lingo_6k-063010.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________

FORM 6-K
________

REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 under
the Securities Exchange Act of 1934
 
For the month of June 30, 2010
 
Commission File Number 333-98397
 
Lingo Media Corporation
(Translation of registrant's name into English)
 
151 Bloor Street West, Suite 703, Toronto, Ontario Canada M5S 1S4
(Address of principal executive offices)
 
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F x Form 40-F o
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o
 
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o
 
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
 
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes o No x
 
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-________________.
 
 
 
 
 
 
  Interim Consolidated Financial Statements
  (Expressed in Canadian dollars)
   
  LINGO MEDIA CORPORATION
  June 30, 2010 and 2009
  (Unaudited – See Notice to Reader)
 
 
The Interim Consolidated Balance Sheet of Lingo Media Corporation as at June 30, 2010 and the Interim Consolidated Statements of Operations, Deficit and Cash Flows for the six months then ended have not been reviewed by the Company’s auditors. These financial statements are the responsibility of the management and have been reviewed and approved by the Company’s Audit Committee.
 
 
 
 
 

LINGO MEDIA CORPORATION
Interim Consolidated Financial Statements
(Expressed in Canadian dollars)
June 30, 2010 and 2009
(Unaudited – See Notice to Reader)
 
Notice to Reader

Management has compiled the Interim Consolidated Financial Statements of Lingo Media Corporation (“Lingo Media” or the “Company”) consisting of the Interim Consolidated Balance Sheet as at June 30, 2010 and the Interim Consolidated Statements of Deficit, Operations, and Cash Flows for the six months then ended.  All amounts are stated in Canadian dollars. An accounting firm has not reviewed or audited these interim financial statements and management discussion and analysis thereon.
 
 
 
 
 
LINGO MEDIA CORPORATION
Interim Consolidated Financial Statements
(Expressed in Canadian dollars)
June 30, 2010 and 2009
(Unaudited – See Notice to Reader)
 
CONTENTS Page
   
Interim Consolidated Financial Statements:  
   
Balance Sheets   4
   
Statement of Deficit 5
   
Statement of Operations      6
   
Statement of Cash Flows   7
   
Notes to Financial Statements 8
 
 
 
 
 
LINGO MEDIA CORPORATION
Interim Consolidated Balance Sheets
(Expressed in Canadian dollars)
June 30, 2010 and 2009
(Unaudited – See Notice to Reader)

   
June 30, 2010
    
December 31, 2009
  
 
Assets
            
 
Current assets:
            
Cash
   $ 59,319     $ 201,451  
Accounts and grants receivable (note 3)
     510,131       569,571  
Prepaid and sundry assets
     187,937       76,954  
      757,387       847,976  
                 
Property and equipment, net
     67,796       73,351  
Publishing development costs, net
     8,807       24,018  
Software & web development costs, net (note 4)
     5,548,459       4,757,807  
    $ 6,382,449     $ 5,703,152  
                 
Liabilities and Shareholders' Equity
 
Current liabilities:
                
Accounts payable
   $ 756,802     $ 313,915  
Accrued liabilities
     467,878       393,665  
Deferred revenue
     3,881       15,533  
      1,228,561       723,113  
 
 
Loan payable (note 5)
Future income taxes
    
   675,000
564,997
      
  -
564,997
  
      2,468,558       1,288,110  
                 
Convertible Debt
     765,000       -  
 
Shareholders' equity:
                
Capital stock (note 7)
     15,032,446       14,220,192  
Warrants (note 7)
     120,103       281,355  
Contributed surplus (note 7)
     1,378,096       1,290,631  
Deficit
     (13,381,754 )     (11,377,136 )
      3,913,891       4,415,042  
                 
    $ 6,382,449     $ 5,703,152  
 
Basis of Presentation (note 2)
 
See accompanying Notes to Interim Consolidated Financial Statements.
 
Approved on behalf of the Board:
 
“signed” Michael Kraft Director
   
“signed” Sanjay Joshi Director
 
 
 
 

LINGO MEDIA CORPORATION
Interim Consolidated Statements of Deficit
(Expressed in Canadian dollars)
For Six Months Ended June 30, 2010 and 2009
(Unaudited – See Notice to Reader)

   
Three Months Ended
    
Six Months Ended
  
 
  
June 30, 2010
    
June 30, 2009
    
June 30, 2010
    
June 30, 2009
  
Deficit, beginning of period
   $ (12,457,713 )   $ (8,889,311 )   $ (11,377,138 )   $ (8,785,284 )
Net loss for the period
     (924,041 )     (691,389 )     (2,004,616 )     (795,416 )
Deficit, end of period
     (13,381,754 )     (9,580,700 )     (13,381,754 )     (9, 580,700 )
 
See accompanying Notes to Interim Consolidated Financial Statements.
 
 
 
 
 
LINGO MEDIA CORPORATION
Interim Consolidated Statements of Operations
(Expressed in Canadian dollars)
For Six Months Ended June 30, 2010 and 2009
(Unaudited – See Notice to Reader)

   
Three Months Ended
    
Six Months Ended
  
   
June 30, 2010
    
June 30,2009
    
June 30, 2010
    
June 30, 2009
  
Revenue
   $ 559,437       654,358     $ 694,732     $ 709,678  
Direct costs
     57,666       80,638       67,299       80,638  
Margin
     501,771       573,720       627,433       629,040  
 
Expenses:
                                
General and administrative
     730,716       639,982       1,259,597       1,074,673  
Amortization of property and equipment
     1,974       22,929       3,690       26,169  
Amortization of software and web development cost
     573,130       468,862       1,177,798       468,862  
Amortization of development cost
     1,521       -       18,266       22,229  
Interest and other financial expenses
     15,437       (349 )     17,821       313  
Stock-based compensation
     44,319       46,868       87,465       93,735  
      1,367,097       1,178,293       2,564,637       1,685,982  
                                 
Loss before the following:
     (865,326 )     (604,573 )     (1,937,204 )     (1,056,942 )
                                 
Income taxes and other taxes
     58,715       86,816       67,412       89,582  
Loss from continuing operations:
     (924,041 )     (691,389 )     (2,004,616 )     (1,146,524 )
                                 
Gain (Loss) from discontinued operation (Note 8)
     -       -       -       351,109  
                                 
Net loss for the period
   $ (924,041 )     (691,389 )   $ (2,004,616 )   $ (795,416 )
                                 
Loss per share from continued operation
   $ (0.07 )     (0.06 )   $ (0.16 )   $ (0.09 )
Earnings per share from discontinued operation
     -       -       -       0.03  
                                 
                                 
Weighted average number of
                                
common shares outstanding
     13,004,319       12,457,607       12,736,575       12,457,607  
 
See accompanying Notes to Interim Consolidated Financial Statements.
 
 
 
 
 
LINGO MEDIA CORPORATION
Interim Consolidated Statements of Cash Flow
(Expressed in Canadian dollars)
For Six Months Ended, June 30, 2010 and 2009
(Unaudited – See Notice to Reader)
 
   
Three Months Ended
    
Six Months Ended
  
    June 30, 2010    
June 30, 2009
    
June 30, 2010
     June 30, 2009  
Cash flows provided by (used in):
                        
Operations:
                        
Net loss from continuing operations for the period
   $ (924,041)     $ (691,389)     $ (2,004,616)     $
(1,146,524)
  
Items not affecting cash:
                                
Amortization of property and    equipment
     1,974       22,929       3,690       26,169  
Amortization of development costs
     1,521       -       18,266       22,229  
Amortization of software and web development costs
     573,130       468,862       1,177,798       468,862  
Stock-based compensation
     44,319       46,868       87,465       93,735  
  Change in non-cash balances related to operations:
                                
Accounts and grants receivable
     14,523       60,363       59,440       (3,441 )
Prepaid and sundry assets
     (33,851 )     40,726       (110,983 )     (9,546 )
Accounts payable
     251,895       167,955       442,888       24,388  
Accrued liabilities
     30,959       (5,630 )     74,214       (75,543 )
Deferred revenue
     (54,236 )     25,243       (11,652 )     135,883  
Cash provided by (used in) operating activities
     (93,807 )      135,926       (263,490 )      (463,789 ) 
                                 
Cash provided by (used in) discontinued operation
     -       -       -       (97,171 ) 
 
Financing:
                        
Advances/loan payable
     325,000       -       675,000       -  
Cash provided by financing activities
     325,000       -       675,000       -  
                                 
Investing:
                                
Expenditures on software & web development costs
     (396,103 )     (284,414 )     (505,679 )     (566,288 )
Deferred cost
     (46,714 )     -       (48,248 )     -  
Purchase of property and equipment
     -       (23,818 )     105       (38,276 )
Development costs
     -       21,769       -       21,769  
Cash used in investing activities
     (442,817 )     (286,463 )     (553,822 )     (582,795 )
                                 
Decrease in cash
     (211,624 )     (150,537 )     (142,312 )     (1,143,754 )
Cash, beginning of period
     270,943       1,286,720       201,451       2,279,937  
Cash, end of period
   $ 59,319     $ 1,136,183     $ 59,319     $ 1,136,183  

See accompanying Notes to Interim Consolidated Financial Statements.

 
 
 
 
LINGO MEDIA CORPORATION
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian dollars)
June 30, 2010 and 2009
(Unaudited – See Notice to Reader)
 
1. 
Nature of Operations:
 
Lingo Media Corporation (“Lingo Media” or the “Company”) is a diversified online and print education product and services company focused on English language learning ("ELL") on an international scale through its business units. ELL Technologies Limited (“ELL Technologies”) is a globally-established ELL multi-media and online training company marketed under the Q Group brand.  Parlo Corporation (“Parlo”), is a fee-based online ELL training and assessment service.  Speak2Me Inc. (“Speak2Me”), is a free-to-consumer advertising-based online ELL service in China.  Lingo Learning Inc. (formerly Lingo Media Ltd.), is a print-based publisher of ELL programs in China.  Lingo Media through its subsidiary A+ Child Development (Canada) Ltd. (“A+”), until filing for a proposal to creditors (note 7) specialized in distributing early childhood cognitive development programs.

2. 
Significant accounting policies:
 
Basis of presentation and going concern:
 
The disclosures contained in these interim consolidated financial statements do not include all the requirements of Canadian generally accepted accounting principles (GAAP) for annual financial statements. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2009.
 
These interim consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”) on a going concern basis, which presumes that the Company will be able to realize its assets and discharge its liabilities under normal course of business in the foreseeable future.  These financial statements do not include any adjustments to the carrying values and classification of assets and liabilities and reported revenues and expenses that may be necessary should the Company’s financial condition continues to deteriorate and is unable to mitigate it.
 
The Company has incurred significant losses over the years and has an accumulated deficit as at June 30, 2010.  This raises significant doubt about the Company’s ability to continue as a going concern.  The ability of the Company to continue as a going concern is dependent upon raising additional financing through share issuance, borrowing, sales and distribution agreements.  There are no assurances that the Company will be successful in achieving these goals.

3. 
Accounts and grants receivable:
 
Accounts and grants receivable consist of:
   
June 30, 2010
    
December 31, 2009
  
Trade receivable
   $
510,131
     $
569,571
  
Grants receivable
     -       -  
    $ 510,131     $ 569,571  
 
 
 
 
 
LINGO MEDIA CORPORATION
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian dollars)
June 30, 2010 and 2009
(Unaudited – See Notice to Reader)
 
4. 
Software and web development costs:
 
In October 2007, the Company acquired Speak2Me, a free-to-consumer advertising-based online ELL service that has developed software combining speech recognition and animation technology for the teaching and practice of spoken English.  On May 13, the Company acquired ELL Technologies, an ELL multi-media and online training company.  Since then, the Company has been developing and advancing these technologies and capitalizing them as software and web development costs.
 
   
June 30, 2010
    
December 31, 2009
  
Cost
   $ 8,121,993     $ 6,153,543  
Less: Accumulated amortization
     (2,573,534 )     (1,395,736 )
    $ 5,548,459     $ 4,757,807  
 
The Company began commercial production and sale of the Speak2Me product during 2009 and has started amortizing the cost of software and web development costs on a straight-line basis over the useful life of the assets which is estimated to be 3 years.  Software and web development costs related to ELL Technologies are amortized on a straight-line basis over 3 the useful life of the assets which is estimated to be 3 years
 
5. 
Loan payable:
 
The loan payable of $675,000 is interest bearing at 9% per annum payable monthly, is unsecured and is due on August 27, 2011. 
 
6. 
Convertible debt:
 
On May 13, 2010, the Company acquired all issued and outstanding shares of ELL Technologies Limited (the "Acquisition").  In addition to the treasury shares issued as part of the acquisition, the Company also agreed to pay $765,000 to be paid 12 months after the closing date or earlier, in cash and/or Lingo Media treasury shares at the Company’s sole discretion.
 
7. 
Capital stock and stock options:
 
 
(a)
Authorized:
 
Unlimited preference shares, no par value
 
Unlimited common shares, no par value
 
 
 
 

LINGO MEDIA CORPORATION
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian dollars)
June 30, 2010 and 2009
(Unaudited – See Notice to Reader)
 
7.
Capital stock and stock options (continued):
 
The following details the changes in issued and outstanding common shares:

   
Common Shares
  
   
Number
    
Amount
  
Balance, January 1, 2009
     12,457,607     $ 14,205,515  
Issued:
                
Options exercised
     8,250       14,677  
Balance, December 31, 2009 & March 31, 2010
     12,465,857     $ 14,220,192  
Issued:
                
Acquisition of ELL Technologies
     1,050,000       651,000  
Balance, June 30, 2010
     13,515,857     $ 14,871,192  
                 
 
  (b)   Warrants:
   
Warrants
  
   
Number
    
Amount
    
Weighted Avg. Price
    
Weighted Avg. Life
  
Balance, January 1, 2010
     2,142,858     $ 281,355       6.00       0.5  
Less:
                                
 Expired warrants
     (171,428 )     (91,028 )   $ 2.00       1.0  
Balance, December 31, 2009 & June 30, 2010
     2,142,858     $ 281,355     $ 6.00       0.2  

All outstanding warrants are exercisable as of June 30, 2010.
 
(c)   Contributed Surplus:
Balance, January 1, 2009
   $ 847,768  
Stock-based compensation     359,004  
Options exercised
     (7,169 )
Warrants expired
     91,028  
Balance, December 31, 2009
     1,290,631  
Stock-based compensation
     87,465  
Balance, June 30, 2010
   $ 1,378,096  
 
 (d)   Stock options:
   
June 30, 2010
    
December 31, 2009
  
   
Number of shares
    
Weighted average exercise price
    
Number of
 shares
    
Weighted average exercise price
  
                         
Options outstanding, beginning of year
     914,106       1.30       633,120     $ 1.04  
Options granted
     100,000       1.75       597,250       1.75  
Options exercised
     -       -       (8,250 )     0.91  
Options expired
     (52,143 )     1.41       (202,179 )     1.62  
Options forfeited
     -       -       (105,835 )     1.75  
                                 
Outstanding, end of period
     961,963       1.34       914,106       1.30  
Options exercisable, end of period
     651,671     $ 1.12       657,606     $ 1.12  
 
 
 
 
 
LINGO MEDIA CORPORATION
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian dollars)
June 30, 2010 and 2009
(Unaudited – See Notice to Reader)
 
7.
Capital stock and stock options (continued):
 
The following table summarizes information about stock options outstanding at June 30, 2010:
 
         
Options outstanding
    
Options exercisable
  
 
Range of
exercise
prices
  
 
Number
outstanding
    
Weighted
average remaining contractual life
    
Weighted
average
exercise
price
    
 
Number
outstanding
    
Weighted
 average
 exercise
 price
  
                               
$0.70 - $1.00
     333,999       1.90     $ 0.72       333,999     $ 0.72  
$1.01 - $1.33
     105,714       1.90       1.22       105,714       1.22  
$1.34 - $2.00
     522,250       3.72       1.75       211,958       1.75  
Total
     961,963       3.12       1.34       651,671       1.12  
 
8. 
Discontinued operations
 
On December 23, 2008, A+, the Company’s 70.33% owned subsidiary, filed a Proposal.  The Company wrote-down the carrying value of its 70.33% investment in A+, resulting in a charge of $Nil (2008 - $1,571,369, 2007 - $292,848) to earnings for the first three months, included in the write-down was $Nil in future income tax assets related to its A+ subsidiary.
 
On March 23, 2009, the Proposal was approved by the creditors of A+.  The Company wrote-down the carrying value of its trade payables to the amount of the Proposal, resulting in a one time gain of $367,293 to discontinued operations.
 
All comparative figures have been adjusted to exclude results from discontinued operations.
 
The net assets of A+ were presented as assets and liabilities of the discontinued operations at their carrying value. The following table shows the major categories of assets and liabilities of the discontinued operations.
 
The statement of loss for the three months period ended June 30 from discontinued operations is as follows:
   
2010
    
2009
  
             
Operating revenue
   $ -     $ -  
Expenses
     -       1,322  
Write-down of trade payables
     -       368,615  
Net gain / (loss) from discontinued operation
   $ -     $ 367,293  
 
 
 
 

LINGO MEDIA CORPORATION
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian dollars)
June 30, 2010 and 2009
(Unaudited – See Notice to Reader)
 
9. 
Financial instruments and risk management:
 
The Company as part of its operations carries a number of financial instruments.  It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments except as otherwise disclosed.
 
 
(a)
Currency risk:
The Company is subject to currency risk through its activities outside of Canada.  Unfavourable changes in the exchange rate may affect the operating results of the Company.  The Company is also exposed to currency risk as a substantial amount of its revenue is denominated in United States Dollars (“USD”), Chinese Renminbi ("RMB") and New Taiwanese Dollars (“NTW”).
 
There were no derivative instruments outstanding at June 30, 2010 and 2009.
 
 
(b)
Financial instruments:
 
The significant financial instruments of the Company, their carrying values and the exposure to USD denominated monetary assets and liabilities, as of June 30, 2010 are as follows:
 
   
USD Denominated
    
China Denominated
    
Taiwan Denominated
  
   
CAD
    
USD
    
CAD
    
RMB
    
CAD
    
NTW
  
Cash
     42,584       40,151       9,314       62,598       11,184       349,613  
Accounts receivable
     45,240       42,824       464,711       3,123,044       -       -  
Accounts payable
     14,124       13,317       -       -       -       -  
 
USD, RMB and NTW are converted on the prevailing period-end exchange rates.
 
 
(c)
Fair market values:
 
The carrying values of cash and cash equivalent, accounts and grant receivable, accounts payable, accrued liabilities, and loans payable approximate their fair values due to the relatively short periods to maturity.
 
 
(d)
Concentration of risk:
 
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable.  Cash and short-term investment consist of deposits with major financial institutions.  With respect to accounts receivable, the Company performs periodic credit evaluations of the financial condition of its customers and typically does not require collateral from them.  Management assesses the need for allowances for potential credit losses by considering the credit risk of specific customers, historical trends and other information.
 
 
(e)
Interest rate risk:
 
The Company manages its exposure to interest rate risk through floating rate borrowings. The floating rate debt is subject to interest rate cash flow risk, as the required cash flows to service the debt will fluctuate as a result of changes in market rates.  

 
 
 
 
LINGO MEDIA CORPORATION
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian dollars)
June 30, 2010 and 2009
(Unaudited – See Notice to Reader)
 
10. 
Segmented information:
 
The Company operates two distinct reportable business segments as follows.
 
Online English Language Learning: The Company offers a groundbreaking online service using robust speech recognition technology acquired through its acquisition of Speak2Me in October 2007.  Parlo is a fee-based online ELL training and assessment service.  ELL Technologies is a globally-established ELL multi-media and online training company marketed under the Q Group brand.
 
Print-based English Language Learning: The Company develops, publishes, distributes and licenses book, audio/video cassette, CD-based product and supplemental product for English language learning for the educational school markets in China.
 
For Six Months Ended June 30, 2010
   
Online English Language Learning
    
Print-based English
Language Learning
    
Total
  
Revenue
   $ 204,494     $ 490,238     $ 694,732  
Cost of sales
     30,172       37,127       67,299  
Margin
     174,322       453,111       627,433  
Acquisition of property and equipment
     -       -       -  
Segment assets
     5,004,663       1,377,786       6,382,449  
Segment loss
   $ 1,410,659     $ 593,957     $ 2,004,616  

For Six Months Ended June 30, 2009
   
Online English Language Learning
    
Print-based English
Language Learning
    
Total
  
Revenue
   $ 165,960     $ 543,718     $ 709,678  
Cost of sales
     11,314       69,324       80,638  
Margin
     154,646       474,394       629,040  
Acquisition of property and equipment
     -       38,276       38,276  
Segment assets
     5,932,107       1,498,130       7,430,237  
Segment loss
   $ 981,549     $ 164,975     $ 1,146,524  
 
The Company's revenue by geographic region based on the region in which the customers are located is as follows:
 
   
June 30, 2010
    
June 30, 2009
  
China   $
633,653
     $
709,678
  
Other
    
61,079
      
-
  
    $ 694,732     $ 709,678  

 
 
 
 
LINGO MEDIA CORPORATION
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian dollars)
June 30, 2010 and 2009
(Unaudited – See Notice to Reader)
 
10. 
Segmented information (continued):
 
The majority of the Company’s identifiable assets as at June 30, 2010 are located as follows:
   
June 30, 2010
    
June 30, 2009
  
Canada
   $ 6,357,176     $ 7,053,075  
China
     25,273       377,162  
    $ 6,382,449     $ 7,430,237  
 
11.
Reconciliation of Canadian and United States generally accepted accounting principles:
 
These interim consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles. Except as set out below, these financial statements also comply, in all material aspects, with the United States generally accepted accounting principles.
 
The following tables reconcile results as reported under Canadian GAAP with those that would have been reported under United States GAAP.
 
Statements of Operations:
   
June 30, 2010
    
June 30, 2009
  
Loss for the period - Canadian GAAP
   $ (2,004,616 )   $ (795,416 )
Impact of United States GAAP and adjustments:
                
Amortization
     1,196,064       22,299  
Software and web development costs
     (505,679 )     197,331  
Loss for the period - United States GAAP
   $ (1,314,231 )   $ (575,856 )
 
Statement of Cash Flows:
 
June 30,
  
2010
    
2009
  
Cash used in operating activities
            
- Canadian GAAP
   $ (263,490 )         $ (463,789 )
Impact of United States GAAP:
                
Write-off of software & web development cost
     (505,679 )     197,331  
    $ (769,169 )     (266,458 ) 
Cash (used in) provided by investing activities
                
- Canadian GAAP
   $ (553,822 )   $ (582,795 )
Impact of United States GAAP and adjustments:
                
Write-off of software & web development cost
     505,679       (197,331 )
Cash (used in) provided by investing activities
                
- United States GAAP
   $ (48,143 )   $ (780,126 )
 
 
 
 
 
LINGO MEDIA CORPORATION
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian dollars)
June 30, 2010 and 2009
(Unaudited – See Notice to Reader)
 
11.
Reconciliation of Canadian and United States generally accepted accounting principles:
 
(continued):
 
The cumulative effect of these adjustments on the consolidated shareholders' equity of the Company is as follows
   
June 30, 2010
    
December 31, 2009
  
Shareholders' equity - Canadian GAAP
   $ 3,148,892     $ 4,415,043  
Development costs
     (8,807 )     (24,018 )
Software & web development costs
     (5,548,459 )     (4,757,807 )
Shareholders' equity/(deficiency)  - United States GAAP
   $ (2,408,374 )   $ (366,782 )
 
12. 
Comparative figures:
 
Certain comparative figures have been reclassified to conform with the financial statement presentation adopted in the current period.
 
13. 
Subsequent events:
 
Subsequent the quarter end, the Company raised an additional $325,000 of unsecured loans payable bearing interest at 9% per annum payable monthly and due 12 months from the advance date.
 
 
 
 
 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934 the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunder duly authorized.
 
 
LINGO MEDIA CORPORATION
  
       
Date: August 30, 2010
By:
/s/ Michael Kraft
  
   
Michael Kraft
President and CEO