Lemontonic Inc. Announces Final Terms of Proposed Financing and Execution of Amalgamation Agreement

TSX VENTURE: LEM-X

TORONTO, Sept. 30 /CNW/ - Lemontonic Inc. ("Lemontonic" or the
"Corporation") (TSX Venture: LEM-X) today announced it has entered into an
engagement letter with Research Capital Corporation ("Research Capital"),
pursuant to which the terms of its previously announced private placement will
be completed.
The private placement will consist of approximately 23,000,000
subscription receipts of Lemontonic (the "Subscription Receipts") at a price
of $0.085 per receipt (the "Offering Price") for gross proceeds of
approximately $1,955,000 (the "Lemontonic Private Placement"), to be completed
in one or more closings. Proceeds from the Private Placement of Subscription
Receipts will be held in escrow (the "Escrowed Funds") until the earlier of:
(a) the concurrent closing of the amalgamation of Lemontonic with Pioneering
Technology Inc. ("Pioneering") (the "Amalgamation" or "Business Combination")
to form a new company called Pioneering Technology Inc. ("New Pioneering");
(b) four months and a day after the closing of the Lemontonic Private
Placement (the "Amalgamation Deadline"); and (c) three business days after
receipt of the election of the subscriber to receive units of Lemontonic. Each
Subscription Receipt will entitle the holder, upon release of the Escrowed
Funds from escrow, to receive one unit (the "Units") of Lemontonic, each
consisting of one Common Share of Lemontonic and one share purchase warrant
(the "Warrants"). Each Warrant will entitle the holder to acquire one
additional Common Share of Lemontonic at an exercise price of $0.15 per Common
Share for a period of two years from the date of issuance. Should the
Amalgamation not close by the Amalgamation Deadline, holders of Subscription
Receipts will be entitled: (i) to be refunded the aggregate amount of the
subscription price paid, plus interest; or (ii) at the subscriber's election,
to receive Units of Lemontonic. Research Capital will be paid a commission and
will be granted agents' options (the "Lemontonic New Agents' Options") to
purchase Units in the aggregate amount of 10% of the number of Subscription
Receipts issued pursuant to the Lemontonic Private Placement at the Offering
Price for a period of two years from the closing date.
Lemontonic intends to complete the Lemontonic Private Placement in escrow
on October 11, 2005, and to use the proceeds of the Lemontonic Private
Placement for general working capital purposes of New Pioneering, in the
discretion of the Board of Directors of New Pioneering, after completion of
the Amalgamation.
Lemontonic is also pleased to announce it has entered into an
amalgamation agreement with Pioneering, pursuant to which the Corporation and
Pioneering have agreed to complete the Amalgamation and continue as New
Pioneering.
Pursuant to the terms of the Amalgamation Agreement: (i) the holders of
the Pioneering Common Shares will receive one common share of New Pioneering
(the "New Pioneering Common Shares") with a deemed value of $0.085 per share
for each Pioneering Common Share owned; and (ii) the holders of the Lemontonic
Common Shares will receive one New Pioneering Common Share and one common
share of New Lemontonic (defined below) (the "New Lemontonic Shares") for each
existing Lemontonic Common Share owned. The outstanding Lemontonic agent's
options, warrants and stock options shall be replaced with agent's options,
warrants and stock options of New Pioneering with identical terms.
As previously announced, it is a condition of the Amalgamation that
Lemontonic either sell or shut down its existing online dating business.
Lemontonic has in a previous press release announced that it has entered into
a letter agreement and an amending letter agreement (the "Silverback Letter
Agreement") with Silverback Media Limited ("Silverback Media"), pursuant to
which Lemontonic has agreed to sell its existing online dating business to
Silverback Media. Lemontonic will transfer its existing online dating business
(the "Lemontonic Reorganization") to a new subsidiary ("New Lemontonic") and
pursuant to the Amalgamation Agreement, shareholders of Lemontonic will
receive New Pioneering Common Shares, as well as New Lemontonic Shares, such
that shareholders of Lemontonic will own 81.5% of New Lemontonic and New
Pioneering will own the remaining 18.5%. After completion of the Lemontonic
Reorganization and the Amalgamation, pursuant to the Silverback Letter
Agreement, New Lemontonic and Silverback Media then intend to complete a
merger by way of amalgamation or arrangement (the "Silverback Merger").
Pursuant to the Silverback Merger, the shareholders of New Lemontonic will
receive shares of Silverback Media on the basis of an aggregate of
CDN$14,972,000 in shares of Silverback Media at a price of US$2.00 per share,
or lower in certain circumstances, for an aggregate of 6,327,916 shares of
Silverback Media (based on an exchange ratio of US$0.8453 for each CDN$1.00)
to be issued to all shareholders of New Lemontonic. Of the New Lemontonic
Shares outstanding, 81.5% will be owned by shareholders of Lemontonic and
18.5% will be owned by New Pioneering.

Conditions of Closing

The completion of the Amalgamation and the Lemontonic Reorganization are
subject to the approval of TSX Venture and all other necessary regulatory
approval. The completion of the Amalgamation and the Lemontonic Reorganization
is also subject to additional conditions precedent, including shareholder
approval of Lemontonic and Pioneering, satisfactory completion of due
diligence reviews by the parties, board of directors approval of Lemontonic
and Pioneering, the entering into of employment agreements and non-competition
agreements with certain senior officers and principal shareholders of
Pioneering, and certain other usual conditions. The closing of the
Amalgamation is not conditional on the completion of the Silverback Merger,
and will be completed if the closing conditions are met even if the Silverback
Merger is not completed.
The completion of the Silverback Merger is subject to the receipt of all
necessary regulatory approval and certain other conditions precedent,
including shareholder approval of New Lemontonic, directors approval of New
Lemontonic and Silverback Media, satisfactory completion of due diligence
review by the parties, the entering into of a formal binding agreement and the
listing of the shares of Silverback Media on an acceptable stock exchange or
bulletin board.

About Pioneering

Pioneering is an "Energy-Smart" product innovation company based in
Mississauga, Ontario that creates platform and derivative technologies that
manage, control and transform heat into useful forms of energy. Pioneering
engineers and brings to market energy smart solutions for consumer products
making them safer, smarter and/or more efficient. Pioneering's business to
business model is focused on developing innovative solutions for existing
industry problems and licensing or selling its proprietary product components
to leading Original Equipment Manufacturer's ("OEM's") and other established
distribution channels.

Completion of the Amalgamation is subject to a number of conditions,
including but not limited to, TSX Venture acceptance and shareholder approval.
The Amalgamation cannot close until the required shareholder approval is
obtained. There can be no assurance that the Amalgamation will be completed as
proposed or at all.
Investors are cautioned that, except as disclosed in the Information
Circular of the Corporation to be prepared in connection with the Amalgamation
any information released or received with respect to the Amalgamation may not
be accurate or complete and should not be relied upon. Trading in the
securities of the Corporation should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the
Amalgamation and has neither approved nor disapproved the contents of this
press release.

Except for historical information contained herein, this news release
contains forward-looking statements that involve risks and uncertainties.
Actual results may differ materially. Factors that might cause a difference
include, but are not limited to, market acceptance of principal products, the
impact of competitive products and technologies, the possibility of products
infringing patents and other intellectual property of fourth parties, and
costs of product development. Lemontonic will not update these forward-looking
statements to reflect events or circumstances after the date hereof. More
detailed information about potential factors that could affect financial
results is included in the documents filed from time to time with the Canadian
securities regulatory authorities by Lemontonic.

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