Yangaroo plans to issue up to C$2.56 million of 18% debentures

By Angela McDaniels

Tacoma, Wash., June 16 - Yangaroo Inc. plans to issue up to C$2.56 million principal amount of 18% senior secured debentures, according to a company news release.

The company also plans to amend its C$818,000 principal amount of 12% convertible debentures due March 31, 2012 and C$1.13 million principal amount of convertible debentures due July 31, 2012 to reflect the terms of the new debentures, subject to the necessary approval of the debenture holders.

The new and amended debentures would be non-convertible and putable after five years. They would become callable if the company raises at least C$4 million of "net new cash," which would include the proceeds raised from the issuance of the new debentures but would exclude the proceeds from the repayment of any debentures that are used to fund the purchase of new securities of the company.

In the event of an asset sale in excess of C$3 million, the company would be required to offer to repurchase at least 50% of its outstanding debentures at par plus accrued interest.

Debenture holders would also have a right of first refusal to participate in future offerings by the company, subject to the satisfaction of certain conditions.

Under the rules of the TSX Venture Exchange, the company plans to issue up to 13,636,666 "bonus" common shares to purchasers of the new debentures and holders of the amended debentures.

Fraser Mackenzie Ltd. is acting as the agent for this transaction.

Yangaroo is a Toronto-based secure digital media distribution company.

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