YANGAROO : 2022 – Q2 Management Discussion & Analysis

YANGAROO INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

QUARTER ENDED JUNE 30, 2022

(EXPRESSED IN UNITED STATED DOLLARS)

Q2 2022 Management's Discussion & Analysis

Introduction

Unless the context suggests otherwise, references to "the Company", "Yangaroo", 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 unaudited condensed interim financial statements for the three- and six- months ended June 30, 2022 and 2021 and the audited financial statements and related notes for the years ended December 31, 2021 and 2020 (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 United States dollars, unless otherwise noted.

Forward Looking Statements

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 August 29, 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.

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. 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

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Q2 2022 Management's Discussion & Analysis

postponement, suspension, cancellation, rescheduling and resumption of sporting events and award shows, the impact of the pandemic on consumer and advertiser spending, and the ability or willingness of suppliers and vendors to provide products and services. 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.

Description of Business

Yangaroo is a technology company providing digital asset workflow management solutions across the advertising and entertainment ecosystems. 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.

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Q2 2022 Management's Discussion & Analysis

Outlook and Second Quarter Update

Q2'2022 Financial Highlights

• Revenue in Q2'2022 was $1,915,308 compared to $1,989,043 and $1,759,691 in the first quarter of 2022 and the second quarter of 2021, respectively.

1. Revenue decreased by $73,735 or 4% versus Q1'2022. This decrease in revenue was primarily due to lower Advertising division sales of $216,378 offset by an increase in Entertainment division (Music and Awards) sales of $142,643. The decrease in the Advertising division revenue is largely attributed to a decrease in our clients advertising and marketing budgets. The increase in Awards revenue is attributed to seasonality in our customer's award show schedules. Music promotion did not have any material change in revenue over the comparable periods.

• 1. Revenue increased by $155,617 or 9% versus Q2'2021. The increase in revenue is primarily attributed to higher Advertising division sales of $133,751 resulting from the acquisition of the DMS business in Q2'2021, as well as increased Entertainment division sales of $21,886.
• Operating expenses in Q2'2022 were $2,259,186 compared to $2,492,222 and $1,659,981 in the first quarter of 2022 and the second quarter of 2021, respectively.
• 1. Operating expenses decreased by $233,036 or 9% versus Q1'2022. The decrease in operating expenses is primarily attributed to a reduction in headcount, and lower general and technology expenditures as we realize synergies from the DMS acquisition.

• 1. Operating expenses increased by $599,205 or 36% versus Q2'2021. 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 due to the return of in-person industry conferences, and higher spending on our technology.
• Normalized EBITDA loss in Q2'2022 was $151,088 in comparison to normalized EBITDA loss of $259,849 in the first quarter of 2022 and normalized EBITDA of $528,285 in the second quarter of 2021. The decrease in normalized EBITDA relative to the prior year quarter is primarily attributed to higher salary adjustments, some additional but temporary consulting expenses, as well as higher general and administrative expenses, all attributed primarily from the acquisition of DMS and ongoing investment for necessary improvements to our technology platform. Compared to the first quarter of 2022, we undertook a head count reduction program in response to the realization of efficiencies achieved by the DMS integration as well as other external market factors.
• In accordance with the terms of our loan facility, Yangaroo must maintain certain covenants and financial ratios that require non-IFRS financial measures, including Fixed Charge Coverage Ratio and Funded Debt to EBITDA. Yangaroo was not in compliance with these term facility covenants as of June 30, 2022.

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Q2 2022 Management's Discussion & Analysis

Subsequent to quarter-end, we received a waiver of the breach of the financial covenants from our lender for the second quarter ended June 30, 2022. As a result of the breach of the term facility financial covenants we have reclassified the full amount of the term facility as a current liability as of June 30, 2022 and will continue to present the liability as current until we successfully amend the term loan, receive a waiver of the covenant breaches for a period of 12-months in advance, or re-attain compliance of the breached financial covenants. We are currently in discussions with the lender regarding revising certain terms and conditions of our current term facility in order to bring us into compliance with the agreement. It is our intention to provide a further update regarding these discussion as soon as practicable.

Q2'2022 Operational Highlights

Business Developments & Advancements

• Yangaroo announced a strategic alliance with Clearcast Ltd., a London, United Kingdom, based provider of advertising delivery and clearance solutions across the United Kingdom and Ireland markets. The strategic alliance allows both companies to now provide a single multi-territory advertising delivery solution to all customers in each respective market, being North America, the United Kingdom and Ireland.
• Yangaroo exhibited for the first time at the Cannes Lions International Festival of Creativity 2022, the largest gather of creative marketing attendees in the world. Yangaroo cooperated with Clearcast within a co-sponsorship arrangement to promote the new strategic alliance to advertising agency groups and some of the world's largest brands.

Technology Development

We continued to invest in our technology advancements in the second quarter of 2022 with the following:

• Advertising: user-interface redesign of our single player application to improve the look and feel of our order creation process to reduce the friction required for a release to be processed.
• Awards: continued development of our new Judge 3.0 platforms as we as critical updates on the existing Awards platform to make it highly scalable to drive efficiency and its competitiveness. Our Judge 3.0 platform is expected to drive significant efficiencies and scalability starting in 2023.

Q2'2022 Update on the DMS acquisition

• On May 21, 2022, we marked the first year anniversary of the closing of the DMS transaction. We have completed the integration of DMS including its technology, employees, and customers. Cost saving synergies have now been fully realized and we expect annualized savings in excess of $1 million on an annualized run rate.
• The first payment of the DMS acquisition earn-out consideration, calculated as of May 19, 2022,

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