7th December 2011

Yangaroo Announces Receipt Of Financing Proposal

YANGAROOSecure digital media distribution company YANGAROO Inc. has  announced that it has received a non-binding financing proposal for up to $1,250,000 of debt financing. The Company also wishes to offer shareholders further details and clarification on its proposed share consolidation.

The Letter of Intent received by the Company calls for the arm’s length financing party to lend the Company up to $1,250,000 in two tranches, $750,000 on satisfaction of certain conditions precedent and a further $500,000 at a future date, subject to the satisfaction of certain business milestones. The proposal calls for, among other things, a 14% interest rate and a five-year term.  The conditions precedent for financing require the company to concurrently raise $750,000 in capital, and obtain the approval of the holders of the Company’s existing debentures (all of which are non-convertible) to subordinate their position to the new financing and extend the term of their debenture to correspond with that of the new debt financing. The Company is engaged in discussions with its current debenture holders to amend the terms of their securities to facilitate the financing.  One of the existing debenture holders has indicated that they will contribute an additional $250,000 in this financing. The Company continues to negotiate the terms of the financing and there can be no assurance that it will be completed on terms substantially similar to those described herein or that it will be completed at all. Any debt or equity financing undertaken by the Company will be subject to, among other things, receipt of all requisite regulatory approvals, including that of the TSX Venture Exchange.

As recently announced, 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 on the basis of one new share for every 10 existing shares.  If the Share Consolidation is approved, the Board will have 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.  It is anticipated that the share consolidation would only be implemented on the basis that the financing described in this press release is completed on similar terms.  YANGAROO currently has 131,569,119 Common Shares outstanding. The Company believes that it may be in the best interests of the company to reduce the number of outstanding Common Shares by way of the Share Consolidation. Updated meeting materials will be sent to shareholders shortly providing further information on the proposed Share Consolidation, which remains subject to shareholder and regulatory approval, including that of the TSX Venture Exchange.

This entry was posted on Wednesday, December 7th, 2011 at 8:12 am and is filed under Business News, National News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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