Zaio Corporation
TSX VENTURE : ZAO

Zaio Corporation

May 09, 2013 17:00 ET

Zaio Corporation Announces Private Placement

CALGARY, ALBERTA--(Marketwired - May 9, 2013) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Zaio Corporation (TSX VENTURE:ZAO) ("Zaio" or the "Company") announced today that it has completed the initial tranche of its previously announced private placement of secured, redeemable convertible debentures (each, a "Debenture") and raised gross proceeds of $931,000.

Each Debenture is convertible into units (each, a "Unit") of the Company at a price of $0.12 per Unit at any time prior to maturity (being May 9, 2017) or redemption. Each Unit consists of one common share ("Common Share") of the Company and one Common Share purchase warrant ("Warrant"). Each Warrant is exercisable to acquire one Common Share at a price of $0.15 per Common Share for a period of 24 months from the date of issuance of the Warrant. The Debentures will accrue interest at a rate of 10% per annum payable semi-annually in Common Shares or cash, at the option of the holder. Debentures will be secured against all of the Company's property and assets and will be registered in all of the jurisdictions in which the Company carries on business.

The Company may, at any time prior to maturity and upon giving notice, prepay the Debentures in full or in part, by paying the holders thereof the outstanding principal amount plus a 10% premium on the outstanding principal amount as a bonus for early redemption, together with all accrued and unpaid interest. Debenture holders will continue to have the ability to convert their Debentures until the date specified for redemption.

MGI Securities Inc. (the "Agent") acted as lead agent for the private placement. In consideration for its services, the Agent and its sub-agents received an aggregate of $68,080 in commissions and work fees. In addition, the Agent and its sub-agents were issued an aggregate of 620,600 broker warrants, each broker warrant being exercisable to acquire a broker unit at a price of $0.12 per Unit for a period of 48 months from the date of issuance of the broker warrants. Each broker unit will consist of one Common Share of the Company and one Warrant. Each whole Warrant will be exercisable to acquire one Common Share of the Company at a price of $0.15 per Common Share for a period of 24 months from the date of issuance of the Warrants.

All of the securities issued under the private placement are subject to a four month hold period from the date of issuance.

The Agent and the Company are working to complete a second tranche of the private placement which will be announced upon completion.

As previously announced, the Company has filed an application to further amend the terms of its existing 10% secured, redeemable, convertible debentures (the "Existing Debentures") to allow for a conversion of the Existing Debentures into the new Debentures. To become effective and allow for the conversion, the proposed amendment to the Existing Debentures requires approval of the holders of the Existing Debentures by way of Extraordinary Resolution (as defined in the Trust Indenture governing the Existing Debentures) passed at a meeting of the holders of the Existing Debentures.

The Company will prepare a Notice and Information Circular (the "Circular") giving full particulars of the proposed amendments to the Existing Debentures. The Circular together with a form of proxy will be mailed to holders of Existing Debentures within the next 30 days, and will be filed on and accessible under the Company's profile at www.sedar.com.

About Zaio Corporation

Zaio provides customers in the property valuation, underwriting and lending industries with real-time access to certified appraisal reports from the Company's patented database of proactively maintained residential property valuations prepared by licensed appraisers across the United States. The Company's products are available in the United States through its Licensee, Zone Data Systems LLC.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities of the Company will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons except in certain transactions exempt from the registration requirements of the U.S. Securities Act.

This press release contains forward looking statements. The Company believes that the expectations reflected in this news release are reasonable but actual results may be affected by a variety of variables and may be materially different from the results or events predicted in the forward-looking statements. Readers are therefore cautioned not to place undue reliance on these forward-looking statements. In evaluating forward-looking statements readers should consider the risk factors which could cause actual results or events to differ materially from those indicated by such forward-looking statements. These forward-looking statements are made as of the date hereof and unless otherwise required by applicable securities laws, the Company does not intend nor does it undertake any obligation to update or revise any forward-looking statements.

Neither TSXV nor their Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Zaio Corporation
    David King
    President & CEO
    (403) 984-ZAIO
    www.zaio.com