YANGAROO Inc. (YOO) Earnings Call Transcript & Summary

Okay. Thank you. So all the folks who are on the call. Welcome to the Annual General Meeting of the shareholders of common shares of Yangaroo Inc. My name is Anthony Miller, and I am the Chair of the Board of Directors of Yangaroo and I will act as the Chair of this meeting. I will ask Antonina Szaszkiewicz of the ECS Law Professional Corporation, and Legal Counsel for the company, to act as Secretary of the meeting and Louise Waltenbury of Computershare Trust Company of Canada to act as scrutineer to report on the shareholders present in person, in this case, of course, meaning by telephone and the number of shares represented in person again by telephone and by proxy, and to complete the votes on any poll taken. I have a form of proxy for this meeting, and I ask that the notice of the annual and special meeting and management information circular dated May 10 of this year, together with all of appendices thereto and the form of proxy be kept with the records of this meeting. I will now call upon the scrutineers to present their report to confirm whether a quorum has been met in order to proceed with the meeting as regularly constituted.

Mr. Chairman, we have 2 shareholders in person, [ 21 ] shareholders representing by proxy, totaling 29,407,427 shares, which represents 47.29% of the issued and outstanding.

Thank you for that report. The scrutineer's report clearly shows a quorum to be present, and I therefore declare this meeting to be regularly constituted, and I direct the scrutineer's report be annexed to the meeting -- minutes of the meeting. Before commencing the business of the meeting, [ a ] comment on voting procedures. We have called the Annual General Meeting for the purpose of electing 4 directors of Yangaroo for the ensuing year, appointing auditors for Yangaroo for the ensuing year, reapproving the amended and restated shareholder rights plan and approving an amended omnibus equity incentive plan, each as more particularly described in the management information circular dated May 10 of this year. Ballots voted by our registered shareholders put into this meeting [ each ] on every matter brought before the shareholder during the meeting will be voted on by the equivalent of hands. [ Meeting ] is by telephone, a show of hands will be effected as follows. With respect to each resolution to be considered today, when I ask shareholders to state their agreement or opposition by saying yea or nay, you'll be asked to press *1 for yea or *2 for nay. There is then going to be a short pause to allow for your yea or nay votes to be calculated. Following the formal portion of the meeting, we will hold a short question-and-answer period. Shareholders with questions may press * 1 and prompted to get a queue for this purpose. Now since shareholders will be able to vote by way of a show of hands, again by pressing *1 or * 2, however, we will not be able to speak during the formal portion of the meeting. We will therefore pause for a short period before voting to give shareholders to speak with respect to today's matters to be voted upon. Again, press *1 now, if you have a question or comment, or wait until the formal portion of the meeting, but cannot wait until the question-and-answer period following the conclusion of the voting and formal portion of the meeting. Okay. There appear to be no questions. So I'll now ask for a motion that the reading of the minutes of the Annual General Meeting of the shareholders held on June 29, 2021, be dispensed with and that the minutes be taken as written and approved. Do I have a motion, please.

I move that the reading of the minutes of the previous meeting of the shareholders held on June 11, 2020, be dispensed with and that such minutes be taken as written and approved.

I second the motion.

Thank you, gentlemen. Will all in favor, please signify their agreement by pressing * 1 for yea or signify their opposition by pressing *2 for nay. [Voting] Thank you. I declare the motion has been carried. The next item of business is the presentation of the company's financial statements and the auditor's report therein for the year ended December 31, 2021. I would suggest that matters arising related to such financial statements be held in abeyance for the question-and-answer period, which will occur later. The terms of office of the current directors [ are seen ] to have expired today. The Notice of Meeting and management information circular dated May 10 of this year contains the names of persons opposed -- sorry, proposed to be directors of Yangaroo, which are Grant Schuetrumpf, Anthony Miller, Philip Benson and H. Shepard Boone. I now declare the meeting open for nominations.

I nominate Grant Schuetrumpf as Director of Yangaroo for the ensuing year or until a successor is elected or appointed.

I second the nomination.

Thank you, gentlemen. Will all in favor, please signify their agreement again by pressing * 1 for yea or signify their opposition pressing * 2 for nay. [Voting] Thank you. I declare that Grant Schuetrumpf has received the requisite number of votes cast at the meeting by proxy or in person for election to the ensuing year.

I would like to nominate Anthony Miller as the Director of Yangaroo for the ensuing year until a successor is elected or appointed.

I second the nomination.

Thank you, gentlemen. Will all in favor, please again signify their agreement by pressing *1 for yea or opposition by pressing *2 for nay. [Voting] Thank you. I can declare Anthony Miller has received the requisite number of votes cast at the meeting by proxy or in person for election for the ensuing year.

I would like to nominate Philip Benson as a Director of Yangaroo for the ensuing year or until a successor is elected or appointed.

Thank you. It's my pleasure to second the nomination. All in favor, again signify their agreement by pressing *1 for yea or signify opposition by pressing *2 for nay. [Voting] Excellent. I'm pleased to declare Philip Benson has received the requisite number of votes cast at the meeting by proxy or in person for election for the ensuing year.

I nominate H. Shepard Boone as Director of Yangaroo for the ensuing year or until his successor is elected or appointed.

And again, it's my pleasure to second the nomination. Would all in favor, please signify their agreement by pressing *1 for yea or opposition *2 for nay. [Voting] Thank you. Thanks. I now declare H. Shepard Boone has received the requisite number of votes cast at the meeting by proxy or in person for election for the ensuing year. So the 4 individuals elected to the Board of Directors will hold office until the next Annual Meeting of the Shareholders of Yangaroo unless the office is earlier vacated in accordance with the bylaws of the company or the Business Corporation Act of Ontario. So the next item of business this afternoon is the appointment of Yangaroo's auditor for the ensuing year, along with the remuneration to be paid to the auditor. I'll entertain a motion to appoint the auditors of the company.

I move that Baker Tilly LLP, be appointed auditors of the corporation to hold office until the close of the next Annual Meeting of Shareholders at such remuneration as may be fixed by the directors, and that directors be hereby authorized to fix such remuneration.

I second the motion.

Thank you. Will all in favor, please signify agreement again by pressing *1 for yea, opposition *2 for nay. [Voting] Excellent. I declare the motion has been carried. So the next item of business is the consideration of a resolution to reapprove the amended and restated shareholder rights plan. May I have a motion, please?

I move that a resolution be made as follows: be it resolved that the Yangaroo amended and restated shareholder rights plan as described in the information circular of the corporation dated May 10, 2022, be and is hereby ratified and approved.

I second the motion.

Again, will all in favor please signify agreement by pressing *1 for yea, opposition *2 for nay. [Voting] Excellent. I declare that the motion has been carried. So the next item of business is the consideration of a resolution that [ seek of ] shareholders to approve the proposed 2022 amended omnibus incentive plan.

I move that a resolution be made as follows: be it resolved that the amended and restated 2022 Omnibus Incentive Plan as described in the information circular of the corporation dated May 10, 2022, be and is hereby ratified and approved, and any director or officer of the corporation is authorized and directed to do all things and to execute and deliver or to cause to be executed and delivered any documents considered to be necessary or desirable in such director's or officer's sole discretion to give effect to these resolutions.

I second the motion.

Thank you, gentlemen. Will all in favor, again, please signify agreement by pressing *1 for yea, opposition *2 for nay. [Voting] Thank you. I'm pleased to advise that, that motion has been carried. So unless there's any other business to be brought before this meeting, this concludes the business of the Annual General and Special Meeting. Is there any other business to be brought forward? It would appear not. So if there is no further business, I'd request a motion to terminate the meeting.

I move that the meeting be terminated.

I second the motion.

Again, thank you. Press your agreement, *1 for yea, opposition *2 for nay. [Voting] Okay, the motion has been approved. Thank you. Meeting is now officially terminated, and we will now switch to management's discussion led by Chief Executive Grant Schuetrumpf and questions and answers from the appropriate interested parties. So I'll pass the meeting over to Grant. Thank you, Grant.

Great. Thanks, Tony, and hello, everyone. Welcome to the Yangaroo's AGM. I'd like to now give an update from the management perspective. In speaking today, it will be myself, Dom and also Rich, the management team, the executive team that will give you a quick overview of the business and where we stand today. Post that, we will open up to some questions and answers. So let's start off with our Yangaroo vision. As we state, our vision is always to be a modern content media marketing solution, driving collaboration, delivery, promotion and performance across the advertising, music and entertainment markets. To meet that vision, we have a mission. And our mission is to provide a self-serve platform of choice driving seamless communication to improve marketing decisions. This includes bringing business-to-business secure workflow management, real-time collaboration, content delivery and promotion and analytics, all within the cloud and made accessible across organizations in their supply chain. So the markets that we work within and provide our platforms to is through 3 vehicles. The first one is advertising, where we provide the highest quality audio and video files to broadcasters across North America and also extending out through South America and now entering into the U.K. and the Ireland market. We also provide a platform for the music industry. We're the industry's largest North American network for promotional opportunities for independent artists, also connecting major record labels in order to upload their music and to promote that to radio broadcasters. And the third platform is to the award industry, where we provide an industry platform of choice for managing award submission, nominations and also judging. And it's through those 3 platforms in the markets that we enter into that drives our business growth. The growth opportunities and the strategy that we undertake at the moment is broken down into those 3 categories. So let's start off with advertising. As everyone knows that Yangaroo's current business and foundation is always about delivery. And we work hard in allowing advertisers to upload their material, present their orders or their media schedules, and we'll deliver that material out to the TV broadcasters and also the radio broadcasters. And we're also extending now out to other markets such as CTV and also digital platforms that serve video. So we're now moving beyond just linear delivery, and we're now playing and entering into the digital space. So in order to do that, we extend our business into providing additional services beyond delivery. And what have we done of late in the last year to actually start to encompass and provide a solution to market that enhances our ability and our proposition of just delivering -- of just delivery services? The first initiative we undertook was releasing a TV legal clearance platform. And that directly connects the [ net TV ] networks for advertising submissions and substantiations of creative. And that is a process that is before and is prior to actual delivery of the final TV commercial. It's an important process and is a requirement for a lot of advertisers to seek that legal clearance so they can actually provide and present creative to an audience that works within the legal constraints of airtime. And that is playing against TV shows, such as kids programming, also alcohol and pharmaceutical advertising that is presented out in the market. So it's an important process. It's a big initiative and we've been really excited about getting that to market. It is in market now. We have customers now starting to use the clearance platform, and it is interconnected to delivery. So we enhance our delivery capability both by providing clearance as an important step within their advertising process. The second initiative that we undertook this year was releasing an analytic solution and [ whereas ] analytics is enhancing our deliveries by watermarking and tracking TV advertising airtimes, we're now connecting audience measurement against both [ bad ads on ] tracking. We're also connecting average market [ buys ] to inform the advertiser how well they are performing based on their market [ buys ]. Now this is all presented in the dashboard, and we also enhance that by providing the common sense and accurate reporting downloads. The uniqueness about this analytics solution is that it is presenting live updates. And what we see in live updates is that as a first, we are presenting live updates to people's air time every 24 hours and how their performance of that advertising, how it's airing. It is significant being out in the market, typically for reporting to come through normal analytics companies today may take up to 2 to 3 weeks. So this life fast-forward is actually providing an ability for the advertiser to see how well their schedule is performing and how their advertising is performing and makes them make more important decisions upfront, it gives them the ability to change their creative or even change their media schedule [ if required ]. That plays also out in the general advertising market and just as importantly in the direct response market, which has high volatility of advertising turnaround and ad changes. So we're really presenting a great solution there to once again enhance our existing delivery capability. The third initiative that we undertook was just announcing a strategic alliance for Clearcast. Clearcast is owned by the 4 largest broadcasters in the United Kingdom: ICV, Channel 4, Sky and also Comcast. These platforms, or this alliance allows Clearcast to interconnect with Yangaroo and to be able to extend our delivery capability across North America, U.K. and now Ireland. It bypasses traditional gatekeepers, and it is now a true third player entering the U.K. market. So this Clearcast alliance with ourselves means that we're able to offer international advertisers a streamlined capability of delivering our advertising across market. And we haven't stopped there. We're now moving together beyond those markets now further into -- more into all international markets. So we're excited about this opportunity and where it's leading to and what our presentation is now for the largest of advertisers. Now FreeCast also not only offer delivery capability, but they're also the central body for clearance. So we are now interconnected for providing clearance submissions to those markets that I've just announced. So we're excited by that. Let's move across to music. Music, we've done 2 initiatives that we feel that we're moving forward in the music industry. And the first one is that we've refined our user experience for artists and broadcasters. We've refined workflows. We've been introducing feature sets. We've actually really enhanced the user experience for an independent artist to be able to access their platform, submit their content and promote that content by genre out to 16,000-plus radio broadcasters. We make it easy, convenient and we've even enhanced and made simpler our pricing plans in order to enhance -- to offer a better experience for those artists. In addition to that, we've done a partnership with ShineX. This is an important integration because ShineX do auditing of digital music across SiriusXM. The interconnectivity that we've actually -- we've done between the platforms is now sharing that data for royalty payments for our customers that promote music across that digital platform. So what you can see now is traditionally music working in our typical market is working in the traditional radio broadcasters is now we're actually expanding and now working towards anticipating and driving relevancy of Yangaroo into the digital space. The final component in our growth strategy is working with -- is the awards division. And with the awards division, we really keep working hard on redesigning our technology. We're redesigning that technology to be as efficient as possible, and that's by reducing administration deployment time and effort and significant reduction of the admin time and effort by putting in new technology to improve our scalability. So it means that with the current awards contracts that we have, we're opening up our technology to be able to offer that to a much larger audience in the future and really are offering an awards experience using Yangaroo in other markets other than just entertainment. The internal focus of that growth strategy means that one, as I noted, we're investing in our technology. We're focusing on achieving critical goals across the advertising, awards and music platforms. That continual investment is significant, and it is also critically important to the future of Yangaroo. Secondly, we also invest in our people. We've built a strong team. We are providing market-competitive packages to our employment -- through our employment arrangements. And also with enhanced incentive planning and sharing through the share issuances through the Omnibus plan and also goal-orientated bonuses. So what we're doing is we're attracting greater talent into the business so we can ensure that skill and experience is meeting our clear objectives. In addition to that, we're also changing our selling strategy. And that sales strategy is we usually sell a service-orientated line of business. You look at advertising, we usually present a delivery service and we go and pitch that delivery service. Today, we've now moved into solution selling. And that solution selling is providing us and Yangaroo with opportunities that it hasn't experienced before. That is an introduction into being invited to RFPs with greater -- with much larger and recognized organizations and brands. And we're also now pitching to the Fortune 100 brands that are out in the market. Something that we haven't been able to experience before based on the limitation of the services that we've provided in the business. The initiatives that we've now presented in the last year has closed the competitive gap and now has got us at the table and presenting us our proposal to much larger organizations in the market. As an external focus on this business and the growth strategy, we continue to invest in our customer pipeline to develop our organic growth. We're expanding services, reducing the competitive gap as I mentioned. We're attending conferences, making our presence known. We're even getting involved in the education of the industry by participating in industry panels and events. We're also improving -- continually improving our marketing, rebuilding a relevant and contemporary brand and deploying our digital marketing experience to reach a broader audience. And all along with that we're continually looking for other technology integrations to enhance the user -- our relevancy with the advertisers and the independent artists and also with our awards customers. So in addition to that, and finally, we are continuing to seek nonorganic growth acquisitions, and we're doing that through strategic discipline through our strategic disciplined approach. Okay. I'd like to now hand over to Dom Kizek to give you or present the financial highlights.

Thanks, Chris. I remind everybody that the substance and the detailed financial results are in our Q1 2022 and our annual financial statements, which are on our website and also on SEDAR. This will just be a very brief highlight of our 2021 financials and as well as Q1 '22 trends and highlights. Revenue for 2021 was approximately $7.7 million versus $5.9 million in 2020, representing fairly significant top line revenue growth, primarily attributed to the DMS acquisition, which we closed last year in May 21, 2021. Music was relatively flat year-over-year, approximately $1.4 million in 2021 versus $1.4 million in 2020. And finally, on our awards side of the business, which was also relatively flat, approximately $1.2 million in revenue in 2021 versus $1.2 million in 2020. And I'll just remind everybody that I am referring to U.S. dollars here. We did do the U.S. dollar conversion in Q1 of 2022. So on a go-forward basis, all of our documents will be presented and referenced to U.S. dollars. In respect to 2022, some of the key highlights: revenue of $2 million and EBITDA loss of $260,000. And what we really wanted to touch base on here is we did notice a slump in our revenue, and specifically on our advertising front related to volumes going through our platform, primarily due to macroeconomic conditions. Some of these macroeconomic conditions were inflationary and supply chain conditions as well as potential recessionary conditions, which are making marketers and advertisers which is impacting our volumes going through our platform. So we did see that at the end of Q4 and into Q1, which is a primary factor resulting in the EBITDA loss of $260,000 for Q1. However, the commitments remain unchanged. We continue to realize efficiencies, and we continue to invest money into our technology updates, and we continue to do that through 2022 into 2023. In terms of a quick DMS update, we did complete the integration and realization of synergies in Q1, and we expect to have significant savings into 2022 and beyond. Furthermore, as a result of the Q1 volumes, which were impacted our loss, we did have a head count reduction earlier in Q2, approximately 10% of our staff. That is also further expected to reduce the losses on our P&L. And then finally, as you may all may have read, we did have a term loan covenant violation. We did receive a waiver from our partner, our financial lender the bank. And we are working towards a potential restructure or amendment of that term facility, and we can expect to have more information out in Q3 towards the end of the summer potential. Next, I will give it up to Rich to give us a technology update.

Great, thanks, Dom. So I'm just going to give a quick overview of some of the items that Grant had touched on earlier. But on the advertising side of the business, we have extended our functionality to work both in front of and after our delivery that we have already serviced. First off, on the TV legal clearance platform. We recently launched that, and now it is fully functional and operational with a number of different customers, and we continue to make expansive updates to that as well, including AI integrations and some further advancements. On the analytics platform, we have occurrence audience and cost analysis metrics that are being integrated, and we're working on automation for making further efficiencies as our team processes that incoming data. We've made expansive integrations on the CTG and digital side of things, working on things like [ fast-tanking ] and ad server integrations as well as various different reporting integrations that complement the analytics platform. And we've also worked with integrations with various different digital asset management and talent management system to further complete the suite of services offered on the advertising side. In the back of house, we've continued to work on automation and improvements for our post-production tagging and version workflows, again, just with the idea of rationalization and really making it fast and easy for our staff to work. On the music side, I would say we continue to offer premium tools. We've enhanced our library experience for broadcasters and also are just about to launch a complete reimagining of the create-release process for artists and record labels. We have also recently updated the notifications and the analytics associated with those notifications. So new modern look with addressing a number of the different security and privacy consents that are associated with email marketing. And finally, we are just about to work on an integration with regards to our DSP, which will give us further reach into some of our digital partners and expand out for both music and music video promotion. On the awards side, as Grant had mentioned earlier, we are working on what we call V3, which dramatically improves the security usability and scalability of our platform. We're really focused on making it low touch from a development perspective. I would say one of the advantages and disadvantages of our old system was that it was highly customized. As a result, as I'm sure you recognize, we have long-term dedicated customers that we work with because we have deeply integrated ourselves into their workforce. That said, there is a large base of customers that are interested in having a platform available to them that has the same level of security, but maybe doesn't need that same high level of touch and workflow integration. And so this platform gives us the opportunity to service both existing customers and new customers with an improved efficiency and better administrative tools. So we're expecting opportunities to expand into new markets within the rest of the year. I would now like to turn it back over to Grant for some closing thoughts and comments.

Okay. Thanks, Rich and Dom. That concludes the management update. We have obviously a lot of work to do. And as you -- as we reported, we -- the macroeconomic conditions, we are managing through. And we are addressing as a business as we move forward and working as hard as we can to actually meet the business's objectives. And that's -- we're hoping as we get through this year, we will be able to provide some more exciting updates as we move forward. I'd like to now open up to the -- to some questions and answers. Okay. Yes. Okay. So if there are any questions, I'd like to remind everyone that you can press *1. And if that's not -- if there are no questions in queue, then we can formally close this meeting. Okay. There are no questions in queue. So I'd like to thank everyone for attendance today at Yangaroo's AGM. Thank you very much for your time.

Thank you.