Mr. Grant Schuetrumpf reports

YANGAROO ANNOUNCES Q2 2023 RESULTS

Yangaroo Inc. has released its financial results for the second quarter ended June 30, 2023. The full text of the Financial Statements and Management Discussion & Analysis is available at www.yangaroo.com and at www.sedar.com. Please note that all currency in this press release is denominated in United States dollars, unless otherwise noted.

The second quarter of 2023 showed significant advancements with respect to operating income and cash-flow generation, as compared with prior-year quarter losses, and improved sales volume and revenue, when adjusted for seasonality. The Advertising Division increased delivery volumes in the quarter was mostly due to a significant client's increase in campaign activity, which has now been completed. The Awards Division results were down compared with this time in the prior year. The result is attributed to the timing of our award shows and is expected to recover and exceed prior-year Awards Division revenue in 2023. The Music Division revenue was down, on a year-over-year basis, mostly due to fewer new music video deliveries by major record labels. Music audio deliveries continue to be only marginally down on a year-over-year basis, attributed to a slower start to the year than historical trends.

Advertising Division

• Revenue of $1,583,809 in Q2 2023 versus revenue of $1,250,277 in Q2 2022
• Entertainment Group (Music & Awards Divisions)
• Revenue of $588,721 in Q2 2023 versus revenue of $665,030 in Q2 2022

Grant Schuetrumpf, CEO of Yangaroo, stated, "We are pleased with the progress we've achieved in stabilizing our operations after the challenges of 2022. This progress is evident in the consecutive and sequential quarters of Normalized EBITDA generation. Additionally, we've observed modest advancements in business development and sales opportunities compared to last year's period. Our approach remains cautious and grounded as we strategically leverage these prospects for gradual growth in the future.

"To fuel new revenue streams across our divisions, we've taken a pragmatic and attainable approach to capitalize on emerging opportunities. Within the Advertising Division, our efforts encompass an expanded solution offering, including TV Legal Clearance, Analytics, amplified post-production capabilities, and overall platform enhancements alongside technology integrations. This expanded scope is anticipated to pave the way for more substantial opportunities. While the Music Division encountered volume challenges early in Q1'23, especially with significant record-label music video releases, we are encouraged by a volume uptick towards the quarter's end. Our dedication to nurturing the music division and elevating user experiences persists, aimed at optimizing music promotion possibilities. Moreover, our Award Shows Division is diligently working on finalizing the new Awards technology, a development that positions us to provide a comprehensive solution to a broader market, thus extending our reach and potential."

Operating Expenses and Normalized EBITDA

• The company completed additional head-count reductions in the current quarter and incurred restructuring expenses of $49,384. Continued reductions in head-count resulted in a salary expenses of $1,344,064 or a savings of $163,759 versus the second quarter of 2022.
• Technology and production expenses continued to decline with savings of $48,569 versus the second quarter of 2022 resulting from continued efforts to reduce over-head expenditures.
• Third consecutive quarter of significant Normalized EBITDA; the company generated $526,202 of Normalized EBITDA in Q2 2023, $116,143 of Normalized EBITDA in Q1'23 and $833,974 of Normalized EBITDA in Q4'22.

Approaching the latter part of 2023, Yangaroo maintains its commitment to pursue its growth strategy diligently. This involves actively broadening its customer base and consistently investing in its platform. Although linear advertising delivery needs are decreasing due to the known technological shift towards CTV, Yangaroo remains uniquely positioned to offset the impact by an increase new customer sign-ups. The music promotion services continue to show gradual improvement, aligning more closely with budget expectations. The company is well-positioned to capitalize on both organic and strategic paths for growth, leveraging its current market positions.

Q2 2023 Financial Highlights

• Revenue in Q2 2023 was $2,172,530 compared with $1,845,253 and $1,915,307 in the first quarter of 2023 and the second quarter of 2022, respectively.
  • Revenue increased by $327,277 or 18 per cent versus Q1 2023. The increase in revenue was due to increased Advertising revenue with an increase of $149,219 or 12 per cent, and increased Music and Awards revenue with an increase of $178,058 or 27 per cent. The increase in Advertising revenue is attributed to an increase in revenue recognized from one of the company's existing customers. The increase in Awards revenue is primarily attributed to cyclicality in our customer's award show schedules which typically peak in the summer periods.
  • Revenue increased by $257,223 or 13 per cent versus Q2 2022. The increase in revenue is primarily attributed to increased Advertising revenue of $333,532 or 27 per cent offset by a decline in Awards and Music revenue of $76,911 or 11 per cent. The primary factors affecting advertising sales in the current quarter is attributed to an increase in ad delivery volume recognized from one of the company's existing customers. The decrease is primarily attributed to a current year reduction and the timing of activity in Awards Shows as well as lower volumes amongst Music customers.
• Operating expenses in Q2 2023 were $1,905,839 compared with $2,100,123 and $2,259,186 in the first quarter of 2023 and the second quarter of 2022, respectively.
  • Operating expenses decreased by $194,284 or 9 per cent versus Q1 2023. The decrease in operating expenses is primarily attributed to the reversal of previously recorded bad debts and decreased legal and professional services fees.
  • Operating expenses decreased by $353,347 or 16 per cent versus Q2 2022. The decrease in operating expenses is primarily attributed to a reduction of employee headcount, enacted primarily in the first half of 2022, which is fully realized in 2023, and a continued focus on lower marketing and technology spend as part of the company's cash saving measures, in addition to the reversal of previously recorded bad debts.
• Normalized EBITDA in Q2 2023 was $526,202 in comparison to normalized EBITDA of $116,143 in the first quarter of 2023 and normalized EBITDA loss of $42,766 in the second quarter of 2022.
  • Normalized EBITDA increased by $410,059 compared with Q1 2023. The increase is primarily attributed to an increase in revenue in addition to reductions in the company's operating expenses, as discussed in further detail above.
  • Normalized EBITDA increased by $568,968 compared with Q2 2022. The increase is primarily attributed to significantly lower operating expenses, primarily attributed to reduced salaries, general and administrative costs and restructuring expenses, as discussed in further detail above.

About YANGAROO

Yangaroo is a technology provider in the media and entertainment industry, offering a cloud-based software platform for the management and distribution of digital media content. Yangaroo's Digital Media Distribution System ("DMDS") platform is a patented cloud-based platform that provides customers with a centralised and fully integrated workflow directly connecting radio and television broadcasters, digital display networks, and video publishers for centralised digital asset management, delivery and promotion. DMDS is used across the advertising, music, and entertainment awards show markets.

YANGAROO Inc. is a publicly listed company incorporated on July 28, 1999 under the laws of Ontario as Musicrypt.com Inc. and changed to its present name on July 17, 2007. YANGAROO trades on the TSX Venture Exchange ("TSX-V") under the symbol YOO and in the U.S. under OTCPK: YOOIF.

The address of the company's corporate office and principal place of business is 360 Dufferin Street, Suite 203, Toronto, Ontario, M6K 3G1.

We seek Safe Harbor.