lmdcf20200908

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 ☒ Form 40-F ☐

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): ☐

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): ☐

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 ☐ No ☒

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-________________.

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.

The accompanying unaudited condensed consolidated interim financial statements of Lingo Media Corporation have been prepared by and are the responsibility of the Company's management. These unaudited condensed consolidated interim financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS") and reflect Management’s best estimates and judgements based on information currently available. The Company's independent auditor has not performed a review of these financial statements in accordance with standards established for a review of interim financial statements by an entity's auditor.

	Notes	September 30, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents			1,459,863			442,489
Accounts and grants receivable	5		249,383			838,502
Prepaid and other receivables			84,677			121,603
			1,793,923			1,402,594
Non-Current Assets
Property and equipment	6		27,171			35,215
Right-of-use assets	7		446,773			514,181
TOTAL ASSETS		$	2,267,867		$	1,951,990

EQUITY AND LIABILITIES

Current Liabilities
Accounts payable			74,564			226,001
Accrued liabilities			127,366			191,993
Contract liability	8		174,457			192,958
Lease obligation	7		19,344			75,116
		$	395,731		$	686,068

Non-Current Liabilities
Loan payable	9		30,000			-
Lease obligation	7		499,646			499,646
TOTAL LIABILITIES		$	925,377		$	1,185,714

Equity
Share capital	10		21,914,722			21,914,722
Share-based payment reserve	11		4,069,087			4,049,032
Accumulated other comprehensive income			(264,638	)		(319,994	)
Deficit			(24,376,681	)		(24,877,484	)
TOTAL EQUITY			1,342,490			766,276
TOTAL EQUITY AND LIABILITIES		$	2,267,867		$	1,951,990

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

These condensed consolidated interim financial statements are authorized for issue by the Board of Directors on November 26, 2020.

	Notes	For the three months ended September 30						For the nine months ended September 30
		2020			2019			2020			2019

Revenue	15,17	$	68,775		$	117,545		$	1,143,288		$	1,124,714

Expenses

Selling, general and administrative expenses	13		275,419			219,617			28,808			650,534
Bad debt (recovery)			-			-			32,386			-
Direct costs			39,986			45,609			159,327			120,031
Development costs			88,972			45,627			187,200			150,320
Share-based payment	10		6,209			24,356			20,055			81,115
Depreciation – right-of-use assets	7		22,469			45,855			67,408			137,568
Depreciation – property and equipment	6		3,469			1,379			10,378			4,602
Total Expenses			436,524			382,443			505,562			1,144,170

Profit / (Loss) from Operations			(367,749	)		(264,898	)		637,726			(19,456	)

Net Finance Charges
Interest expense			5,238			10,371			(2,683	)		34,918
Foreign exchange (gain) / loss			(16,746	)		21,415			41,646			28,739

Profit / (Loss) before Tax			(356,241	)		(296,684	)		598,763			(83,113	)

Income Tax Expense	11		904			45,498			97,960			142,940

Net Profit / (Loss) for the Period			(357,145	)		(342,182	)		500,803			(226,053	)

Other Comprehensive Income

Exchange differences on translating foreign operations gain / (loss)			(43,578	)		21,663			55,356			(5,223	)

Total Comprehensive Income / (Loss), Net of Tax		$	(400,723	)	$	(320,519	)	$	556,159		$	(231,276	)

Earnings /(Loss) per Share
Basic		$	(0.01	)	$	(0.01	)	$	0.02		$	(0.01	)
Diluted		$	(0.01	)	$	(0.01	)	$	0.01		$	(0.01	)
Weighted Average Number of Common Shares Outstanding
Basic			35,529,132			35,529,132			35,529,132			35,529,132
Diluted			39,769,136			41,465,152			37,718,792			41,736,582

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

	Issued Share Capital				Share- Based Reserves		Accumulated Other Comprehensive Income			Deficit			Total Equity
	No. of Shares		Amount
Balance as at January 31, 2019		35,529,192	$	21,914,722	$	3,955,167	$	(271,245	)	$	(25,040,050	)	$	558,594
Loss for the period		-		-		-		-			(226,053	)		(226,053	)
Other comprehensive loss		-		-		-		(5,223	)		-			(5,223	)
Share-based payments charged to operations		-		-		81,115		-			-			81,115
Balance as at September 30, 2019		35,529,192	$	21,914,722	$	4,036,282	$	(276,468	)	$	(25,266,103	)	$	408,434
Income for the period		-		-		-		-			388,619			388,619
Other comprehensive income		-		-		-		(43,526	)		-			(43,526	)
Share-based payments charged to operations		-		-		12,750		-			-			12,750
Balance as at December 31, 2019		35,529,192	$	21,914,722	$	4,049,032	$	(319,994	)	$	(24,877,484	)	$	766,276
Income for the period		-		-		-		-			500,803			500,803
Other comprehensive income (loss)		-		-		-		55,356			-			55,356
Share-based payments charged to operations		-		-		20,055		-			-			20,055
Balance as at September 30, 2020		35,529,192	$	21,914,722	$	4,069,087	$	(264,638	)	$	(24,376,681	)	$	1,342,490

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

	For the three months ended September 30						For the nine months ended September 30
	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Income (Loss) for the period	$	(357,145	)	$	(342,182	)	$	500,803		$	(226,053	)
Adjustments to Net Income (Loss) for Non-Cash Items:
Share-based payment		6,209			24,356			20,055			81,115
Unrealized foreign exchange (gain)/loss		(66,324	)		22,389			(21,791	)		(4,469	)
Bad debt expense		-			-			32,386			-
Depreciation		25,938			47,234			77,786			142,170
Lease inducement		-			(2,903	)					(8,710	)
Operating Income (Loss) before Working Capital Changes		(391,322	)		(251,106	)		609,239			(15,947	)

Working Capital Adjustments:
(Increase) / decrease in accounts and grants receivable		733,852			47,497			589,119			(88,478	)
(Increase) / decrease in prepaid and other receivables		47,118			5,841			36,926			6,930
Increase / (decrease) in accounts payable		(68,471	)		(18,925	)		(151,437	)		(112,104	)
Increase / (decrease) in accrued liabilities		(16,165	)		103,586			(64,627	)		194,035
Increase / (decrease) in contract liability		35,958			1,213			(18,501	)		(40,832	)
Cash Provided by (Used in) Operations		340,970			(111,894	)		1,000,719			(56,396	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		-			-			-			(450	)
Net Cash Flows Used in Investing Activities		-			-			-			(450	)

CASH FLOWS FROM FINANCING ACTIVITIES
Increase / (decrease) in lease obligation		(18,962	)		(49,029	)		(55,772	)		(146,630	)
Interest of lease obligation		10,437			-			32,427			-
Proceeds from loans		-			58,000			40,000			449,612
Repayment of loans payable		-			(58,000	)		-			(449,612	)
Net Cash Flows Provided By (Used in) Financing Activities		(8,525	)		(49,029	)		16,655			(146,630	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		332,445			(160,923	)		1,017,374			(203,476	)
Cash and Cash Equivalents, Beginning of the Period		1,127,418			191,290			442,489			233,843
Cash and Cash Equivalents, End of the Period	$	1,459,863		$	30,367		$	1,459,863		$	30,367

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

1.	CORPORATE INFORMATION

Lingo Media Corporation (“Lingo Media” or the “Company”) is a publicly listed company incorporated in Canada with limited liability under the legislation of the Province of Ontario and its shares are listed on the TSX Venture Exchange under the symbol “LM” and inter-listed on the OTC Markets under the symbol “LMDCF” and Frankfurt Stock Exchange under the symbol “LIMA”. The condensed consolidated interim financial statements of the Company as at and for the period ended September 30, 2020 comprise the Company and its wholly-owned subsidiaries: Lingo Learning Inc., ELL Technologies Ltd., Lingo Group Limited., ELL Technologies Limited, Vizualize Technologies Corporation, Speak2Me Inc., and Parlo Corporation (the “Group”).

Lingo Media is an EdTech company that is ‘Changing the way the world learns languages’. The Group provides online and print-based solutions through its two distinct business units: ELL Technologies Ltd. (“ELL Technologies”) and Lingo Learning Inc. (“Lingo Learning”). ELL Technologies provides online training and assessment for language learning. Lingo Learning is a print-based publisher of English language learning school programs in China.

The head office, principal address and registered office of the Company is located at 151 Bloor Street West, Suite 703, Toronto, Ontario, Canada, M5S 1S4.

2.	BASIS OF PREPARATION

2.1

Statement of compliance

These condensed consolidated interim financial statements are unaudited and have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’ (“IAS 34”) using accounting policies consistent with the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).

The condensed consolidated interim financial statements for the period ended September 30, 2020 were approved and authorized by the Board of Directors on November 26, 2020.

2.2

Basis of measurement

These condensed consolidated interim financial statements have been prepared on the historical cost basis except as provided in note 4. The comparative figures presented in these consolidated financial statements are in accordance with the same accounting policies.

2.3

Basis of consolidation

The condensed consolidated interim financial statements comprise the financial statements of the Company and its wholly owned subsidiaries controlled by the Company (the “Group”) as at September 30, 2020. Control exists when the Company is exposed to or has the rights to variable returns from its involvement with the entity and has the ability to affect these returns through its power over the entity.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All inter-group balances, transactions, unrealized gains and losses resulting from inter-group transactions and dividends are eliminated in full.

LINGO MEDIA CORPORATION

Notes to Condensed Consolidated Interim Financial Statements

For the period ended September 30, 2019

(Unaudited - See Notice to Reader)

2.	BASIS OF PREPRATION (Cont’d)

2.4

Functional and presentation currency

The functional currency is the currency of the primary economic environment in which the entity operates and has been determined for each entity within the Group. These consolidated financial statements are presented in Canadian Dollars, which is the Company’s functional currency. The functional currency of ELL Technologies Limited and Lingo Group Limited are United States Dollar (“USD”). All other subsidiaries’ functional currency is Canadian Dollar (“CAD”).

The functional currency determinations were conducted through an analysis of the consideration factors identified in IAS 21, “The Effects of Changes in Foreign Exchange Rates”.

3.	SIGINIFICANT ACCOUTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company’s condensed consolidated interim financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies, reported amounts of assets, liabilities and contingent liabilities, revenues and expenses at the date of the consolidated financial statements and during the reporting period.

Estimates and assumptions are continuously evaluated and are based on management’s historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods.

Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements is included in the following notes:

●

Determination of functional currency

●

Determination of expected credit loss

●

Recognition of internally developed intangibles

●

Recognition of government grant and grant receivable

●

Recognition of deferred tax assets

●

Valuation of share-based payments

6.	PROPERTY AND EQUIPMENT

	Computer and Office Equipment			Leasehold Improvements		Total
Cost, January 1, 2019	$	97,875		$	33,180	$	131,055
Additions		450			-		450
Write off		(12,126	)		-		(12,126	)
Effect of foreign exchange		(1,109	)		-		(1,109	)
Cost, September 30 2019	$	85,090			33,180	$	118,270
Effect of foreign exchange		(262	)		-		(262	)
Cost, December 31, 2019	$	84,828		$	33,180	$	118,008
Effect of foreign exchange		2,657			-		2,657
Cost, September 30, 2020	$	87,485		$	33,180	$	120,665

Accumulated depreciation, January 1, 2019	$	66,278		$	11,613	$	77,891
Charge for the period		4,602			5,807		10,409
Write off		(12,126	)		-		(12,126	)
Effect of foreign exchange		(356	)		-		(356	)
Accumulated depreciation, Sept. 30, 2019	$	58,398		$	17,420	$	75,818
Charge for the period		1,993			5,806		7,799
Effect of foreign exchange		(824	)		-		(824	)
Accumulated depreciation, December 31, 2019	$	59,567		$	23,226	$	82,793
Charge for the period		3,979			6,399		10,378
Effect of foreign exchange		323			-		323
Accumulated depreciation, Sept. 30, 2020	$	63,869		$	29,625	$	93,494

Net book value, December 31, 2019	$	25,261		$	9,954	$	35,215
Net book value, September 30, 2020		23,616		$	3,555	$	27,171

7.	RIGHT-OF-USE ASSETS

The Company has one office facility under lease. The lease term is 5 years from 2016, with an option to renew the lease for another 5-year term after that date.

Non-cancellable lease rentals are payable as follows:

Less than 1 year	$	19,344
Between 1 and 5 years		-
	$	19,344

LINGO MEDIA CORPORATION

Notes to Condensed Consolidated Interim Financial Statements

For the period ended September 30, 2019

(Unaudited - See Notice to Reader)

7.	RIGHT-OF-USE ASSETS (Cont’d)

On adoption of IFRS 16, the Company recognized lease obligations in relation to leases which had previously been classified as ‘operating leases’ under the principles of IAS 17, “Leases”. These obligations were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of January 1, 2019. The lessee’s incremental borrowing rate applied to the lease obligations on January 1, 2019 was 8%.

For the period ended September 30, 2020, an accretion of $32,427 in carrying amount of lease liability was recorded because of the use of present value factor at initial measurement.

For the period ended September 30, 2020, variable lease payments of $88,198 were recorded.

The Company has equipment leases and an office lease in Beijing which it has determined are not recognized as right of use assets or lease liabilities as they are short-term and low dollar value.

The Company’s lease obligation and movements therein during the period ended September 30, 2020:

	Lease Obligation
Lease obligation as of January 1, 2020	$	574,762
Accretion on lease liability		32,427
Lease payment		(88,198	)
Lease obligation at September 30, 2020	$	518,991
Of which are:
Current lease obligations	$	19,344
Long-term lease obligations		499,646
	$	518,990

The Company’s right-of-use assets and movements therein during the period ended September 30, 2020:

	Office Lease
Right-of-use assets at January 1, 2020	$	597,562

Accumulated depreciation, January 1, 2020		(83,381	)
Charge for the period		(67,408	)
Accumulated depreciation, September 30, 2020		(150,789	)
Right-of-use assets at September 30, 2020	$	446,773

LINGO MEDIA CORPORATION

Notes to Condensed Consolidated Interim Financial Statements

For the period ended September 30, 2019

(Unaudited - See Notice to Reader)

11.	SHARE-BASED PAYMENTS

In December 2017, the Company amended its stock option plan (the “2017 Plan”). The 2017 Plan was established to provide an incentive to management (officers), employees, directors and consultants of the Company and its subsidiaries. The maximum number of shares which may be reserved for issuance under the 2017 Plan is limited to 7,105,838 shares less the number of shares reserved for issuance pursuant to options granted under the 1996 Plan, the 2000 Plan, the 2005 Plan, the 2009 Plan and the 2011 Plan, provided that the Board of Directors of the Company has the right, from time to time, to increase such number subject to the approval of the relevant exchange on which the shares are listed and the approval of the shareholders of the Company.

The maximum number of common shares that may be reserved for issuance to any one person under the 2017 Plan is 5% of the common shares outstanding at the time of the grant (calculated on a non-diluted basis) less the number of shares reserved for issuance to such person under any option to purchase common shares of the Company granted as a compensation or incentive mechanism.

The exercise price of each option cannot be less than the market price of the shares on the day immediately preceding the day of the grant less any permitted discount. The exercise period of the options granted cannot exceed 10 years. Options granted under the 2017 Plan do not have any required vesting provisions. However, the Board of Directors of the Company may, from time to time, amend or revise the terms of the 2017 Plan or may terminate it at any time.

LINGO MEDIA CORPORATION

Notes to Condensed Consolidated Interim Financial Statements

For the period ended September 30, 2019

(Unaudited - See Notice to Reader)

11.	SHARE-BASED PAYMENTS (Cont’d)

The following summarizes the options outstanding:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contract Life (Yrs)
Outstanding as at January 1, 2019		6,804,000		$	0.21		2.77
Granted		1,050,000			0.08
Forfeited		(1,092,000	)		0.22
Outstanding as at September 30, 2019		6,762,000		$	0.13
Expired		(120,000	)	$	0.21
Outstanding as at December 31, 2019		6,642,000		$	0.13		1.52
Granted		450,000			0.05
Expired		(90,000	)		0.23
Forfeited		(122,000	)		0.18
Outstanding as at September 30, 2020		6,880,000		$	0.12		0.90

Options exercisable as at September 30, 2019	6,187,000	$	0.13
Options exercisable as at December 31, 2019	6,504,500	$	0.19
Options exercisable as at September 30, 2020	6,720,000	$	0.12

The weighted average remaining contractual life for the stock options outstanding as at September 30, 2020 was 0.90 years (2019 – 1.77 years, 2018 –1.97 years). The range of exercise prices for the stock options outstanding as at September 30, 2020 was $0.05 - $0.23 (2019 – $0.07 - $0.23, 2018 - $$0.20-$0.23). The weighted average grant-date fair value of options granted to management, employees, directors and consultants has been estimated at $0.0355 (2019 - $0.0519, 2018 - $0.12) using the Black-Scholes option-pricing model. The estimated fair value of the options granted is expensed immediately.

The vesting period on the options granted on February 4, 2020 is vested three months after grant date and vested quarterly.

The vesting periods on the options granted in 2019 was three months after grant date and vested quarterly.

The pricing model assumes the weighted average risk free interest rates of 1.37% (2019 – 2.19%, 2018 – 1.39%) weighted average expected dividend yields of nil (2019 – nil, 2018 – nil), the weighted average expected common stock price volatility (based on historical trading) of 123% (2019 – 105%, 2018 – 97%), a forfeiture rate of 0% (2019 – 0%, 2018 – 0%), a weighted average stock price of $0.20 (2018 - $0.07, 2017 - $0.20), a weighted average exercise price of $0.05 (2019 - $0.07, 2018 - $0.21), and a weighted average expected life of 2.85 years (2019 – 2.85 years, 2018 – 3 years), which were estimated based on past experience with options and option contract specifics.

13.

GOVERNMENT GRANTS AND SUBSIDY

Government Grants

Included as a reduction of selling, general and administrative expenses are government grants of $279,017 (2019 - $176,020), relating to the Company’s publishing projects. At the end of the period, $Nil (2019 - $166,382) is included in accounts and grants receivable.

One government grant for the print-based ELL segment is repayable in the event that the segment’s annual net income for each of the previous two years exceeds 15% of revenue. During the year, the conditions for the repayment of grants did not arise and no liability was recorded.

Ontario Interactive Digital Media Tax Credit

Included as a reduction of selling, general and administrative expenses is Ontario Interactive Digital Media Tax Credit. The Company received an approval and funding of its grant from the Province of Ontario’s Ontario Interactive Digital Media Tax Credit (“OIDMTC”) in the amount of $904,940. The OIDMTC is a refundable tax credit based on eligible Ontario labour expenditures in additional to eligible marketing and distribution expenditures claimed by a qualifying corporation with respect to interactive digital media products.

The Ontario Creates Interactive Digital Media (“IDM”) Fund Concept Definition and Production programs provide content creators with funding for high quality, original interactive digital media content projects that make a positive contribution to the Ontario economy.

The fund assesses innovative interactive media projects, including e-learning, that are deemed to contribute to education and learning through the application of text, images, and other multimedia. The approval process involves a full audit of the product and processes.

Canada Emergency Wage Subsidy

The Canada Emergency Wage Subsidy (“CEWS”) was announced on March 27, 2020. Effective April 11, 2020, the CEWS came into force providing a wage subsidy to eligible Canadian employers to enable them to continue to pay their Canadian employees through their own payroll. Due to the impact of COVID-19, the Company applied for CEWS and received $114,264 during the period and recorded this amount as a reduction of general and administrative expense.

14.

FINANCIAL INSTRUMENTS

Fair values

The carrying value of cash and accounts and grants receivable, approximates their fair value due to the liquidity of these instruments. The carrying values of accounts payables and accrued liabilities and loans payables approximate their fair value due to the requirement to extinguish the liabilities on demand or payable within a year.

Financial risk management objectives and policies

The financial risk arising from the Company’s operations are currency risk, liquidity risk and credit risk. These risks arise from the normal course of operations and all transactions undertaken are to support the Group’s ability to continue as a going concern. The risks associated with these financial instruments and the policies on how to mitigate these risks are as follows:

LINGO MEDIA CORPORATION

Notes to Condensed Consolidated Interim Financial Statements

For the period ended September 30, 2019

(Unaudited - See Notice to Reader)

14.

FINANCIAL INSTRUMENTS (Cont’d)

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s monetary assets and liabilities denominated in currencies other than the Canadian Dollar and the Company’s net investments in foreign subsidiaries.

The Company operates internationally and is exposed to foreign exchange risk as certain expenditures are denominated in non-Canadian Dollar currencies.

The Company has been exposed to this fluctuation and has not implemented a program against these foreign exchange fluctuations.

A 10% strengthening of the US Dollar against the Canadian Dollar would have increased the net equity approximately by $79,357 (2019 - $2,437) due to reduction in the value of net liability balance. A 10% of weakening of the US Dollar against the Canadian Dollar at September 30, 2020 would have had the equal but opposite effect. The significant financial instruments of the Company, their carrying values and the exposure to other denominated monetary assets and liabilities, as of September 30, 2020 are as follows:

	US Denominated USD
Cash		877,248
Accounts receivable		170,826
Accounts payable		22,470

Liquidity risk

The Company manages its liquidity risk by preparing and monitoring forecasts of cash expenditures to ensure that it will have sufficient liquidity to meet liabilities when due. The Company’s accounts payable and accrued liabilities generally have maturities of less than 90 days. On September 30, 2020, the Company had cash of $1,459,863, accounts and grants receivable of $249,383 and prepaid and other receivables of $84,677 to settle current liabilities of $395,731.

Credit risk

Credit risk refers to the risk that one party to a financial instrument will cause a financial loss for the counterparty by failing to discharge an obligation. The Company is primarily exposed to credit risk through accounts receivable. The maximum credit risk exposure is limited to the reported amounts of these financial assets. Credit risk is managed by ongoing review of the amount and aging of accounts receivable balances. As at September 30, 2020, the Company has outstanding trade receivables of $249,383 (2019 - $835,554). New impairment requirements use an 'expected credit loss' ('ECL') model to recognize an allowance. Impairment is measured using a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. For receivables, a simplified approach to measuring expected credit losses using a lifetime expected loss allowance is available. The Company deposits its cash with high credit quality financial institutions, with the majority deposited within Canadian Tier 1 Banks.

LINGO MEDIA CORPORATION

Notes to Condensed Consolidated Interim Financial Statements

For the period ended September 30, 2019

(Unaudited - See Notice to Reader)

17.

SEGMENTED INFORMATION

The Company operates two distinct reportable business segments as follows:

License of intellectual property: Lingo Learning is a print-based publisher of English language learning textbook programs in China. It earns significantly higher royalties from Licensing Sales compared to Finished Product Sales.

Online and Offline Language Learning: ELL Technologies is a global web-based educational technology (“EdTech”) language learning, training, and assessment company. The Company provides the right to access to hosted software over a contract term without the customer taking possession of the software. The Company also provides offline licenses for the right to use perpetual language-learning.

Transactions between operating segments and reporting segment are recorded at the exchange amount and eliminated upon consolidation.

Segmented Information (Before Other Financial Items Below)

September 30, 2020

Online English

Language Learning

Print-Based English

Language Learning

Head Office

Total

Segmented assets

238,375

1,991,878

37,614

2,267,867

Segmented liabilities

214,975

631,445

78,958

925,377

Segmented revenue - online

231,943

Segmented revenue - royalty

5,998

905,347

911,345

Segmented direct costs

85,766

73,562

159,327

Segmented selling, general & administrative

(560,557

)

143,522

445,843

28,808

Segmented profit / (loss)

491,469

514,629

(446,277

)

559,821

LINGO MEDIA CORPORATION

Notes to Condensed Consolidated Interim Financial Statements

For the period ended September 30, 2019

(Unaudited - See Notice to Reader)

17.

SEGMENTED INFORMATION (Cont’d)

September 30, 2019	Online English Language Learning			Print-Based English Language Learning		Head Office			Total
Segmented assets	$	83,575		$	1,352,840	$	37,643		$	1,474,058
Segmented liabilities		210,011			434,559		421,054			1,065,624
Segmented revenue		204,632			920,082		-			1,124,714
Segmented direct costs		53,916			66,116		-			120,031
Segmented selling, general & administrative		117,510			128,115		404,909			650,534
Segmented profit / (loss)		(121,555	)		445,723		(405,449	)		(81,281	)

September 30, 2018	Online English Language Learning			Print-Based English Language Learning		Head Office			Total
Segmented assets	$	241,658		$	1,067,041	$	76,182		$	1,384,881
Segmented liabilities		85,670			145,319		739,613			970,602
Segmented revenue		297,022			930,010		-			1,227,032
Segmented direct costs		98,870			68,315		-			167,185
Segmented selling, general & administrative		264,754			777,497		586,112			928,363
Segmented profit / (loss)		(189,020	)		633,955		(586,787	)		(141,852	)

Other Financial Items	2020			2019			2018
Online English Language Learning segmented income (loss)	$	491,469		$	(121,555	)	$	(189,020	)
Print-Based English Language Learning segmented income		514,629			445,723			633,955
Head office		(446,277	)		(405,449	)		(586,787	)
Foreign exchange		(41,646	)		(28,739	)		48,988
Interest income (expense)		2,683			(34,918	)		(43,032	)
Share-based payment		(20,055	)		(81,115	)		(87,539	)
Other comprehensive income (loss)		55,356			(5,223	)		(3,579	)
Total Comprehensive Income (Loss)	$	556,159		$	(231,276	)	$	(227,014	)

Revenue by Geographic Region

	2020		2019		2018
Latin America	$	196,377	$	171,927	$	240,695
China		910,637		927,840		952,090
Other		36,274		24,947		34,247
	$	1,143,288	$	1,124,714	$	1,227,032

LINGO MEDIA CORPORATION

Notes to Condensed Consolidated Interim Financial Statements

For the period ended September 30, 2019

(Unaudited - See Notice to Reader)

17.

SEGMENTED INFORMATION (Cont’d)

Identifiable Non-Current Assets by Geographic Region

	2020		2019		2018
Canada	$	473,462	$	1,466,198	$	1,378,026
China		482		7,859		6,855
	$	473,944	$	1,474,058	$	1,384,881

20.

COVID-19

Since December 31, 2019, the outbreak of the novel strain of coronavirus, specifically identified as “COVID-19,” has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions.

The extent to which COVID-19 and any other pandemic or public health crisis impacts the Company’s business, affairs, operations, financial condition, liquidity, availability of credit and results of operations will depend on future developments that are highly uncertain and cannot be predicted with any meaningful precision, including new information which may emerge concerning the severity of the COVID-19 virus and the actions required to contain the COVID-19 virus or remedy its impact, among others. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company and its operating subsidiaries in future periods.

LINGO MEDIA CORPORATION

Notes to Condensed Consolidated Interim Financial Statements

For the period ended September 30, 2019

(Unaudited - See Notice to Reader)

20.

COVID-19 (Cont’d)

Lingo Media has taken measures to protect its management, employees and contractors and has advised them to work from home and maintain a safe environment to ensure they are healthy and have minimal exposure to the risk of infection. In addition, the company is eligible and has applied for certain government subsidies, additional grants and interest-free loans, which will be reflected in the subsequent period financial statements.

The Company has contacted all the parties it is working with to ensure they are all working in a safe environment. A number of such parties have had an impact on their operations and ability to collaborate, while, a large number have identified multiple new business opportunities due to COVID-19 and the stay at home order of students in many countries. Lingo Media is offering e-learning solutions which fit the challenges schools and universities are facing by providing online language learning solutions. In addition, the Company has designed a number of programs to ensure its clients can easily deploy its suite of products that are well suited for a quarantined environment.

	LINGO MEDIA CORPORATION

Date: November 27, 2020	By:	/s/ “Gali Bar-Ziv”
		Gali Bar-Ziv President and CEO

Contents

Condensed Consolidated Interim Financial Statements	Page

Balance Sheets	3
Statements of Comprehensive Income (Loss)	4
Statements of Changes in Equity	5
Statements of Cash Flows	6
Notes to the Financial Statements	7-18

	September 30, 2020		December 31, 2019
Trade receivable	$	249,383	$	816,226
Grants receivable		-		22,276
	$	249,383	$	838,502

Balance, January 01, 2019	$	217,259
Amounts invoices and revenue deferred as at September 30, 2019		139,249
Recognition of deferred revenue included in the period		(180,081	)
Balance, September 30, 2019		176,427
Amounts invoices and revenue deferred as at December 31, 2019		62,530
Recognition of deferred revenue included in the period		(45,999	)
Balance, December 31, 2019	$	192,958
Amounts invoices and revenue deferred as at September 30, 2020		159,263
Recognition of deferred revenue included in period		(177,764	)
Balance, September 30, 2020	$	174,457

	2020		2019		2018
Income taxes and other taxes paid	$	97,960	$	142,940	$	154,654
Interest paid		34,198		27,590		43,032
Interest received	$	36,881		-		-

/s/ Gali Bar-Ziv		/s/ Jerry Grafstein
Director		Director