YANGAROO update on financing proposal

COMPANY PROVIDES FURTHER CLARIFICATION OF SHARE CONSOLIDATION REQUEST

TORONTO, Jan. 5, 2012 /CNW/ - YANGAROO Inc. (TSX-V: YOO, OTCBB: YOOIF), the industry's leading secure digital media distribution company had previously announced that it has received a non-binding financing proposal for up to $1,250,000 of debt financing and the Company is continuing to work to complete the conditions precedent to the financing, and the Company continues to negotiate the terms of the financing. Any debt or equity financing undertaken by the Company will be subject to Board approval, and among other things, receipt of all requisite regulatory approvals, including that of the TSX Venture Exchange.

As some of the stakeholders of the Company have expressed concerns, or do not fully understand the rationale behind the proposed share consolidation ("Share Consolidation"), the Company wishes to again clarify its position. The Company is requesting that shareholders approve, at its annual and special meeting scheduled for January 11, 2012, a proposed consolidation of its common shares ("Common Shares") on the basis of one new share for every 10 existing shares. If the Share Consolidation is approved, the Board will have the discretion to implement (or revoke) the Share Consolidation when it deems it to be in the best interests of the Company to do so, at any time prior to the next annual shareholders meeting of the Company. The ratio of the consolidation may, at the Board's discretion be less than one new share for every 10 existing shares, based on the dilution, if any, that results from the financing. In any event, the share consolidation would only be implemented on the basis that the proposed financing is completed on similar terms and subject to the board's consideration of the overall impact on dilution to the Company's stakeholders.

"Having made a significant personal equity investment in YANGAROO when I joined and having a significant element of my compensation tied to the YANGAROO stock through stock options, I am very sensitive to the concerns around a share consolidation. Our board of directors, other members of the executive team as well as our employees all have a component of their compensation tied to stock options, all of which will be affected by any share consolidation as if it were common equity. As such, we believe that our interests are very aligned with those of the common shareholder. Therefore, we will only employ a share consolidation if and when it is in the best interests of the majority of YANGAROO shareholders," said Scott Wambolt, President and CEO, YANGAROO Inc. "We are coming off what looks like a record year for the company in terms of operating performance and we see another strong year in 2012. We need to stay focused on our operating strategy and on our financial re-structuring so we are in a position to maximize the value to shareholders of what we see as a potentially very profitable enterprise. The share consolidation approval is a tool that we would like to have at our disposal." 

Updated meeting materials have now been sent to shareholders which provide further information on the proposed Share Consolidation, which remains subject to shareholder and regulatory approval, including that of the TSX Venture Exchange.

About YANGAROO:

YANGAROO's patented Digital Media Distribution System (DMDS) is a leading secure B2B digital delivery solution for the music and advertising industries. DMDS replaces the physical distribution of audio and video content for music, music videos, and advertising to television, radio, media, retailers, and other authorized recipients with more accountable, effective, and far less costly digital delivery of broadcast quality media via the Internet. The DMDS Awards platform powers many of North America's major awards shows.

Named one of Canada's Top 100 Tech Companies by Canadian Business, YANGAROO has offices in Toronto, New York, Los Angeles, and Dallas. YANGAROO trades on the TSX Venture Exchange (TSX-V) under the symbol YOO and in the U.S. under OTCBB: YOOIF.

The statements contained in this release that are not purely historical are forward-looking statements and are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

SOURCE YANGAROO Inc.

For further information:

Scott Wambolt at 416-534-0607 ext.111 or visit www.yangaroo.com

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YANGAROO Inc.

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