with an unaffiliated third party. Under the terms of the lease agreement,
Satellite Holdings is required to pay $211,000 per month until 2004.

Other Commitments
-----------------

Under the terms of one of its affiliation agreements with a cable operator,
the Company pays a rebate to the cable operator equal to the operator's pro
rata share of 20% of net advertising revenue generated by ME/U Knowledge
TV. The operator's pro rata share is based on the number of subscribers in
its cable systems receiving ME/U as a percentage of the total number of
subscribers receiving the network. In addition, the Company pays the cable
operator a rebate equal to 5% of net sales receipts from sale of
merchandise made to customers in zip codes served by the cable operator's
systems carrying ME/U Knowledge TV. As of December 31,1995, these rebates
totaled approximately $35,000 and $61,000, respectively.

On May 29, 1996, the Company and M. Kane & Company, Inc. ("MKC") entered
into an agreement pursuant to which MKC agreed to provide financial advice
and assistance, including valuation-related analyses of the Company, advice
to the Company about strategic financial alternatives and assistance to the
Company in structuring and conducting an initial public offering. In
consideration for such services, MKC is being paid $20,000 per month from
June 1996 until the closing of the initial public offering. MKC is also
entitled to 1.875% of the gross proceeds of the initial public offering,
less the monthly retainer payments received by it, as well as reimbursement
for its reasonable out-of-pocket fees and expenses. This agreement will
terminate on the settlement date of the initial public offering.

F-14

Litigation
----------

In June 1996, the Company, ME/U and International were named as defendants
in a lawsuit brought by three parties to an agreement entered into that
provided for the distribution of ME/U Knowledge TV programming in Taiwan.
The plaintiffs allege that the Company, ME/U and International failed to
perform their obligations under the agreement, including failing to provide
the agreed upon programming hours for distribution in Taiwan. In addition,
the plaintiffs have alleged fraud by misrepresentation and concealment,
breach of contract and bad faith.

The amount of damages being sought by the plaintiffs has not yet been
specified. However, the Company believes that it has not breached the
related agreements and further believes that its defenses are meritorious
and intends to vigorously defend the litigation.

In addition to the above matter, the Company is involved in certain other
litigation. Management believes that the ultimate resolution of all of
these matters will not have a material adverse effect on the Company's
financial position or results of operations.

(9) EMPLOYEE INVESTMENT AND DEFERRED COMPENSATION PLANS

In 1990, the Company's employees became eligible to participate in an
Employee Profit Sharing/Retirement Savings Plan (the "401(k) Plan"). Under
the 401(k) Plan, eligible employees are permitted to defer receipt of up to
20% of their monthly compensation. The Company currently matches 50% of the
employees' deferrals up to a maximum of 6% of their monthly base pay, with
the Company's contribution vesting immediately. Contributions to the 401(k)
Plan are invested by the trustees of the 401(k) Plan in accordance with the
directions of each participant. Participants or their beneficiaries are
entitled to payment of benefits (i) upon retirement either at or after age
65, (ii) upon death or disability or (iii) upon termination of employment,
if the participant elects to receive payment prior to one of the events
previously listed. For the years ended December 31, 1993, 1994 and 1995 and
for the six months ended June 30, 1995 and 1996, the Company contributed
approximately $21,000, $54,000, $55,000, $30,000 and $38,000, respectively,
to the 401(k) Plan on behalf of its employees.

In 1995, certain of the Company's key management personnel became eligible
to participate in a Deferred Compensation Plan (the "Deferred Compensation
Plan"). Under the Deferred Compensation Plan, key employees are permitted
to defer receipt of 100% of their annual compensation. The Company
currently matches the key employees' deferrals up to a maximum of 6% of
their contributions. The contributed funds are deposited with an
independent trustee and are invested in a number of pre-selected investment
funds. Both the key employees' and the Company's contributions are subject
to the claims of the Company's creditors. Participants in the Deferred
Compensation Plan receive a distribution of their contributions, the
Company's contributions, and earnings attributable to those contributions
on their separation from employment with the Company or their death.
Contributions made by the Company to the Deferred Compensation Plan on
behalf of key employees totaled approximately $10,000, $26,000, $30,000,
$12,000 and $17,000 for the years ended December 31, 1993, 1994, and 1995
and for the six month periods ended June 30, 1995 and 1996, respectively.

F-15

================================================================================

No dealer, sales representative or any other person has been authorized to
give any information or to make any representations in connection with this
offering other than those contained in this Prospectus, and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Company or any of the Underwriters. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities
other than the shares of Class A Common Stock to which it relates or an offer
to, or a solicitation of, any person in any jurisdiction where such an offer or
solicitation would be unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication that
there has been no change in the affairs of the Company since the date hereof or
that the information contained herein is correct as of any time subsequent to
the date hereof.

______________________________

TABLE OF CONTENTS
______________________________

Page
----

Prospectus Summary........................................................... 3
Risk Factors................................................................. 8
Use of Proceeds............................................................. 16
Dividend Policy............................................................. 16
Capitalization.............................................................. 17
Dilution.................................................................... 18
Selected Consolidated Financial Data........................................ 19
Management's Discussion and Analysis of
Financial Condition and Results of Operations.............................. 21
Business.................................................................... 30
Management.................................................................. 45
Certain Relationships and Related Transactions.............................. 54
Principal and Selling Shareholders ......................................... 58
Description of Capital Stock................................................ 60
Shares Eligible for Future Sale............................................. 63
Underwriting................................................................ 65
Legal Matters............................................................... 68
Experts..................................................................... 68
Additional Information...................................................... 68
Index to Consolidated Financial Statements................................. F-1

Until , 1996 (25 days after the date of this
Prospectus) all dealers effecting transactions in the Class A Common Stock,
whether or not participating in this distribution, may be required to deliver a
Prospectus. This is in addition to the obligation of dealers to deliver a
Prospectus when acting as Underwriters and with respect to their unsold
allotments or subscriptions.

================================================================================

6,900,000 SHARES

[LOGO]

JONES EDUCATION NETWORKS, INC.

CLASS A COMMON STOCK

____________________

PROSPECTUS
____________________

Montgomery Securities

Piper Jaffray Inc.

M. Kane & Company, Inc.

, 1996

================================================================================

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the costs and expenses, other than
underwriting discounts and commissions and the $2 million payable to M. Kane &
Company, Inc. for financial advisory services, payable by the Company in
connection with the sale of Class A Common Stock being registered (all amounts
are estimated except the SEC Registration Fee and the NASD Filing Fee).

SEC Registration Fee .............................................. $ 43,780
National Association of Securities Dealers, Inc. Filing Fee........ 13,200
Nasdaq Listing Application Fee..................................... 33,500
Blue Sky Qualification Fees and Expenses (including legal fees).... 25,000
Printing Expenses.................................................. 115,000
Legal Fees and Expenses............................................ 175,000
Accountants' Fees and Expenses..................................... 100,000
Transfer Agent and Registrar Fees.................................. 20,000
Miscellaneous Expenses............................................. 24,520
-------
Total..................................................... $550,000
=======

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

II-1

reasonable expenses incurred by the director and prohibits any indemnification
if the director was adjudged liable to the corporation. The Colorado Act also
prohibits indemnification of a director in connection with actions charging
improper personal benefit to the director if the director is adjudged liable on
that basis.

Section ____ of the Underwriting Agreement (to be filed as Exhibit 1.1
hereto) provides that the Underwriters will indemnify and hold harmless the
Company, and each of the Selling Shareholders and their respective directors,
officers and controlling persons from and against certain liabilities, including
any liability caused by any statement or omission in the Registration Statement
or Prospectus based on certain information furnished to the Company by the
Underwriters for use in the preparation thereof.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

In the three years preceding the filing of this registration statement, the
Company has issued the following securities that were not registered under the
Securities Act of 1933, as amended (the "Securities Act") (all share amounts
reflect the proposed 285-for-1 stock-split):

On March 18, 1996, the Company issued 144,210 shares of Class A Common
stock and 144,210 shares of Class B Common Stock to Jones International in
return for the cancellation of approximately $6.3 million of debt owed by the
Company to Jones International.

On April 10, 1995, the Company issued 915,705 shares of Class A Common
Stock to Jones Intercable in return for the cancellation of approximately $20
million of debt owed by one of the Company's subsidiaries to Intercable.

On December 20, 1994, BCI purchased 686,850 shares of Class A Common Stock
for $18 million.

The Company issued all of the foregoing shares of Class A Common Stock in
reliance on the exemption from registration provided by Section 4(2) of the
Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

Exhibit
Number Description of Exhibit
------ ----------------------

1.1* Form of Underwriting Agreement
3.1 Articles of Incorporation of the Company
3.2 Bylaws of the Company
4.1* Form of Class A Common Stock Certificate
4.2 Shareholder Agreement dated as of December 20, 1994 among Glenn R.
Jones, Jones International, Ltd., Bell Canada International Inc.
and Jones Education Networks, Inc.
4.3 Registration Rights Agreement, dated August 7, 1996, among Jones
Education Networks, Inc., Glenn R. Jones and Jones International,
Ltd.
4.4* Warrant Purchase Agreement, dated _____________, 1996, between
Jones Education Networks, Inc. and M. Kane & Company, Inc.

II-2

5.1* Form of Opinion of Davis, Graham & Stubbs LLP as to the legality
of issuance of the Company's Class A Common Stock
10.1* Agreement dated as of July 1, 1994 between Jones Education
Networks, Inc. and The Board of Trustees of the California State
University by and on behalf of California State University
Dominguez Hills
10.2* Agreement dated as of October 29, 1993 between Jones Education
Networks, Inc. and Regis University
10.3* Agreement dated November 14, 1995 between Jones Education
Networks, Inc. and the Regents of the University of Colorado, on
behalf of the University of Colorado at Colorado Springs
10.4* Agreement dated as of March 1, 1996 between Jones Education
Networks, Inc. and Seattle Central Community College
10.5* Agreement dated September 29, 1994 and Addendum dated May 3, 1996
between Jones Education Network, Inc. and the University of
Delaware
10.6 Production Agreement dated September 1, 1995 between Jones
Education Networks, Inc. and The Chronicle Publishing Company
10.7 Programming Distribution Agreement dated December 1, 1994 between
Jones Education Networks, Inc. and Telecom Holding Company
10.8 Program License Contract dated as of June 28, 1996 between Jones
Education Network/China, Inc. and China Education TV Productions
10.9* Affiliate Agreement dated as of January 10, 1994 between Mind
Extension University, Inc. and Cox Cable Communications
10.10* Affiliate Agreement dated as of April 6, 1994 between Mind
Extension University, Inc. and Marcus Cable Company, L.P.
10.11* Master Agreement dated December 12, 1995 between Mind Extension
University, Inc. and the National Cable Television Cooperative,
Inc.
10.12* Affiliation Agreement dated as of January 1, 1991 between Mind
Extension University, Inc. and Satellite Services, Inc.; letter
amendment dated January 1, 1991; and letter amendment dated April
27, 1995
10.13* Affiliate Agreement dated as of October 25, 1993 between Mind
Extension University, Inc. and Telesynergy, Inc.
10.14* Cable Affiliate Agreement dated as of August 1, 1994 between Mind
Extension University, Inc. and Time Warner Cable
10.15* Agreement dated as of October 1, 1991 between Mind Extension
University, Inc. and The George Washington University
10.16 Representation Agreement dated as of July 15, 1994 between
Higher Education Group, Inc. and Jones Education Networks, Inc.
10.17 Programming Distribution Agreement dated as of September 28,
1994 between Jones Education Networks, Inc. and Space Vision, Inc.
10.18 Amendment Agreement dated as of September 28, 1994 between Higher
Education Group, Inc. and Jones Education Networks, Inc.
10.19 Letter Agreement dated February 24, 1995 between Jones Education
Networks, Inc. and Higher Education Group, Inc.
10.20 Agreement dated as of November 18, 1994 between Jones Education
Networks, Inc. and Space Vision, Inc.
10.21 Services Agreement dated as of December 16, 1994 between Jones
Education Networks, Inc. and Jones Interactive, Inc.

II-3

10.22 Transponder Licenses Agreement dated as of January 1, 1995 between
Jones Space Segment, Inc., Jones Infomercial Networks, Inc. and
Jones Computer Network, Ltd.
10.23* Affiliate Agreement dated as of December 28, 1993 between Mind
Extension University, Inc. and Jones Intercable, Inc.
10.24* Affiliate Agreement, dated as of June 27, 1996, between Mind
Extension University, Inc. and Corporate Media Partners.
10.25 Transponder Licenses Agreement, dated as of January 1, 1995, among
Jones Satellite Holdings, Inc., Jones Galactic Radio, Inc. and Mind
Extension University, Inc.
10.26 Letter Agreement, dated May 29, 1996, between Jones Education
Networks, Inc. and M. Kane & Company, Inc.
21 Subsidiaries
23.1 Consent of Arthur Andersen LLP
23.2* Consent of Davis, Graham & Stubbs LLP (See Exhibit 5.1)
24 Power of Attorney (included on Page II-6)
27 Financial Data Schedule

____________________

* To be filed by amendment.

Schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions, are inapplicable and therefore have been omitted or the
information required by the applicable schedule is included in the notes to the
financial statements.

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Purchase Agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the Company's Bylaws, Certificate of Incorporation or the
Purchase Agreement, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance

II-4

upon Rule 430A and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was declared
effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Englewood,
State of Colorado, on August 29, 1996.

JONES EDUCATION NETWORKS, INC.

By: /s/ Wallace W. Griffin
-------------------------------------------
Wallace W. Griffin
President

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
herein constitutes and appoints Glenn R. Jones, Wallace W. Griffin and Elizabeth
M. Steele, and each of them, as his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
to this Registration Statement (including post-effective amendments), including
a registration statement filed pursuant to Rule 462(b) under the Securities Act
of 1933, as amended, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURES TITLE DATE
- ---------- ----- ----

/s/ Glenn R. Jones Chairman of the Board of Directors August 29, 1996
- -------------------------- and Chief Executive Officer
Glenn R. Jones Principal Executive Officer)

/s/ Wallace W. Griffin President and Director August 29, 1996
- --------------------------
Wallace W. Griffin

/s/ Scott A. Wheeler Group Vice President/Operations August 29, 1996
- -------------------------- and Director
Scott A. Wheeler

/s/ Paul R. Amos Vice President/International Business August 29, 1996
- -------------------------- Development and Director
Paul R. Amos

/s/ Stephanie L. Garcia Vice President/Chief Financial August 29, 1996
- -------------------------- Officer (Principal Financial Officer)
Stephanie L. Garcia

II-6

/s/ Keith D. Thompson Chief Accounting Officer August 29, 1996
- -------------------------- (Principal Accounting Officer)
Keith D. Thompson

__________________________ Director
Barbara B. Lawton, Ph.D.

__________________________ Director
Robert J. Malone

/s/ Siim A. Vanaselja Director August 29, 1996
- ----------------------
Siim A. Vanaselja

II-7