|
Trading Symbols (LMD:TSX V;
LNGMF:OTC BB) |
151 Bloor St West
Suite
703
Toronto,
Ontario
Canada
M5S 1S4
Tel: +1.416.927.7000
Fax: +1.416.927.1222 |
Kenzo
Oriental Tower 11K
48
Dongzhimenwai Daijie
Dongcheng
District
Beijing
10027 China
Tel:
+011.8610.5160.0689
Fax: +011.8610.5160.0788 |
http://www.lingomedia.com/ |
PRESS RELEASE |
FOR IMMEDIATE RELEASE |
LINGO MEDIA SIGNS LETTER OF
INTENT TO ACQUIRE A+ CHILD DEVELOPMENT
Toronto,
Canada, September 19, 2006 - Lingo Media Inc. (TSX-V: LMD; OTC BB: LNGMF) (“Lingo Media”
or the "Company"), is pleased to announce that it has entered into a Letter of
Intent (“LOI”) to acquire a 70.33% controlling interest in A+ Child Development
(Canada) Ltd. (“A Plus”). A Plus, a private corporation based in Calgary, Alberta,
specializes in the field of early child cognitive development, through the publishing and
distribution of educational materials along with its unique curriculum developed by its
advisory panel of psychologists. Its market covers British Columbia, Alberta, Saskatchewan
and Ontario. A Plus had reported revenues of CAD$3.8 million in 2005.
Under the terms of
the LOI, Lingo Media has agreed to:
(i) acquire 50.33% of
the issued and outstanding shares of A Plus for the purchase price of CAD$730,000 by
paying CAD$200,000 and issuing an aggregate of 2,650,000 common shares in the capital
stock of Lingo Media at a deemed price of $0.20 per share to the selling shareholders
of A Plus on closing;
(ii) issue up to an
additional 3,000,000 common shares in the capital stock of Lingo Media as performance
shares at a deemed price of $0.20 per share to the selling shareholders and senior
management on closing to be released over a
three year period following closing, subject to
meeting certain performance milestones to be agreed upon and to a maximum of up to 1,000,000 shares per year; and
(iii) subscribe for
shares in the capital stock of A Plus for a total subscription price of CAD$260,000 to
acquire an additional 20% interest in A Plus within 90 days of the closing, the first
tranche being a minimum of CAD$100,000 on closing.
“We are excited
about the acquisition of A Plus which expands our business into the early childhood
educational sector,” said Lingo Media CEO Michael Kraft. “A Plus has developed a
unique early cognitive
development program which it distributes through its direct-to-consumer distribution
channel and represents an important new base of business for Lingo Media in Canada.”
A Plus CEO Terry
Pallier is equally optimistic by the opportunity. “This merger will allow A Plus to
expand its business in Canada and to enter new markets that include the US, China and Latin
America”, he said.
The acquisition of
the A Plus shares is an arm’s length transaction. A consulting fee to Michael
Stein & Associates Inc., of 10% of the purchase price, will be paid equally by both
parties in cash and shares of Lingo Media.
The transactions
contemplated in the LOI are subject to a number of conditions including, without
limitation, satisfactory due diligence by Lingo Media, the parties entering into
definitive agreements and regulatory approval. There is no assurance
that this transaction will be completed as proposed or at all.
About
A Plus Child Development
A Plus has been
operating in Canada for over ten years through its four offices in Calgary, Edmonton, Vancouver
and Toronto. A Plus specializes in the field of early child cognitive development, through
the publishing and distribution of educational materials along with its unique curriculum
developed by its advisory panel of psychologists. To date, over 17,000 families have used
A Plus’s programs in Canada.
About
Lingo Media
Lingo Media is a leading
publisher of English language learning programs in China. The Company incorporates print,
audio/video cassette and CD-based products for students and teachers from pre-school
through university. Founded in 1996, Lingo Media has an established presence in the
Chinese educational market of more than 200 million English language students. To
date, over 120 million units from Lingo Media's library of more than 290 program titles
have been published and sold in China. While Lingo Media remains focused on its
royalty-based educational publishing business, it is advancing its China Expansion Plan to
establish itself as a distributor of educational print media including books, newspapers
and magazines in China.
For further information,
contact:
Portions
of this press release include "forward-looking statements", which may be
understood as any statement other than a statement of historical fact.
Forward-looking statements contained in this press release are made pursuant to the safe
harbour provisions of the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectations and are subject to uncertainty
and changes in circumstances. Actual results may vary materially from management's
expectations and projections expressed in this press release. Certain factors that
can affect the Company's ability to achieve projected results are described in the
Company's Annual Report 20-F and other reports filed with the Securities and Exchange
Commission.
_____________________________________________________________________________________________________________________
The TSX Venture
Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy
of this press release.