Zaio Corporation

Zaio Corporation

June 20, 2011 10:00 ET

Zaio Corporation Raises More Than $5 Million from Oversubscribed Private Placement

CALGARY, ALBERTA--(Marketwire - June 20, 2011) -


Zaio Corporation (CNSX:ZAO) ("Zaio" or the "Company") announced today that it has closed the previously announced private placement of secured redeemable convertible debentures (each, a "Debenture") and raised gross proceeds of $5.036 million (the "Offering"). This private placement of Debentures replaces the two previous debentures the Company had issued in October 2010 and February 2011 respectively. Those earlier debentures have either been paid out in full or exchanged for this new Debenture.

"The completion of this financing transaction, along with our listing on the Canadian National Stock Exchange opens a new chapter for Zaio and its shareholders" said David King, Zaio's President and CEO. "I am particularly pleased that strong interest in the Company from Canadian retail and institutional investors allowed us to raise approximately $4.0 million of new capital which is well above the initial $2.5 million we were looking to raise in March 2011. This new capital provides Zaio with the financial resources the Company needs to accelerate its plans to build and maintain the most comprehensive database of residential property appraisals in the United States and to market Zaio's products from this platform."

Each Debenture (plus any accrued interest and unpaid interest) is convertible into units (each a "Unit") of the Company at a price of $0.05 per Unit at any time prior to maturity (being June 15, 2013) or redemption. Each Unit will consist of one common share ("Common Share") of the Company and one Common Share purchase warrant ("Warrant"). Each whole Warrant will be exercisable to acquire one Common Share of the Company at a price of $0.05 per Common Share for a period of 24 months from the date of issuance of the Warrants.

The Debentures will accrue interest at a rate of 10% per annum payable quarterly in cash or Common Shares, at the option of the holder. 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. The Debentures have been secured against all of the Company's property, assets and patents and will be registered in all of the jurisdictions in which the Company carries on business.

MGI Securities Inc. (the "Agent") acted as lead agent for the Offering. The Agent received $316,320 in aggregate commissions, financial advisory fees and work fees. In addition, 6,326,400 Broker Warrants were issued to the Agent and its sub-agents. Each Broker Warrant is exercisable into an Agent Unit for a period of 24 months at a price of $0.05 per Unit. Each 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 $0.05 per Common Share for a period of 24 months from the date of issuance of the Warrants.

About Zaio

Zaio provides customers in the property valuation, underwriting and lending industries with real-time access to certified appraisal reports from the Company's proprietary 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.

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Reader Advisory

This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any state in the United States or any other jurisdiction outside Canada in which such offer, solicitation or sale would be unlawful. The securities of the Company will not be registered under the United States Securities Act of 1933, as amended (the "US Securities Act") or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons expect in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

This news release contains forward-looking statements which may include financial and business prospects, as well as statements regarding the Company's future plans, objectives or economic performance and financial outlooks. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurance that such expectations will prove to be correct.

Results of the Company, including its ability to implement its business plan, may be affected by a variety of variables and risks associated with capital markets, the real estate industry and the overall economy in both Canada and the United States, such as, the inability to obtain subscriptions on the terms proposed, loss of market, competition, ability to access sufficient debt and equity capital from internal and external sources, ability to expand on the marketplace, anticipated capital expenditures and financing thereof, timing of applications and approvals as well as risks and variables associated in general with the Company's industry. As such the future plans and objectives of the Company are forward-looking statements that involve risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in such statements. The Company has, in part, relied on information provided to it by its potential customers and industry partners, as well as reports and forecasts provided by third parties involved in the capital markets and the Company's own industry and by the Company's own assessment of the market for its products and services in order to develop its forward-looking statements and there is no assurance that the assumptions, forecasts or information relied upon by the Company are correct, or will not be affected by events or circumstances beyond the control of the Company.

The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. Unless otherwise required by applicable securities laws, the Company does not intend nor does it undertake any obligation to update or review any forward-looking statements to reflect subsequent information, events, results or circumstances or otherwise.

Neither Canadian National Stock Exchange ("CNSX") nor its Regulation Services Provider nor the CNSX accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Zaio Corporation
    David King
    President & CEO
    (877) 318 0537

    Genoa Management Ltd.
    John Sadler
    (416) 594 9292