CARNEGIE LEARNING Secures $14 Million Second Round of Funding.

Business Editors, High Tech and Education Writers

PITTSBURGH--(BUSINESS WIRE)--Oct. 17, 2001

Results-based educational technology company prepares

for profitable future, licenses proprietary middle school

math curriculum from Carnegie Mellon University 

Carnegie Learning, Inc., the only company to develop a proven, integrated print and technology curriculum that increases math and writing test scores by uniting students, teachers and Cognitive Tutor(R) software, announced today a $14 million round of financing.

Several investors, including Carnegie Mellon University, Collier Investments, Ltd. and Draper Triangle Ventures, are providing funding to the Company.

In addition, Carnegie Learning has secured a license from Carnegie Mellon University to exclusively market the Cognitive Tutor middle school math products currently being piloted in classrooms. The addition of the middle school courses will double Carnegie Learning's product line and help schools reach students early in their learning experience, providing a cohesive program of cognitive science-based learning for grades 6-12. In order to better position itself for sustained growth, the Company has restructured its sales force and operations.

"We are pleased to continue our support of Carnegie Learning," said Jay Katarincic, managing partner of investment firm Draper Triangle. "Carnegie Learning offers an exceptional value proposition to schools, families and students, and is, therefore, an investment we feel confident making, particularly in a conservative economy. Furthermore, we're impressed with the company's commitment to reaching profitability."

Robert Longo has chosen to resign as President and CEO of the Company to join Emerald Partners of Boston. Mr. Longo will continue to consult with the Company during the transition period.

"The board will conduct a national search, with the goal of naming a new Chief Executive in the next three to six months," said Mark Kamlet, Chairman of the Company and the Provost of Carnegie Mellon University. William Hadley, Carnegie Learning's Chief Academic Officer, has been named the Company's Interim President. "We are extremely confident that during that period Bill will serve Carnegie Learning well in its new strategic direction," Kamlet said.

"Carnegie Learning continues to gain momentum in the education market. In our first three years it was important for us to prove the value of our products and acquire market share momentum," said Hadley. "We are keeping our focus on the short road to profitability and on serving our substantial customer base."

Carnegie Learning Delivers Results

Established in 1998 as a spin-off from Carnegie Mellon University, Carnegie Learning's results-based curricula have been adopted in more than 37 states, including a statewide license in Alaska and a major penetration of more than 125 sites in Pennsylvania and more than 50 sites each in Texas, California, New York, and Ohio. Carnegie Learning's technology-based curricula have been equally successful in urban and rural communities, as well as public and private schools because the curricula's advanced software interactively adapts to the individual needs of each student.

Commenting on delivering the middle school math product, Ken Koedinger, Associate Professor of the Human-Computer Interaction Institute at Carnegie Mellon University said, "I am very excited about what we have achieved in our middle school research and development. With each new course, we continue to learn more about how students learn. The result is an extended line of improved products for students and teachers."

Just last week, Carnegie Learning was awarded "Rising Star" status by the Pittsburgh Technology Council, and was also recently featured at the National Education Summit in Palisades, N.Y., as one of the best results-based curricula in the country.

About Carnegie Learning

Carnegie Learning, Inc., a Pittsburgh-based educational technology company, develops and markets Cognitive Tutor curricula, the only technology-enhanced curricula to enable "Learning by Doing(TM)" through real-world problem solving. The Cognitive Tutors are being used in 35 of the 100 largest school districts in the country, including, New York City, Chicago, Miami-Dade, Dallas, Houston, Denver, San Francisco, Pittsburgh and San Diego. Unlike supplemental educational software, Carnegie Learning's Cognitive Tutor courses are the first comprehensive curricula for algebra, geometry and writing that join students, teachers, technology, and text into results-based programs built around cognitive learning models that enable personalized learning paths. In addition, the highly sophisticated intelligent tutoring system enables students to use multiple problem solving strategies and provides several levels of "just in time" instruction to assist in achieving successful results. The company's first products, Cognitive Tutor Algebra I, Geometry, and Algebra II, are supported by research that began in 1983, and are appropriate for students in middle school through four-year colleges. For more information, visit Carnegie Learning at www.carnegielearning.com.