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PRESS RELEASE
January 9, 2001
SMARTERKIDS.COM, INC. ANNOUNCES FILING OF ITS PRELIMINARY PROXY STATEMENT WITH
THE SECURITIES AND EXCHANGE COMMISSION
(NEEDHAM, MASS.): SmarterKids.com, Inc. announced today that it has filed with
the Securities and Exchange Commission (the "SEC") a preliminary proxy statement
relating to the proposed combination of SmarterKids.com and Earlychildhood LLC
(formerly Earlychildhood.com LLC). The combination agreement between
SmarterKids.com and Earlychildhood LLC was previously announced on November 15,
2000 and a report on Form 8-K with respect to the combination was filed with the
Securities and Exchange Commission on that day. Pursuant to the combination
agreement, and subject to the approval of SmarterKids.com's shareholders at a
Special Meeting of Stockholders to be held in the spring of 2001,
SmarterKids.com and Earlychildhood LLC would each become a wholly-owned
subsidiary of a newly formed holding company called LearningStar Corp.
(previously named S-E Educational Holdings, Corp.). The business of LearningStar
would be the combined businesses currently conducted by SmarterKids.com, Inc.
and Earlychildhood LLC. If the combination agreement is approved by
SmarterKids.com shareholders and certain other conditions to the combination are
satisfied, the equity holders of SmarterKids.com would receive approximately
one-third, and the holders of membership interests and options therefor in
Earlychildhood LLC would receive approximately two-thirds, of the newly issued
capital stock of LearningStar Corp. It is anticipated that LearningStar would
apply for listing on the Nasdaq National Market, and there would be created a
public market for the Common Stock of LearningStar received by shareholders of
SmarterKids.com and members of EarlyChildhood LLC pursuant to the combination.
The preliminary proxy statement which SmarterKids.com has filed with the SEC is
preliminary only and has not been reviewed by the Securities and Exchange
Commission. The preliminary proxy statement and a related Registration
Statement on Form S-4 filed by LearningStar Corp. each contain detailed
information about the terms of the proposed combination and information about
both SmarterKids.com and Earlychildhood LLC. Because Earlychildhood LLC is a
privately-held California limited liability company, information about its
financial results of operations and its financial condition and other material
aspects of its business have not previously been publicly available and may be
considered material to investors in SmarterKids.com.
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ABOUT SMARTERKIDS.COM
SmarterKids.com, Inc. (Nasdaq:SKDS), a Delaware corporation, is a leading
education store and resource dedicated to helping parents help their children
learn, discover, and grow. The site offers one of the most personalized shopping
experiences, matching a child's learning style and needs with teacher-reviewed
toys, games, books, software, music, and videos. The company features specialty
centers for special needs and gifted children, the Grade Expectations! guide to
education standards, state-specific test information and product recommendations
in the State Test Prep Center, and thousands of educational toys and services
for children ages infant through 15. SmarterKids is headquartered in Needham,
Mass. More information on the company can be found at www.smarterkids.com.
ABOUT EARLYCHILDHOOD
Earlychildhood LLC (ECC) is a fully integrated, multi channel supplier of
educational products, services and information to schools, educational
professionals and parents serving the early childhood and elementary school
communities. Founded in 1985 by Ronald Elliott, Earlychildhood manufactures,
imports and sells company-developed products as part of its diverse mix of
school supplies and educational toys, while also distributing and selling a
carefully selected range of third-party brands such as Crayola(R), Lego(R) and
Elmer's(R). Earlychildhood utilizes multiple sales, marketing and distribution
channels, including:
. catalogs issued under its tradename Discount School Supply, or DSS;
. sales programs conducted through its wholly-owned subsidiary,
Educational Products, Inc., or EPI;
. the Earlychildhood.com website; and
. EARLYCHILDHOOD NEWS, a professional content resource published in
print and online.
All of the foregoing are supported by a national sales force which, as of
December 31, 2000, numbered 93 people. ECC has over 400 employees and is
headquartered in Monterey, CA. For more information, visit ECC's website at
www.earlychildhood.com and EPI's at www.educationalproducts.com.
J.P. Morgan H&Q, a division of Chase Securities, Inc., served as financial
advisor to SmarterKids.com; Thomas Weisel Partners, LLP served as financial
advisor to Earlychildhood.com.
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 PROVIDES A "SAFE HARBOR"
FOR FORWARD-LOOKING STATEMENTS. CERTAIN INFORMATION INCLUDED IN THIS PRESS
RELEASE (AS WELL AS INFORMATION INCLUDED IN ORAL STATEMENTS OR OTHER WRITTEN
STATEMENTS MADE OR TO BE MADE BY SMARTERKIDS.COM) CONTAINS STATEMENTS THAT ARE
FORWARD-LOOKING, INCLUDING STATEMENTS RELATING TO CONSUMMATION OF THE
COMBINATION, FUTURE ANTICIPATED REVENUES OF THE COMBINED COMPANIES, COST SAVINGS
AND OTHER SYNERGIES RESULTING FORM THE COMBINATION, SUCCESS OF CURRENT PRODUCT
OFFERINGS AND OTHER MATTERS. SUCH FORWARD-LOOKING INFORMATION INVOLVES
IMPORTANT RISKS AND UNCERTAINTIES THAT COULD SIGNIFICANTLY AFFECT ANTICIPATED
RESULTS IN THE FUTURE AND, ACCORDINGLY, SUCH RESULTS MAY DIFFER MATERIALLY FROM
THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS MADE BY OR ON BEHALF OF
SMARTERKIDS.COM. FOR A DESCRIPTION OF ADDITIONAL RISKS AND UNCERTAINTIES,
PLEASE REFER TO THE SMARTERKIDS.COM FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION, INCLUDING ANNUAL AND QUARTERLY REPORTS ON FORMS 10-K AND 10-Q.
CONTACT: Pauline O'Keeffe, Director of Corporate Communications of
SmarterKids.com, Inc., (781) 292-3048.
