Lingo Media Corporation
TSX VENTURE : LM
OTC Bulletin Board : LMDCF

Lingo Media Corporation

September 17, 2008 10:38 ET

Lingo Media Closes $5 Million Investment From Orascom Telecom

TORONTO, ONTARIO--(Marketwire - Sept. 17, 2008) - Lingo Media Corporation (TSX VENTURE:LM) (OTCBB:LMDCF) ("Lingo Media" or the "Company") a leader in online and print-based English language learning products in China is pleased to announce that it has closed a non-brokered private placement (the "Financing") of $5,000,000 at $1.75 per unit from Orascom Telecom Holding S.A.E. ("Orascom Telecom") (ORTEq.L, OTLD LI, ORTE.CA, ORAT EY). Orascom Telecom is a subsidiary of Weather Investments S.p.A, a leading international telecommunications company providing mobile, fixed, internet and international communication services to over 90 million subscribers in Algeria, Bangladesh, Egypt, Greece, Italy, Pakistan and Tunisia and acquired a license to operate mobile services in North Korea in early 2008.

Lingo Media issued 2,857,143 special warrants ("Special Warrants") at a price of $1.75 per Special Warrant for total gross proceeds of $5,000,000 on September 15, 2008 (the "Closing Date"). Each Special Warrant is convertible for no additional consideration into units ("Units"), with each Unit consisting of one common share ("Common Share") and three-quarters (0.75) of one warrant ("Warrant"). Each whole Warrant is exercisable to acquire one further Common Share for a period of 24 months from the Closing Date: (i) at a price of $4.00 for a period of 12-months from the Closing Date, (ii) at a price of $6.00 per Common Share if exercised between 12-18 months from the Closing Date, and (iii) at a price of $8.00 per Common Share if exercised between 18-24 months from the Closing Date. The Warrants are callable, 120 days after the Closing Date, at the option of Lingo Media, in the event the Common Shares of the Company trade at or over 50% above the strike price of the Warrant for 10 consecutive trading days.

At closing, the gross proceeds of the Financing (the "Escrowed Funds") were deposited in escrow in an interest bearing account and the Special Warrants distributed to an escrow agent. The Special Warrants will only become convertible, and the Escrowed Funds will only be released from escrow, following: (i) the date (the "Shareholder Approval Date") Lingo Media receives shareholder approval ("Shareholder Approval") of the Financing, (ii) Orascom Telecom's nominee for election to the board of directors of Lingo Media is elected onto the board of directors of Lingo Media ("Nominee Election") and (iii) the satisfaction of any closing conditions deferred by Orascom Telecom (together with the Shareholder Approval and Nominee Election, the "Release Conditions").

Upon the automatic conversion of the Special Warrants into Units, Orascom Telecom will become a new control person of Lingo Media, holding 22.96% of the issued and outstanding Common Shares of Lingo Media (or 34.28% on a fully diluted basis). Pursuant to applicable securities laws and TSX Venture Exchange rules regarding new control persons, Lingo Media will seek Shareholder Approval of the Financing at its annual and special meeting scheduled for October 14, 2008.

In the event the Release Conditions are not satisfied by 5:00 p.m. on the date that is four months and one day from the Closing Date, the Company will repurchase the Special Warrants issued at a purchase price equal to $1.75 per Special Warrant and the interest earned on the Escrowed Funds.

In connection with the Financing, Lingo Media will pay eligible persons (the "Finders"), after the Release Conditions are satisfied, a cash fee of 7% of the gross proceeds raised through the Finders under the Financing and also issued Compensation Options to acquire up to that number of Common Shares as is equal to 6% of the total number of Special Warrants issued through the Finders, exercisable at $2.00 each for a period of 12 months from the Closing Date.

The proceeds from the Financing will be used for Lingo Media's on-going development, maintenance and operation of Speak2Me's web portal and general working capital.

All securities issued pursuant to the Financing are subject to a four-month hold period from the Closing Date. The Financing is subject to TSX Venture Exchange acceptance of requisite regulatory filings.

Anthony Lacavera, Director of Lingo Media commented, "This financing and strategic partnership with Orascom Telecom positions Lingo Media very well to capitalize on the Company's growth opportunities. English language learning is increasingly moving to Internet-based applications, and Lingo Media's Speak2Me product puts the Company in a market leadership position".

Michael Kraft, CEO of Lingo Media said, "We are looking forward to our strategic financial partnership with Orascom Telecom. We are very excited about rolling out Speak2Me V1.0 by the end of September after running a closed invitation-only beta for the past five months and interacting with over 250,000 users. We started building our expanded feature set in early July and had been testing some of these new features in our beta, which we plan to begin rolling out by the end of this month. This product release has been timed to coincide with the launch of the qualifying round of our English Speech Contest in China and our launch advertising partner. With Orascom's online media properties, international scale and contacts, we look forward to rolling out Speak2Me in international markets."

About Orascom Telecom

Orascom Telecom is a leading international telecommunications company operating GSM networks in six high growth markets in the Middle East, Africa and South Asia, having a total population under license of approximately 440 million with an average mobile telephony penetration of approximately 44% as of June 30, 2008. Orascom Telecom operates GSM networks in Algeria ("OTA"), Pakistan ("Mobilink"), Egypt ("Mobinil"), Tunisia ("Tunisiana"), Bangladesh ("Banglalink"), Zimbabwe ("Telecel Zimbabwe"), and has acquired in early 2008 a license to operate mobile services in North Korea. Orascom Telecom had over 77 million subscribers as of June 30, 2008.

Orascom Telecom is traded on the Cairo & Alexandria Stock Exchange under the symbol (ORTE.CA, ORAT EY), and on the London Stock Exchange its GDR is traded under the symbol (ORTEq.L, OTLD LI).

About Lingo Media (TSX VENTURE:LM) (OTCBB:LMDCF)

Lingo Media is a diversified education products and services corporation.

In China, Lingo Media through its wholly-owned subsidiary Speak2Me Inc. ("Speak2Me"), a new media company, focuses on interactive advertising via its Internet-based English Language Learning portal. Speak2Me offers a proprietary and groundbreaking online service designed to address the rapidly growing need for conversational English around the world. Using robust speech recognition technology, Speak2Me provides more than 250-targeted language lesson modules involving interactive conversations with a virtual teacher. A unique social-network infrastructure also allows students to form study groups, creating an environment that, along with contests and prizes, engenders co-operation and competition, just as in a conventional classroom. Beta launched in April 2008 in China - the largest market in the world for English Language Learning - Speak2Me is a free, advertising-based portal and is available at www.speak2me.cn.

In China, Lingo Media continues to expand its legacy business via its subsidiary Lingo Learning Inc. ("Lingo Learning"), a print-based publisher of English Language Learning programs in China since 2001. Lingo Learning has an established presence in China's education market of 200 million students. To date, it has published 244 million units from its library of more than 300 program titles in China.

In Canada, Lingo Media focuses on early childhood cognitive development, through its subsidiary A+ Child Development Ltd., ("A+") which distributes educational materials along with its unique curriculum. A+ has been operating in Canada for over ten years through its four offices in Calgary, Edmonton, Toronto and Vancouver. Lingo Media plans to introduce A+'s learning system and products to parents of pre-school children in China.

Portions of this press release may include "forward-looking statements" within the meaning of securities laws. 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 involve certain risks and uncertainties. Actual results may vary materially from management's expectations and projections and thus readers should not place undue reliance on forward-looking statements. Certain factors that can affect the Company's ability to achieve projected results are described in the Company's filings with the Canadian and United States securities regulators available on www.sedar.com or www.sec.gov/edgar.shtml.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

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