Rosetta Stone 2015 Annual Report Download - page 7

Table of Contents
Rosetta Stone provides intuitive, easy-to-use learning programs that are available under a web-based
software subscription and in perpetual formats including digital download and CD. Our language-learning suite offers courses and practice applications in
multiple languages, each leveraging our proprietary immersion methodology and innovative technology features. Beginner to intermediate language-
learning products are available in 30 languages to build fundamental language skills. Advanced language-learning products are available in 9 of the 30
languages and focus on improving everyday and business language skills. We also offer online services to enhance and augment our learners' capabilities.
Our Online Tutoring is an online service that provides conversational coaching sessions with native speakers to practice skills and experience direct
interactive dialogue. Our Online Games and Activities are online services that provide a world-wide community for users around the world with games,
online chat, and other features to improve language skills. Many of our perpetual language-learning offerings include access to Online Tutoring. Almost all
of our language-learning offerings for consumers include access to Online Games and Activities. Our current suite of mobile language-learning apps includes
companions to our computer-based language-learning solutions.
 Rosetta Stone Fit Brains solutions are designed to enhance memory, mood, concentration, thinking and problem-solving skills
using brain training exercises that are exciting and challenging. Our Fit Brains system targets all six major brain areas including memory, concentration,
speed, visual, language, and problem solving. Our brain fitness solutions include a web-based subscription and several brain training apps that feature more
than 40 scientifically designed brain training games. Included in a Rosetta Stone Fit Brains subscription are performance tracking tools to view training
progress and compare performance with others of the same age and gender.
Rosetta Stone Kids mobile apps provide technology-based learning solutions for children that focus on early childhood language
and literacy. Rosetta Stone Kids Reading app was launched in 2014 aimed to teach children aged 3-7 how to read using engaging self-paced interactive
games and activities that introduce and reinforce core reading skills. Rosetta Stone Kids Reading uses award-winning, research-proven technology focused
on phonological awareness, phonics, vocabulary, fluency, and comprehension. Rosetta Stone Kids Reading includes dozens of games and stories, plus
hundreds of fun activities. Fit Brains for Kids Sparky's Adventures offers a first-of-its-kind cognitive approach to child learning and brain development that
provides a fun and healthy collection of brain games for children aged 2-8. In 2013 we launched Rosetta Stone Kids Lingo Letter Sounds and Rosetta Stone
Kids Lingo Word Builder apps for children aged 3-6 that provide blended learning solutions to introduce kids to both basic literacy skills and a foreign
language.
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Our offering portfolio is a result of significant investment in software development. Our software development efforts include the design and build of
software solutions across a variety of devices, pedagogy and curriculum development, and the creation of learning content. Our development team builds
new solutions and enhances or maintains existing solutions. We have specific expertise in speech recognition technology, iterative and customer-focused
software development, instructional design, and language acquisition.
Our research and development expenses were $29.9 million, $33.2 million, and $34.0 million for the years ended December 31, 2015, 2014 and 2013,
respectively.
We continue to evaluate changes to our solutions to strengthen our brand and improve the relevance of our offering portfolio. We are focused on
completing the alignment of our three language platforms and moving towards the consolidation of our legacy platforms to offer our customers a single
solution that provides streamlined access and simplified pricing for the full suite of English and world language learning content, along with assessment,
placement, ongoing reporting and demonstration of results, all of which address important customer needs to focus and demonstrate payback.
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:
Our Enterprise & Education language-learning distribution channel is focused on targeted sales activity primarily through a direct sales force in five
markets: K-12 schools, colleges and universities, federal government agencies, not-for-profit organizations, and corporations. Our Enterprise & Education
language-learning customers include the following:
 These customers include primary and secondary schools and colleges and universities.
 These customers include government agencies and organizations developing
workforces that serve non-native speaking populations, offering literacy programs, and preparing members for overseas missions.
 We promote interest in this market with onsite visits, trade show and seminar attendance, speaking engagements, and direct mailings.
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