Lingo Media Due Diligence Report Ticker Symbols: LM.V & LMDCF Price: $0.075 Common Shares: 35.53 Million Market Cap: $2.66 Million Insider Holdings: 20.17% Most recent company presentation: https://lingomedia.com/wp-content/u...Corporate-Presentation-April-2020-Final11.pdf Lingo Media is a global EdTech company that is ‘Building a multilingual world’, developing and marketing products for learners of new languages through various life stages, from classroom to boardroom. By integrating education and technology, the company empowers language educators to easily transition from traditional teaching methods to digital learning. The Company provides both online and print-based solutions through two distinct business units: ELL Technologies Ltd. Everybody Loves Languages and Lingo Learning. Everybody Loves Languages provides online training and assessment for language learning, while Lingo Learning is a print-based publisher of English language learning programs in China. Through its two distinct business units, Lingo Media develops, markets, and supports a suite of language learning solutions consisting of web-based software licensing subscriptions, online and professional services, audio practice tools and multi-platform applications. The Company continues to operate its textbook publishing business from which it collects recurring royalty revenues. Most recent financial results (Ending June 30th 2021) ASSETS Cash: $1,292,042 - $0.037c a share in cash Accounts & Grants Receivable: $1,188,781 Prepaid & Other Receivables: $108,184 Property & Equipment: $19,156 Total Assets: $2,607,163 LIABILITIES Accounts Payable: $101,839 Accrued Liabilities: $111,112 Contract Liability: $262,072 Loans Payable: $80,000 Total Liabilities: $555,023 Company Performance From 2019 to 2021 Year----Revenue----Profit----Assets----Liabilities-----EPS 2019--- $1,956,222----$113,817----$1,951,990----$1,185,714-----0.003 2020--- $2,102,054----$1,077,609----$2,396,035----$529,006----0.030 2021(Q1-Q2)----$1,179,598----$183,331----$2,607,163----$555,023----0.005 Notes: - Company market cap has stayed in the same range for the last 20 months, despite adding almost $0.04c in value - G&A in 2019 was 11 times what it was in 2020 - Q1 is historically weak for Lingo Media. From the last MD&A: Revenue for the first quarter ended March 31, 2021, totalled $149,080 as compared with $97,013 in Q1 2020. MD&A Highlights from Last Quarter Q2 2021 Operational Highlights • Online English Language Learning: - Launched Ola App, allowing students to access hundreds of additional hours of speaking and pronunciation practice with their smartphones with Speak2Me and Studio features. - Redesigned and refreshed product design for English, Portuguese, Spanish, French, Mandarin, and Business. - Added Assessment Test security features including: o browser locking, full screen lock, one login per device, and student declaration and selfie picture to verify identity. - ELL Technologies rebranded as Everybody Loves Languages, including redesign of logo, website, and platform. - Conducted three webinars as part of ELL teacher development series • Print-Based English Language Learning: - expanded existing market for PEP Primary English program into one additional province in China Summary of Q2 2021 product development achievements: • Launched Ola App - a iOS and Android native app that provides learners with hundreds of hours of speaking and pronunciation exercises. Added Assessment Test security features including: - browser locking full screen lock, one login per device, and student declaration and selfie picture to verify identity. - this allows ELL Technologies to sell the Assessment Test as a stand-alone solution. • Advanced teacher development course with expected completion in Q3. As at June 30, 2021, Lingo Media had working capital of $2,112,984 compared to $1,779,076 as at June 30, 2020. Total comprehensive income for the three-month period ended June 30, 2021 was $451,588 compared to comprehensive income of $557,802 for the period ended June 30, 2020. As at June 30, 2021, the Company had cash of $1,292,042 compared to $1,127,418 in 2020. Accounts and grants receivable of $1,188,781 were outstanding at the end of the period compared to $983,235 in 2020. With 98% of the receivables from PEP and the balance due from ELL Technologies customers with a 90 - 180 days collection cycle, the Company does not anticipate an effect on its liquidity. Total current assets amounted to $2,588,007 (2020 - $2,242,448) with current liabilities of $475,022 (2020 - $463,372) resulting in working capital of $2,112,984 (2020 - $1,779,076). Lingo Learning receives government grants based on certain eligibility criteria for publishing industry development in Canada and for international marketing support. These government grants are recorded as a reduction of general and administrative expenses to offset direct expenditure funded by the grant. The Company receives these grants throughout the year. The grant is applied based on Lingo Learning meeting certain eligibility requirements. The Company has relied on obtaining these grants for its operations and has been successful at securing them in the past, but it cannot be assured of obtaining these government grants in the future. ELL Technologies has developed and is marketing one of the largest libraries of online language learning resources in the world. The library has more than 3,000 hours of interactive learning through a number of product offerings that include Winnie’s World, English Academy, Campus, English for Success, Master and Business in addition to courses to learn French, Mandarin, Spanish, and Portuguese languages. ELL Technologies is primarily marketed in Latin America, Asia, Europe, and now the U.S. through a network of distributors and earns its revenues from online and offline licensing fees from its suite of web-based language learning products and applications. ELL Technologies’ high-tech, easy to implement eLearning Software-as-a-Service solutions have positioned the Company to provide learners of all ages and levels of English proficiency with a platform to further their language learning development. All products have been designed by our proprietary tools enabling ELL Technologies to market and sell to academic institutions and governments. Educators who license the platform are able to easily assign, and arrange lessons and courses as they see fit, including personalizing the learning to a particular individual’s needs and progress. Formative assessments and data gathering functionality allows us to adapt and improve content. Based on that data, we are able to program iterations to address specific problem areas and to make learning more accessible, efficient and measurable. Built for learners, by learners, we empower educators and allow them to easily transition from pure classroom paper-based teaching to the online world.
