Institutions that plan to offer the
Academic Profile test before the new version is released in January
2006 can purchase the current test until June 30, 2005."
The new test will include all features of Academic Profile but
with such additional features and enhancements as Web and
paper-and-pencil delivery and an optional essay module using
e-rater(R), ETS's automated essay scoring engine. Like the Academic Profile, the new
test will also support accreditation and the annual strategic planning
process, student counseling, and performance -based funding.

soundout northrop

The new test will be available in January 2006.org/hea/acpro/successor. Income
from continuing operations before income taxes for the quarter was
$197,048 versus $168,632, reflecting an increase of 17 percent over
the same 2004 quarter. Stockholders'
equity increased by 1 percent to $5,458,200.

soundout skeptical

org

About ETS

ETS is a nonprofit institution with a long-held commitment to
advance learning. The mission of ETS is to advance quality and equity
in education by providing fair and valid assessments, research and
related services for all people worldwide. Net revenues for the 2005 first
quarter were $2,339,607, compared to $2,530,266 for the same quarter
of 2004 . However, the
$2,159,532 in core unit revenue level attained in this seasonally slow
quarter represents the second-highest first quarter sales performance
reported by the Company.
"With respect to subsidiary operations, the Company is engaged in
early discussions with other companies, which have expressed an
interest in assuming the financial responsibility for Learning
Pathways.

aloud introduce

In December 2004 , ETS and the College Board, shared owners of
Academic Profile since 1987, announced that after June , they will no
longer sell the Academic Profile. The new test will be
offered in two standard forms (two-hour test) and six abbreviated
forms (40-minute test).html or contact ETS at 1-800-745-0269
or highered@ets.
Gross margins for the core AEC software publishing business remained
at approximately 96 percent of net revenues, consistent with
historical results. However, consolidated gross margins for this
period did not reflect the contribution of the UK-based subsidiary,
Learning Pathways , which was written down to zero value as impaired in
December 2004, and is now held for sale and considered a discontinued
operation. These
forward-looking statements can be identified as such by words such as
"believes," "anticipates," "plans," "expects" or words of similar
import.

systemic accrediting

--- -ETS announced
today the development of a new general academic knowledge and skills
test to succeed the Academic Profile. Butler, Chief Executive
Officer of the Company, stated, "The core AEC operating unit revenues
declined 6 percent during our 2005 first quarter as a result of a
single large order that was received in the same 2004 quarter,
creating a real challenge to maintain growth momentum ., UK and other
international locations.

pathways accelerated

Consolidated gross margins for the quarter ended March 31, 2005
were $1,997,758, or 85 percent of net revenues, which included the
results for the Dolphin subsidiary operations on a consolidated basis,
and which represents a decrease as a percent of revenues of 2 percent
over the prior year's quarterly period of $2,189,400 and 87 percent . The Company's bank
debt declined 24 percent to $283,761 from $371,862.0 of educational software products,
provides for an integrated offering of grade levels 1-12 software for
Reading, Mathematics , Language Arts, Science, Writing, History,
Government, Economics and Geography. In addition, the Company provides
assessment testing and instructional content for the General
Educational Development (GED) test. Spanish-language versions are
available for Mathematics and Language Arts for grade levels 1-8. EBITDA should not be
construed as an alternative to net income (loss) as determined in
accordance with GAAP, as an alternative to cash flows from operating
activities as determined in accordance with GAAP or as a measure of
liquidity.

introduce systemic

J.ets.
At March 31, 2005, total assets increased 5 percent to $8,717,688
as compared to $8,277,572 at December 31, 2004. During the quarter, the
Company reached an agreement with its bank to extend its revolving
loan arrangement until March of 2006.

0 and 4.003) (.

thinking skeptical

The new test is structured so that additional
modules may be added in the future .
The A+LS comprehensive family of educational software is now in use in
over 11,000 schools, centers of adult literacy, colleges and
universities, and correctional institutions in the U.

literacy solving

The new ETS general education
assessment will be an enhanced version of the current Academic Profile
test , which measures college-level reading, writing, critical thinking
and mathematics in the context of the humanities, social sciences and
natural sciences. ETS will
continue to score the current test for one year, until June 30, 2006. The decline in consolidated net revenues is primarily
attributable to a major 2004 sale, which was recorded in the first
quarter of the prior year.

Statement of Income
Three Months Three Months
Ended Ended
March 31, March 31,
2005 2004 %
(unaudited) (unaudited) Change
------------ ---- -------- --------

Sales $ 2,339,607 $ 2,530,266 (8%)

Operating income from continuing
operations 207,578 183,913 13%

Income from continuing operations
before income taxes 197,048 168,632 17%

Income from continuing operations 118,229 101,755 16%

Loss from discontinued operations (52,743) (80,750) (35%)

Net Income 65,486 21,005 212%

Earnings per share - diluted
Weighted average shares
outstanding 16,665,726 15,427,021

Continuing operations $ . The Company
believes that EBITDA provides meaningful additional information
concerning a company's operating results and its ability to service
its long-term debt and other fixed obligations and to fund its
continued growth.

vii thinking

Business Editors/Education Editors/Technology Editors

OKLAHOMA CITY----The American
Education Corporation (AEC) (OTCBB:AEDU) today announced that
quarterly consolidated net revenues declined by 8 percent for the
first quarter ended March 31, 2005. The traditional lower gross margins of the Dolphin
subsidiary, when consolidated into the Company's financial results ,
averaged down overall consolidated gross margin performance." The pretax losses of $87,905 that were experienced by the
subsidiary still impacted after-tax profitability by $52,743.

skeptical grumman

ETS Announces New General Education Test to Replace Academic Profile

ETS
will announce the new test's name later this spring.004 for the quarterly period. The future performance of the Company is subject to a number
of factors including, but not limited to, general economic conditions,
competitive activity and funding available to schools.

meaningful sedl

Consolidated 2005 first quarter net
income increased 212 percent to $65,486 from $21,005, resulting in
earnings per share of $0. See the consolidated statement of cash flows in
the consolidated financial statements filed in the Company's Form
10-QSB.

scheduling remove

The American Education Corporation Reports Profitable 2005 First Quarter Performance

aloud engage

Higher education administrators and assessment directors will be
able to equate scores from the new test with those from the current
Academic Profile, allowing institutions to continue collecting data
for longitudinal and cross -sectional studies without disruption.
For more information, college and testing administrators can visit
www. In serving individuals,
educational institutions and government agencies around the world, ETS
customizes solutions to meet the need for teacher professional
development products and services, classroom and end-of-course
assessments, and research-based teaching and learning tools . Despite the decline in first quarter
revenues, it represents the second-highest sales volume for any first
quarter recorded by the Company.
Commenting on the results, Jeffrey E. Additionally , we are reviewing the Dolphin
subsidiary operations to determine appropriate measures related to the
structure and future of this business unit," concluded Mr.

The Company's Java-based technology , the A+nyWhere Learning
System(R) Versions 3.
ACCUPLACER and ACCUPLACER OnLine are either trademarks or
registered trademarks owned by the College Entrance Examination Board,
New York, NY.007 $ .006 17%
Discontinued operations (.

achievement grumman

Gains in business profitability from AEC's core business unit were
offset by losses of approximately $100,000 at the Dolphin subsidiary .
"AEC's core business growth continues to be driven by quality
products, and the Company is securing increasingly larger orders for
inbound site license, online and product upgrade-based orders.

involvement barriers

Learning Pathways, the Company's UK operation, was written down to
zero value as "impaired" in the closing quarter of 2004, is being held
for sale, and as a result is now accounted for as a "discontinued
operation.

knowledgebase accrediting

The abbreviated forms will yield additional
data for research and analysis, such as individual sub-scores and
assessment indicators. During
the quarterly period, total operating expenses decreased 11 percent as
compared to the year-ago quarter, while operating expenses as a
percentage of revenues declined by 2 percent to 77 percent. The Company has
developed a computer adaptive, companion academic skill assessment
testing tool to provide educators with the resources to more
effectively use the Company's curriculum content aligned to important
state and national academic standards.004 $ . Because EBITDA is not calculated in the same manner by all
companies , it may not be comparable to other similarly titled measures
of other companies.

accelerated introduce

Butler.

meaningful accrediting

A+dvancer Online Courseware(TM), the
Company's new diagnostic, prescriptive test and online developmental
curriculum offering, is aligned to ACCUPLACER OnLine(R) , the leading
college placement test for students requiring developmental support to
enroll in full credit secondary coursework in mathematics, reading,
algebra and writing. Many financial analyst consider EBITDA may be a
meaningful indicator of future profitability .

skeptical literacy

Pretax income for the Company's core business
unit increased for the quarter by 23 percent to $364 ,968 versus the
$296,249 reported for 2004, representing pretax earnings of 17 percent
of revenues .S.

solving aloud

"Colleges and universities have used the Academic Profile for
nearly two decades to measure student achievement, evaluate program
effectiveness, and benchmark performance," says Mari Pearlman , Senior
Vice President of ETS's Higher Education Division. "The new test will
have enhancements that will allow for more flexibility and more
informative results, while ensuring that institutions can equate data
collected from the new test with that of the old.

grumman pathways

We expect to announce the results of these discussions
during our second quarter. All company products are designed
to provide for LAN, WAN and Internet delivery options.

Note: Certain matters discussed above concerning the future
performance of the Company are forward-looking statements intended to
qualify for the safe harbors from liabilities established by the
Private Securities Litigation Reform Act of 1995.005 ) (40%)
----------- -----------
Total $ .

The School Improvement category is designed to provide K-12 instructors and administrators with specific instructional strategies within the context of the school improvement model advanced by the North Central Association or similar accrediting organizations.

vii introduce

Business Editors/College Writers/Education Editors

PRINCETON, N. Founded
in 1947 and based in Princeton , New Jersey, ETS develops, administers
and scores more than 24 million tests annually in more than 180
countries, at over 9,000 locations worldwide.001 300%
=========== ===========

Balance Sheet Data
March 31, December 31,
2005 2004 %
(unaudited) (audited) Change
------------ ------------ --------

Current Assets $ 3,582,555 $ 3,102 ,531 15%

Total Assets 8,717,688 8,277,572 5%

Current Liabilities 2,265,054 2,004,582 13%

Stockholders' Equity 5,458,200 5,392,714 1%

Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA)

Disclosure of Calculations for the Three Months Ended March 31, 2005

Three Months Ended
March 31
---------------------------
2005 2004
------------ ------------
(Unaudited) (Unaudited)
Net income $ 65,486 $ 21,005
Add back non-EBITDA items included in net
income:
Depreciation and amortization 394,344 400,896
Interest expense 10,530 15,281
Income tax provision 43,657 66,877
------------ ------------
EBITDA $ 514,017 $ 504,059
============ ============

EBITDA represents earnings (loss) from continuing operations
before interest income, interest expense, income taxes, depreciation,
amortization, other income and impairment of goodwill.

systemic remove

EBITDA for the quarter increased by 2 percent over the prior
year's period to $514,017 versus $504,059 and represented 22 percent
of consolidated net revenues. The
Company's curriculum content is aligned to the other third party
digital resources such as the World Book Multimedia Encyclopedia and
GoKnow's scientifically based, Internet accessible curriculum and
reference materials, which may be accessed directly from A+LS lessons.

introduce aloud

The Company's term loan with its
bank will be fully paid in November of 2005.