Mr. Grant Schuetrumpf reports

YANGAROO ANNOUNCES Q1'2024 & FISCAL 2023 FINANCIAL RESULTS

Yangaroo Inc. has released its financial results for the fiscal year (FY) ended Dec. 31, 2023, and the first quarter (Q1) ended March 31, 2024. The year-end financial statements and corresponding management's discussion & analysis, and the first quarter financial statements and corresponding management's discussion and analysis, are available on the company's website and on SEDAR+. Please note that all currency in this news release is denominated in U.S. dollars, unless otherwise noted.

Grant Schuetrumpf, chief executive officer of Yangaroo, commented: "We are pleased to report significant advancements in our year-over-year operating results for both the first quarter of 2024 and fiscal year 2023. Our operating income notably improved, compared to the respective prior year's operating period, mostly due to increased sales volume and revenue in our advertising division, after adjusting for seasonality. We believe this growth is also owing in part to the acquisition of Millenia3 in November, 2023, by providing additional revenue and other intangible value for the advertising division from late in the 2023 fiscal year and continuing into 2024."

For the year ended Dec. 31, 2023, operating income and normalized EBITDA (earnings before interest, taxes, depreciation and amortization) increased to $13,702 and $1,135,575, respectively, from an operating loss of $430,352 and normalized EBITDA of $536,209 in 2022.

In FY 2023, the advertising division experienced an increase in delivery volumes and sales per customer, along with expanded services and use across trafficking, production and analytics. This growth was further bolstered by the acquisition of Millenia3 in November, 2023. To date, the Millenia3 integration has gone smoothly with the team continuing to serve the transitioned customers while integrating and streamlining its operations and technology with the company's existing systems. The entertainment group's music division saw a decline in revenue year over year primarily due to major record labels reducing new music video deliveries, while music audio track promotional deliveries remained stable. The awards division experienced only a slight year-over-year decline in revenue largely due to the timing of certain award shows.

For the three months ended March 31, 2024, operating income and normalized EBITDA increased to $17,369 and $237,582, respectively, from an operating loss of $254,870 and normalized EBITDA of $116,293 in Q1 2023.

The year-over-year improvement in Q1 2024 results can largely be attributed to the full integration of the Millenia3 operations into the company's advertising division results, as well as the continued expansion of the company's trafficking, production and analytics services. The entertainment group's music division saw a rebound in music delivery activity and achieved a modest year-on-year revenue increase while the awards division, with the company's normal roster of award show clients recommitted for 2024, experienced only a slight decline in revenue due to the timing of scheduled award show programming.

Mr. Schuetrumpf continued: "We are excited to announce our seventh consecutive quarter of positive normalized EBITDA, which we see as a testament to our stable operations and unwavering commitment to exceptional client service. As we move through 2024, our focus will remain on executing our growth strategy, expanding our customer base and investing in our technology platform. Despite the challenges and uncertainties in the advertising and music markets, we believe we are well positioned to seize both organic and non-organic growth opportunities."

Fiscal 2023 financial highlights:

• Revenue in fiscal 2023 was $7,885,482, an increase of $150,638 over $7,734,844 in 2022. This is largely driven by increased advertising revenue, partially offset by entertainment revenue:
  1. Advertising: The company earned advertising revenue of $5,676,770 in the year ended Dec. 31, 2023, an increase of $374,736 over the same period in 2022. The increase from the previous year is primarily attributed to additional revenue from Millenia3 acquisition, offset by a slowdown in the advertising industry and corresponding decline in the company's customer volumes.
  2. Entertainment: The company earned entertainment revenue of $2,208,712 in the year ended Dec. 31, 2023, representing a decrease of $224,098 over the same period in 2022. The decrease from the prior year is primarily attributed to slower activity in awards, as well as lower volumes among music customers.
• Total operating expenses for the year ended Dec. 31, 2023, were $7,871,780, a decrease of $293,416 over the prior-year period:
  1. Salaries and consulting: Salaries and consulting expense for the year ended Dec. 31, 2023, was $4,925,803, representing a significant decrease of $871,998 over the same period in the prior year, excluding a one-time, non-recurring, employment tax credit of $538,018 recognized in the fourth quarter (Q4) of 2022. The management will continue focus on operational optimizations in the fiscal year of 2024.
  2. Marketing and promotion: Marketing and promotion expense for the year ended Dec. 31, 2023, was $251,589, representing a slightly increase of $7,717 versus the prior-year period. The increase from the prior year was primarily resulting from higher marketing and sales activities as the company revamp for business growth and development.
  3. General and administrative: General and administrative expenses for the year ended Dec. 31, 2023, were $786,691, representing a decrease of $316,333 over the prior year. The decrease is primarily related to lower professional services fees.
  4. Technology development: Technology development expense for the year ended Dec. 31, 2023, was $627,389, representing a decrease of $12,877 over the same period in the prior year. The decrease from the prior year is primarily attributed to lower costs from third party software, hardware and cloud requirements, offset by a decrease from investment tax credits. For the year ended Dec. 31, 2023, the company's normalized EBITDA was $1,135,575, in comparison with normalized EBITDA of $536,209 in 2022. The increase in normalized EBITDA versus the prior year and prior quarter is primarily attributed to the lower head count costs and reduced professional fees.

Q1 2024 financial highlights:

• Revenue in Q1 2024 was $1,922,631, compared with $1,845,253 in the first quarter of 2023:
  • Revenue increased by $77,378 or 4 per cent versus Q1 2023. The increase in revenue was primarily driven by higher advertising revenue and music with an increase of $89,978 or 6 per cent and $16,686 or 6 per cent, respectively, slightly offset by lower awards revenue with a decrease of $29,287 or 20 per cent. The increase in advertising revenue is attributed to business growth from Millenia3 acquisition and the increase in music revenue is attributed to higher new music video deliveries from major record labels and music audio deliveries.
• Operating expenses in Q1 2024 were $1,905,262, compared $2,100,123 the first quarter of 2023, respectively:
  • Operating expenses decreased by $194,861 or 9 per cent versus Q1 2023. The decrease in operating expenses is primarily attributed to head count and general and administrative expenses, partially offset by increased marketing and technology expenses.
• Normalized EBITDA in Q1 2024 was $237,582, in comparison with normalized EBITDA of $116,293 in Q1 2023:
  • Normalized EBITDA increased by $121,289, compared with Q1 2023. The increase is primarily attributed to higher revenue from advertising and music and lower operating expenses from salary and general and administrative fees.

Cease trade order and suspension of trading

The TSX Venture Exchange suspended trading in the common shares of the company effective May 8, 2024, as a result of a failure-to-file cease trade order (FFCTO) issued by the Ontario Securities Commission (OSC) on May 7, 2024. As the filing of the annual filings (and the first quarter filings) have been made within 90 days of the date of the FFCTO, the filing of the annual filings (and first quarter filings) will constitute the application to revoke the FFCTO. Concurrently, the company intends to apply to the TSX Venture Exchange for reinstatement of trading of the company shares. The company will provide further updates as they become available.

About Yangaroo Inc.

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 centralized and fully integrated workflow directly connecting radio and television broadcasters, digital display networks, and video publishers for centralized digital asset management, delivery and promotion. DMDS is used across the advertising, music and entertainment awards show markets.

Yangaroo 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-V under the symbol YOO and in the United States on the OTCPK under YOOIF.

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

We seek Safe Harbor.