Zaio Announces Acquisition of Axis Appraisal Management Solutions

CALGARY, July 23, 2014 /CNW/ - Zaio Corporation (TSX-V:ZAO), ("Zaio" or "the Company"), is pleased to announce that, as the result of a successful due diligence process, it has entered into a definitive agreement to acquire 100% of Axis Appraisal Management Solutions Inc. ("Axis") with Axis and shareholders holding 97% of the issued share capital of Axis. Zaio and Axis expect that the remaining shareholders will sign the definitive agreement by the end of the week, however, in any event the shares of any minority dissenting shareholders will be acquired pursuant to the dissent procedures under applicable legislation.

The total price of the acquisition in cash and stock is expected to be approximately $11.25 million comprised of US$2.25 million in cash and stock equal to not less than 14% of Zaio's issued and outstanding share capital as at closing date. The Company had previously announced that it had entered into a letter of intent agreement with Axis on March 3, 2014.

Upon closing of the acquisition, Axis principals Kim Perotti and Michael Simmons have agreed to join the Zaio team through five (5) year employment agreements pursuant to which they will receive $500 thousand cash signing bonuses and 1 million stock options at the then market price of Zaio's common shares vesting in equal parts over three years. Both principals will become significant Zaio shareholders as the result of this transaction. The acquisition of Axis is expected to be completed in the 4^th quarter of the current fiscal year, following the completion of a financial audit. Axis is required to have its financial statements audited as part of the transaction and in order to meet regulatory requirements. The transaction is also subject to receipt of all applicable regulatory approvals, including approval by the TSX Venture Exchange.

"We are pleased to formally join forces with Axis, one of the top national appraisal management companies in the United States," said David King, President and CEO of Zaio Corporation. "Axis' client and appraiser relationships powered by Zaio's technology, empower appraisers to be more productive, but more importantly, more accurate with their appraisals. Axis clients can also take advantage of Zaio's GeoScore powered GEAR appraisal reports for highly accurate and cost effective delivery for their appraisal needs."

"Zaio and Axis are very complementary to each other," said Kim Perotti, Executive Vice President of Axis. "The depth of experience the combined management bring to the table, supported by operations in San Rafael, CA and Tempe, AZ ensures that we are well prepared for the increased volume we are receiving and the broad product arrays that we are offering both new and existing clients."

Michael Simmons, Chief Business Development Officer of Axis added, "The exciting and expansive product line offered by Axis and Zaio together is being embraced by new and existing clients. We are excited to be a part of the Zaio group of companies, and to be leveraging their unique technology that is unmatched in the industry."

Upon closing of this acquisition, Axis would become a subsidiary of Zaio and continue to function as it has, but with greater resources, technology and systems to support its base of appraisers and clients. The net result is a nationwide network of over 5,000 appraisers, 75,000 realtors, and highly skilled and knowledgeable staff and management, all powered by proprietary technology from Zaio and Valuation Vision. The companies will operate out of San Rafael, CA, Tempe, AZ, and Carlsbad, CA, with additional sales personnel and staff in Texas, Illinois, Ohio and New York, representing a truly national entity.

Zaio also announces that further to its announcement on July 3, 2013, it has issued 1,322,890 common shares to debentureholders in consideration of June 30, 2014 interest payments in the amount $265,900 pursuant to the terms of the debentures issued under the trust indenture dated May 9, 2013. The conversion price per share for the June 30, 2014 interest payment was $0.201, determined based on the greater of the 20 day weighted average trading price of Zaio's shares prior to June 30, 2014 and closing market price of Zaio's shares on last trading day prior to the interest payment date.

Holders of approximately 98 percent of the outstanding debentures have agreed to take shares as their form of interest payment for this semi-annual interest payment date.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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. Visit the company online at zaio.com.

About Axis Appraisal Management Solutions

Axis is a privately held S Corp and a leading national appraisal management company. It serves regional and national bankers, credit unions, attorneys, and home owners with a highly qualified team of certified appraisers and experienced quality control appraisers and account managers with regional focus.

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.

Forward-Looking Information

This press release contains forward-looking statements as it relates to anticipated events and strategies. When used in this context, words such as will, anticipate, believe, plan, mandated, intend, target, and expect or similar words suggest future outcomes.

Forward-looking information in this press release, includes, among other things, information relating to: (i) completion of the transactions contemplated by the definitive agreement to acquire Axis and the timing thereof; (ii) the audit of Axis; and (iii) the principals of Axis joining Zaio.

These statements are based on certain assumptions and analyses made by the Company in light of its experience, current conditions and expected future developments and other factors it believes are appropriate. The material factors and assumptions used to develop these forward-looking statements include, but are not limited to: (i) the ability of the Company to finance and close the Axis transaction; (ii) the audit will be completed on a timely basis; (ii) that all conditions to the transaction will be met; and (iii) that all regulatory approvals will be obtained and will not impose any unforeseen conditions on such approval.

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 such forward-looking information. In evaluating forward-looking information readers should consider the risk factors which could cause actual results or events to differ materially from those indicated by such forward-looking statements, including risks that: (i) the transaction does not close or the conditions for closing are not met; (ii) the results of the audit of Axis prevent a close; (iii) the Company is not sufficiently capitalized to close the Axis acquisition; and (iv) that regulatory approval for the Axis transaction is not obtained.

Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Forward-looking statements are provided for the purpose of providing information about management's current expectations, and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Zaio does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in Zaio's expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

SOURCE: Zaio Corporation

visit zaio.com or contact: David King, President & CEO, Zaio Corporation, (403) 984-ZAIO, [email protected]; Babak Pedram, Investor Relations, Virtus Advisory Group Inc., 416-995-8651, [email protected]