YANGAROO : 2021 – Q4 Management Discussion & Analysis

YANGAROO INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

YEAR ENDED DECEMBER 31, 2021

(EXPRESSED IN CANADIAN DOLLARS)

Q4 2021 Management's Discussion & Analysis

Introduction

Unless the context suggests otherwise, references to "the Company", "Yangaroo", "we", "us" or similar terms refer to YANGAROO Inc. This Management's Discussion and Analysis ("MD&A") is a discussion and review of operations, current financial position and outlook for Yangaroo and should be read in conjunction with the audited financial statements for the years ended December 31, 2021 (the "Financial Statements"), which are prepared in accordance with International Financial Reporting Standards ("IFRS"). The information below is prepared in accordance with IFRS and is presented in Canadian dollars, unless otherwise noted. Subsequent to year-end, the Company changes its reporting currency to be the United States dollar. See below Outlook section commentary for further detail.

Forward Looking Information

The Company's reporting structure reflects how it manages its business and how it classifies its operations for planning and for measuring its performance. This MD&A contains assertions about the objective, strategies, financial conditions, outlook, revenue guidance, EBITDA guidance, and results of operations. These statements are considered "forward-looking" because they are based on current expectations of the Company's business, in those markets in which it operates, and on various estimates and assumptions.

These forward-looking statements describe the Company's expectations at May 2, 2022. The Company's actual results could be materially different from its expectations if known or unknown risks affect the business, or if the Company's estimates or assumptions turn out to be inaccurate. As a result, the Company cannot guarantee that any forward-looking statements will materialize. Forward-looking statements do not take into account the effects that transactions or non-recurring items, announced or occurring after the statements are made, may have on the business. The Company disclaims any intention or obligation to update any forward-looking statements, except as required by law, even if new information becomes available through future events or for any other reason. Risks that could cause the Company's actual results to differ materially from its current expectations are stated in the Risk Management section.

Description of Business

Yangaroo is a software company that is the provider of workflow management solutions within the media and entertainment ecosystem. The Company's Digital Media Distribution System (DMDS) platform is a patented cloud-based technology that provides customers with a fully integrated workflow and broadcaster connected managed network for digital content delivery and related data management across the advertising, music, and entertainment award 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 OTCBB: YOOIF.

The address of the Company's corporate office and principal place of business is 67 Mowat Avenue, Suite

YANGAROO Inc.

Management's Discussion & Analysis

December 31, 2021

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Q4 2021 Management's Discussion & Analysis

535, Toronto, Ontario, M6K 3E3.

COVID-19 Matters

The ongoing COVID-19 pandemic crisis continues to evolve rapidly and could have a material adverse impact on our business, affairs, operations, results of operations, financial condition, liquidity, availability of credit and foreign exchange exposure. COVID-19 is altering business and consumer activity in affected areas and beyond. The global response to the COVID-19 outbreak has resulted in, among other things, border closures, severe travel restrictions, the temporary shut-down of non-essential services and extreme fluctuations in financial and commodity markets. Additional measures may be implemented by one or more governments in jurisdictions where we operate. Labour shortages due to illness, isolation programs imposed by us or the government, or restrictions on the movement of personnel could result in a reduction or cessation of all or a portion of our operations. The extent to which the COVID-19 pandemic may impact our business and activities will depend on future developments which remain highly uncertain and cannot be predicted with confidence, such as the spread of the disease, the duration of the outbreak, severity of the coronavirus and actions taken by the Canadian and US authorities, the postponement, suspension, cancellation, rescheduling and resumption of sporting events, the impact of the pandemic on consumer and advertiser spending, and the ability or willingness of suppliers and vendors to provide products and services. If the coronavirus continues to spread at the current pace, disruption to consumer spending and trade could trigger a global recession. The actual and threatened spread of COVID-19 globally could also have a material adverse effect on the regional economies in which we operate, could continue to negatively impact stock markets, including the trading price of our common shares, could cause continued interest rate volatility and movements and could adversely impact our ability to raise capital. Any of these developments, and others, could have a material adverse effect on our business, affairs, operations, results of operations, financial condition, liquidity, availability of credit and foreign exchange exposure. In addition, because of the severity and global nature of the COVID-19 pandemic, it is possible that estimates in our financial statements could change in the near-term and the effect of any such changes could be material, which could result in, among other things, an impairment of non-current assets and a change in the expected credit losses on accounts receivable. We will monitor the situation and any impacts or potential impacts on our business on an ongoing basis.

YANGAROO Inc.

Management's Discussion & Analysis

December 31, 2021

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Q4 2021 Management's Discussion & Analysis

Outlook and Fourth Quarter Update

Q4'2021 Financial Highlights

•  Revenue in Q4'2021 was $2,923,261 compared to $2,067,026 and $3,059,383 in the fourth quarter of 2020 and the third quarter of 2021, respectively.

  • o Revenue increased by $856,235 or 41% versus Q4'2020. The increase in revenue was primarily due to increased sales in the Yangaroo Advertising revenue stream of $1,009,415 partially off-set by lower Yangaroo Music revenue of $153,180. The increase in Yangaroo Advertising revenue is primarily attributed to the acquisition of Digital Media Services ("DMS"), which closed on May 21, 2021, and the inclusion of related customer revenue. The decrease in Yangaroo Music revenue is attributed to lower usage of our DMDS platform by independent music artists and lower recurring monthly fees from music customers.

  • o Revenue decreased by $135,122 or 4% versus Q3'2021. The decrease in revenue is primarily attributed to lower sales in the Yangaroo Awards revenue stream of $70,258, primarily attributed to seasonality with annual recurring customers, and lower sales in the Yangaroo Music revenue stream of $105,092, primarily attributed to lower usage of our DMDS platform by independent music artists and lower recurring monthly fees from music customers.

•  Operating expenses in Q4'2021 were $3,261,105 compared to $1,945,118 and $3,051,964 in the fourth quarter of 2020 and the third quarter of 2021, respectively.

  • o Operating expenses increased by $1,315,988 or 68% versus Q4'2020. The increase in operating expenses is primarily attributed to the inclusion of operating expenditures related to the acquisition of DMS as well as increases in promotional expenses, stock based compensation, and higher spending on technology.

  • o Operating expenses increased by $209,141 or 7% versus Q3'2021. The increase in operating expenses is primarily attributed to higher marketing expenditures, related to higher promotion and sales activities as we exit the COVID-19 pandemic, higher salaries and consulting fees related to the issuance of restricted share units and related amortization costs, and higher general and administrative expenditures as they related to general legal work.

•  Normalized EBITDA loss in Q4'2021 was $204,812 in comparison to normalized EBITDA of $817,821 in the fourth quarter of 2020 and normalized EBITDA of $433,065 third quarter of 2021. The decrease in normalized EBITDA relative to the prior quarters is primarily attributed to higher salaries and consulting expenses as well as higher general and administrative expenses, both attributed primarily to the acquisition of DMS, in addition to higher technology expenses as we continue to invest in our DMDS platform.

•  During 2021 the Company completed a change in functional currency from the Canadian dollar to the US dollar. Beginning with the first quarter of 2022, the Company plans to report in US dollars,

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Management's Discussion & Analysis

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Q4 2021 Management's Discussion & Analysis

with the final Canadian dollar reporting occurring in the current financial statements and MD&A for the fourth quarter ended 2021.

Q4'2021 Operational Highlights

Business Developments & Advancements

•  Yangaroo announced a partnership with INNOVID Corp. (NYSE: CTV) expanding on our TV broadcast destinations to now include Connected Television (CTV) and digital video publishers. As advertising spend and placement expands cross media and further into ad supported streaming services, this is a key strategic development for the Company.

•  Yangaroo launched an advertising Analytics service. The service expands our current TV ad delivery platform by offering further insight on factual ad occurrences, audience impressions, and ad space cost estimations to assist with advertiser's media buying decisions.

•  Yangaroo announced a strategic alliance with 'The TEAMS Company (TTC)', owned by Cast & Crew, adding the ability to connect certain talent and rights management usage to Yangaroo's TV advertising deliveries. This relationship aims to improve our advertiser's ability to track and analyze their talent and rights management obligations.

•  Yangaroo launched its new TV Clearance online service, offering both a white glove and self-serve capability on the DMDS platform to manage TV legal clearance submissions and substantiations. The platform directly connects the advertiser or submitters submitting TV legal approval requests to the broadcasters legal/clearance departments.

These new advertising offerings aim to provide more powerful and comprehensive solutions for advertising customers. These advancements also further increase our unique selling proposition in the highly competitive advertising delivery industry.

•  Yangaroo announced the signing of a multi-year agreement with Universal Music Canada, continuing with our leading music promotion services across Canada, USA, and Latin American markets. The long-term service agreement formalizes our long-standing business relationship with Universal Music Canada.

Technology Development

Our technology development efforts contributed to the aforementioned advancements, along with completing the following initiatives:

•  Single Page Application; A crucial evolution of the platform that allows the development team to add new features and functionality much more efficiently.

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Management's Discussion & Analysis

December 31, 2021

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