Rosetta Stone 2014 Annual Report Download - page 29

Table of Contents
(2) As discussed in Note 5 of Item 8, , the Company acquired Livemocha, Inc. on April 1, 2013 and
acquired Lexia Learning Systems, Inc. on August 1, 2013. The results of operations from these entities have been included from the acquisition date.
(3) As discussed in Note 15 of Item 8, , the Company established a full valuation allowance to reduce the
deferred tax assets of the Korea, Brazil, and Japan subsidiaries and the U.S.
(4) On January 4, 2011 the Company's Board of Directors approved the Rosetta Stone Inc. Long Term Incentive Program ("LTIP") and then
subsequently cancelled the LTIP on November 30, 2011, resulting in $4.9 million additional operating expense.
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
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




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

Cash and cash equivalents
$ 64,657
$ 98,825
$ 148,190
$ 106,516
$ 115,756
Total assets
288,404
290,776
279,446
280,059
278,804
Deferred revenue
128,169
78,857
63,416
51,895
47,158
Notes payable and capital lease
obligation
3,748
242
5
12
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Total stockholders' equity
$ 63,445
$ 131,243
$ 148,194
$ 172,951
$ 179,724







Rosetta Stone Inc. (“Rosetta Stone,” “the Company,” “we” or “us”) is dedicated to changing the way the world learns. Our innovative, technology-
driven language and reading solutions are used by thousands of schools, businesses, and government organizations millions of individuals around the world.
Founded in 1992, Rosetta Stone pioneered the use of interactive software to accelerate language learning. Today we offer courses in 30 languages across a
broad range of formats, including online subscriptions, digital downloads, mobile apps, and perpetual CD packages. Rosetta Stone has invested more in
language learning and expanded beyond language learning and deeper into education-technology with its acquisitions of Livemocha Inc. ("Livemocha") and
Lexia Learning Systems Inc, ("Lexia") in 2013 and Vivity Labs, Inc. ("Vivity"") and Tell Me More S.A. ("Tell Me More") in January 2014.
We derive our revenues from sales to both individual consumers and organizations. Our global consumer distribution channel comprises a mix of our
call centers, websites, third party e-commerce websites such as Digital River and Apple iTunes, select retail resellers, such as Amazon.com, Barnes & Noble,
Target, Best Buy, Books-a-Million, Staples, Costco, daily deal partners such as Groupon, home shopping networks such as GS Home Shopping in Korea and
consignment distributors such as Wynit Distribution and Software Packaging Associates. Our Global Enterprise & Education distribution model is focused on
targeted sales activity primarily through a direct sales force in five markets: K through 12 schools; colleges and universities; federal government agencies;
corporations; and not-for-profit organizations, as well as through a network of third-party resellers of our literacy solutions.
Over the last two years, we have expanded the breadth of our language and literacy products with the acquisitions of Tell Me More and Lexia. These
acquisitions have reinforced our belief that the Enterprise & Education segment is our largest opportunity for long-term value creation. The customers in
these markets have demands that recur each year, creating a more predictable revenue opportunity. This demand profile also fits well with our suite of
products and the well-known Rosetta Stone brand. We also believe the opportunity to deliver English language learning is growing around the globe.
As a result, we recently communicated a strategic reorganization and realignment of our business to accelerate and prioritize our focus on satisfying the
needs of more serious Corporate and K-12 learners, and emphasizing those who need to speak and read English. This focus will carry over to the Consumer
segment where we will prioritize more serious learners,
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