Compass Knowledge Reports Q2 Revenue Increase and Improved Margins.

Business Editors

OCOEE, Fla.--(BUSINESS WIRE)--Aug. 14, 2000

Compass Knowledge Holdings, Inc. (OTCBB:CKNO), a leading e-learning and distance education provider, announced today that revenue in the second quarter of 2000 increased 10% to $732,130 compared with revenue of $665,785 in the second quarter of 1999. Gross profit margins improved to 84.5% in the second quarter of 2000 from 72.6% in the year ago period. However, due to a delay in closing two planned acquisitions which were expected to provide the Company with immediate earnings and the Company's planned investment in personnel and infrastructure, Compass reported a net loss for the second quarter of 2000 of $69,955 compared to net income of $62,663 in the comparable quarter of 1999.

For the first six months of 2000, total revenue rose 12% to $1,426,527 compared with $1,273,164 in the first six months of 1999. Gross profit margins improved to 78.2% in the first six months of the year from 76.0% in the year ago period. For the first six months of the year, the net loss was $26,721 vs. a net income of $176,930 in the first six months of 1999. This loss is attributed primarily to the same factors that resulted in a loss in the second quarter.

Building For Future Growth

Rogers Kirven, CEO of Compass Knowledge, said, "We are pleased to report gains in revenue which reflected the growth of our core degree business and I am gratified by the improvement in our gross margins, reflecting increased leverage of our business model. The results for the quarter reflected our investments in acquisitions, personnel and infrastructure that are essential to handling our expected future growth. We have made upgrades to our marketing, knowledge partner development, curriculum design and information technology systems as well as adding three new senior executives. Looking toward the second half of this year, we anticipate strong growth in revenues as new courses are added to our three core business segments of Health, Education and Law, and our student enrollment in current programs continues to increase."

CKNO is a premier provider of integrated distributed learning solutions that put the web to work on behalf of the working professional seeking a degree or certificate to advance their career. The company collaborates with regionally accredited colleges and universities to create, develop and deliver degree and certificate programs through its brands and portals. Through the Compass Learning System(TM), the company offers students access to knowledge anytime, anywhere, combining the richness of the offline experience with the reach of the Internet.

The information provided through this press release is excerpted from documents filed with the Securities and Exchange Commission (SEC) on Form 10-QSB and should not be relied upon without review of the full documents. Statements made in this press release, other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking forward statements are made pursuant to the `safe-harbor' provisions of the Private Securities Litigation Reform Act of 1995 and are made based on management's current expectations or beliefs as well as assumptions made by, and information currently available to management. A variety of factors could cause actual results to differ materially from those anticipated in Compass' forward-looking statements, including the following factors: Recent acquisitions involve products and services in areas in which Compass does not currently operate; these acquisitions will require management to develop expertise in new areas and to attract new customers, both of which may be difficult to do; likewise, Compass might experience slower than expected integration efforts and increased costs with respect to these and other acquisitions; Compass' operating results could be materially impaired if the revenue splits with its Knowledge Partners are deemed to be "incentive payments" under Title IV or Compass' becomes subject to burdensome government regulation and legal uncertainties; Compass' ability to attract new knowledge partners and alliances, Compass' ability to manage its growth and to respond to rapid technological change; market acceptance of new products and services, including its legal and education programs; continued development of effective marketing, pricing and distribution strategies; competitive pressures among distance education providers may increase significantly; costs or difficulties related to the integration of businesses, if any, acquired or that may be acquired by Compass may be greater than expected; operating costs or customer loss and business disruption following future mergers and acquisitions may be greater than expected; possible adverse results of future litigation; general economic or business conditions; legislative or regulatory changes may adversely affect the business in which Compass is engaged; and changes in the securities markets may negatively impact Compass. For a detailed discussion of cautionary statements and factors that could cause actual results to differ from the Company's forward-looking statements, please refer to the Company's filings with the Securities Exchange Commission, especially in the "Risk Factors" section of the Company's Form 10Q and Form10-SB and in subsequent filings filed with the Securities Exchange Commission.