Carnegie Learning Acquires Scientific Learning Corporation to Strengthen Its Digital Literacy Offerings

Transaction Valued at Approximately $15 Million

Scientific Learning Corporation, the leader in evidence-based online reading and language software, announced that it has been acquired by an affiliate of Carnegie Learning, Inc. , a leader in artificial intelligence for education and formative assessment, in an all-cash merger transaction valued at approximately $15 million. The combination will strengthen the education technology portfolio of both entities to further drive forward their joint mission of improving student learning outcomes through leading-edge technology built from and validated by rigorous research.

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Under the terms of the agreement, Carnegie Learning acquired all of the outstanding shares of Scientific Learning common stock for a cash payment of $0.53 per share. After applying a portion of the transaction value to items noted below, the estimated total per share consideration to be received by Scientific Learning’s securityholders is approximately $0.25, which comprises a closing merger consideration of approximately $0.16 per share and an estimated additional merger consideration of approximately $0.09 per share, on a fully diluted basis. The transaction was unanimously approved by Scientific Learning’s Board of Directors, by a majority of Scientific Learning’s stockholders via written consent, and by the Board of Directors of Carnegie Learning. Scientific Learning is now a privately-owned subsidiary of Carnegie Learning and will no longer be listed on the OTC Markets.

Jeff Thomas, CEO of Scientific Learning, stated, “Through our combination with Carnegie Learning, we are pleased to deliver value to our shareholders while aligning our company with a highly complementary organization that approaches cutting-edge research and technology solutions for K-12 students with a like-minded mission-driven approach. By leveraging Carnegie Learning’s innovative technology platform, Scientific Learning will have an enhanced ability to accelerate its product development and further expand its mission of helping learners realize their full potential.”

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Carnegie Learning’s award-winning adaptive personalized learning software, blended learning solutions, and professional learning services have long supported teachers and students nationwide. In today’s challenging environment, Carnegie Learning’s blended offerings are proving highly effective, particularly as schools continue to operate in a hybrid and remote learning environment. Scientific Learning’s offerings complement Carnegie Learning’s portfolio of research-based offerings that offer educators leading edge instructional software and advanced data-driven insights.

Barry Malkin, CEO of Carnegie Learning, added, “Now more than ever, students need access to adaptive personalized learning offerings. Scientific Learning’s product portfolio and long history of delivering neuroscience-based ed-tech solutions directly to students around the world supports Carnegie Learning’s mission to promote student success. We are excited to partner with the Scientific Learning team and, together, continue to redefine and advance the role of technology in K-12 education.”

A portion of the transaction value was applied to fund Scientific Learning’s approximately $7.0 million in subordinated debt, other debt and certain selling and transaction-related expenses. Another portion of the transaction value has been placed in escrow to be released upon satisfaction of certain conditions and following a customary working capital adjustment period in accordance with the t******************* of the agreement.

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