Rosetta Stone Inc. (NYSE:RST) Files An 8-K Entry into a Material Definitive Agreement

Rosetta Stone Inc. (NYSE:RST) Files An 8-K Entry into a Material Definitive Agreement

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Item 1.01. Entry into a Material Definitive Agreement.

On April 25, 2017, Rosetta Stone Ltd. (Rosetta Stone), a
wholly-owned subsidiary of Rosetta Stone Inc. (the Company),
entered into a Purchase and Sale Agreement (the Purchase
Agreement) with Rosetta Stone Japan Inc., a Japanese corporation
and wholly-owned subsidiary of Rosetta Stone (the Japan
Subsidiary), and SOURCENEXT Corporation, a Japanese corporation
(SOURCENEXT). to the Purchase Agreement, Rosetta Stone has agreed
to sell, and SOURCENEXT has agreed to purchase (the Sale), of all
the outstanding shares of the Japan Subsidiary. The consideration
to be paid by SOURCENEXT to Rosetta Stone in connection with the
Sale is US$500,000, subject to certain adjustments as provided in
the Purchase Agreement, payable in Japanese Yen (JPY) using the
Telegraphic Transfer Middle Rate per The Bank of Tokyo-Mitsubishi
UFJ as of the date of the Purchase Agreement.
The Purchase Price is subject to certain adjustments based on,
among other things, closing payables and closing receivables of
the Japan Subsidiary.
Representations and Warranties; Covenants; Taxes
Each of Rosetta Stone and SOURCENEXT has made customary
representations, warranties, covenants and indemnification
obligations in the Purchase Agreement. Rosetta Stone has further
agreed not to solicit alternative transactions and, subject to
certain exceptions, not to enter into discussions concerning, or
provide confidential information in connection with, an
alternative transaction. to the terms of the Sale, Rosetta Stone
will generally assume any pre-Closing tax liability of the Japan
Subsidiary.
Closing Conditions
The Closing is subject to certain conditions, including, among
others, (i) the accuracy of the representations and warranties of
the parties, and compliance by the parties with their respective
obligations under the Purchase Agreement and (ii) the absence of
any regulatory body, law or order restraining, enjoining or
otherwise prohibiting the consummation of the Sale.
Termination
The Purchase Agreement may be terminated by Rosetta Stone or
SOURCENEXT in certain circumstances, including, subject to
certain exceptions, if the consummation of the Sale has not
occurred by September 30, 2017 (the Outside Date).
The foregoing description of the Purchase Agreement is not
complete and is qualified in its entirety by reference to the
Purchase Agreement, a copy of which is attached as Exhibit 2.1.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit Number
Description of Exhibit
2.1*
Purchase and Sale Agreement by and among Rosetta
Stone Ltd., Rosetta Stone Japan Inc., and SOURCENEXT
Corporation, dated April 25, 2017.
* Certain schedules and attachments referenced in the Purchase
and Sale Agreement have been omitted in accordance with Item
601(b)(2) of Regulation S-K. A copy of any omitted schedule and
attachment will be furnished supplementally to the SEC upon
request.
Forward-Looking Statements.
This communication contains forward-looking statements
concerning the proposed Sale. Potential risks and uncertainties
include, among others: (i) the inability to consummate the Sale
in a timely manner or at all, due to the inability to obtain or
delays in obtaining satisfaction of conditions to the Closing;
(ii) the occurrence of any event, change or other circumstance
that could give rise to the termination of the Purchase
Agreement; (iii) the costs, fees, expenses and charges related
to or triggered by the Sale; (iv) potential adverse effects on
the Companys business, properties or operations caused by
Rosetta Stone implementing the Sale; and (v) the initiation or
outcome of any legal proceedings or regulatory proceedings that
may be instituted against Rosetta Stone relating to the Sale.
More information about other potential factors that could
affect the Companys business and financial results is included
under the captions Risk Factors and Managements Discussion and
Analysis of Financial Condition and Results of Operations in
the Companys Annual Report on Form 10-K for the year ended
December 31, 2016, as amended, filed with the SEC and available
on the SECs website at www.sec.gov. All information set forth
in this communication is as of April 25, 2017. The Company does
not intend, and undertakes no duty, to update this information
to reflect subsequent events or circumstances.


About Rosetta Stone Inc. (NYSE:RST)

Rosetta Stone Inc. (Rosetta Stone) offers personalized language and reading programs. The Company’s solutions are used by schools, businesses, government organizations and individuals around the world. Its segments include Enterprise & Education, which derives revenues from sales to educational institutions, corporations and government agencies worldwide, and Consumer, which derives revenue from sales to individuals and retail partners. Its cloud-based programs allow users to learn online or on-the-go via tablet or smartphone, whether in a classroom, corporate setting, or personal learning environment. Its Fit Brains business offers personalized brain training programs. The Company offers courses in over 30 languages across formats, including Web-based software subscriptions, digital downloads, mobile applications, and perpetual compact disc packages. It also offers a portfolio of technology-based learning products for personal use to the global consumer.

Rosetta Stone Inc. (NYSE:RST) Recent Trading Information

Rosetta Stone Inc. (NYSE:RST) closed its last trading session down -0.29 at 11.13 with 128,070 shares trading hands.

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