Learning Corp. ("SCIL") announced today that it has executed binding
purchase agreements for the sale of 2,864,000 shares of its common stock
at a price of $0.625 per share, nearly a 23 percent premium over the
past 12 months' weighted average price, for aggregate proceeds of
$1,790,000 (the "Financing"). Investors in the round include a majority
of the members of SCIL's Board of Directors; members of SCIL's
management team; Rick Lee, founder and CEO of BrainMaps, China; SCIL
international partners; and SCIL's largest shareholder. Proceeds from
the Financing are expected to be used for expenses associated with
SCIL's previously announced plans to purchase BrainMaps and raise
additional capital to accelerate the rapid expansion of BrainMaps
English language learning centers.
On Dec. 1, 2017 SCIL
announced that it had signed a non-binding Letter of Intent (LOI)
with BrainMaps to acquire the Shanghai-based blended learning company,
which currently has more than 70 franchised English language learning
centers across China. BrainMaps combines SCIL's patented online
neuroscience-based language learning technologies with BrainMaps offline
methodology to enable Chinese students to achieve fluency in English in
as little as three years. Rick Lee of BrainMaps commented, "Combining
Scientific Learning's online programs with BrainMaps' classroom
activities and performance opportunities gives students an edge in
gaining English skills fast - and in a highly motivating and enduring
The proposed acquisition of BrainMaps is contingent upon finalization of
definitive transaction agreements, completion of financing transactions
to obtain the capital required to acquire and expand BrainMaps, and
board of director and shareholder approval, among other conditions. SCIL
has engaged Tyton
Partners, the leading provider of investment banking and strategy
consulting services to the global knowledge sector, as its exclusive
investment banking advisor to assist with the transaction.
"This current round of financing will cover transaction costs, allowing
more of the future capital raise to be used for the rapid expansion of
BrainMaps in China, the country with the largest English language
learning market in the world," said Robert Bowen, CEO and chairman of
the board of SCIL. "Participants in this round understand the potential
for growth that the combination of Scientific Learning's
neuroscience-based learning innovations and BrainMaps' operational
excellence can achieve."
The Financing is conditioned upon SCIL obtaining any requisite state
securities law permits and other standard conditions. SCIL expects to
close the Financing and obtain the funds before the end of January 2018.
About Scientific Learning Corp.
Based in Oakland, Calif., Scientific Learning is a leading SaaS (News - Alert) service
provider that delivers neuroscience-based educational technologies.
Scientific Learning's programs, Fast ForWord® and Reading Assistant™,
have been used by more than 2.8 million learners in more than 2,600 K-12
schools in the United States, by over 500 private practice clinicians,
by thousands of students via a direct-to-consumer channel, and in over
55 countries via value-added resellers (VAR). The Fast ForWord programs
cross-train foundational language and cognitive skills necessary for
rapid English language development, while Reading Assistant uses speech
verification technology to provide real-time corrective feedback to
students as they read and speak, in a manner similar to that of an
individualized language and reading coach.
BrainMaps, a VAR partner of Scientific Learning's for over 10 years, was
founded by Rick Lee and Tiffany Koo, who are using their past experience
as national directors for companies such as Wall
Street English and Gymboree to
rapidly expand the BrainMaps model across China. Based on its compelling
student outcomes and rapid growth, BrainMaps was named a top 10
franchise in China by Entrepreneur magazine in 2016.
Safe Harbor Statement: The information posted in this release
contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. You can identify these
statements by use of the words "may," "will," "should," "plans,"
"explores," "expects," "anticipates," "continue," "estimate," "project,"
"intend," and similar expressions. The forward-looking statements in
this release include statements regarding the closing of the announced
Financing; and SCIL's proposed acquisition of BrainMaps. Forward-looking
statements involve risks and uncertainties that could cause actual
results to differ materially from those projected or anticipated.
Factors which could cause results or events to differ from current
expectations include, among other things: the inability to obtain
necessary state securities law permits for the Financing; the inability
complete a subsequent financing transaction sufficient to complete the
acquisition of BrainMaps or at all; the inability to secure approval of
the acquisition from SCIL's board of directors or its shareholders for
the BrainMaps acquisition; general economic and business conditions;
effects of potential geopolitical unrest and regional conflicts;
competition; and various other factors beyond SCIL's control. Although
SCIL believes that the expectations reflected in such forward-looking
statements are reasonable, it can provide no assurance that such
expectations will prove to have been correct. Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak
only as of the date made. Except as required by law, SCIL assumes no
obligation to update or revise any forward-looking statements.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180112005395/en/
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