NATURE OF OPERATIONS

9 Months Ended

Sep. 30, 2013

NATURE OF OPERATIONS

NATURE OF OPERATIONS

1. NATURE OF OPERATIONS

Rosetta Stone Inc. and its subsidiaries (“Rosetta Stone,” or the “Company”) develop, market and support a suite of language and reading learning solutions consisting of software products, online services and audio practice tools under the Rosetta Stone, Lexia and Livemocha brand names. The Company’s software products are sold on a direct basis and through select retailers. The Company provides its software applications to customers through the sale of packaged software and online subscriptions, domestically and in certain international markets.