Zaio Corporation Raises $1.4 Million Through Early Conversion of Debentures and Concurrent Exercise of Warrants

CALGARY, Jan. 22, 2014 /CNW/ - Zaio Corporation (TSXV: ZAO) (the "Company") is pleased to announce that in response to the one-time offering to holders (the "Debentureholders") of its 10% secured, redeemable, convertible debentures due May 9, 2017 (the "Debentures") to convert their Debentures into units in the capital of the Company ("Units"), Debentureholders holding approximately $1.13 million of principal amount of Debentures elected to convert their Debentures into 9,441,668 Units (the "Early Conversion"). Each Unit consisted of one common share in the capital of the Company ("Common Share") and one common purchase warrant exercisable into one Common Share at a price of $0.15 per share ("Warrant"). Concurrent with the Early Conversion, Debentureholders exercised 9,441,668 Warrants, providing proceeds of approximately $1,416,250 to the Company. In consideration for the Early Conversion and pursuant to the Trust Indenture governing the Debentures, Debentureholders will be issued an aggregate of 1,701,549 Common Shares of the Company at a deemed price of $0.1898 per share for the "make whole amount payment" to compensate participating Debentureholders for their forgone interest payments between the conversion date (December 31, 2013) and the maturity date of the Debentures (May 9, 2017) in the amount of $322,951.

"We continue to receive strong support from our Debentureholders, demonstrating continued confidence in Zaio's business plan," said David King, President and CEO of Zaio Corporation. "The early conversion of Debentures and exercise of Warrants was a unique offering that occurred during a short time frame at year-end and has reduced Zaio's long term commitment to service the Debenture interest and principle repayments. With the increase in working capital and reduction in total debt, the resulting stronger balance sheet allows the Company to aggressively pursue and deliver revenue growth to create significant short-term and long-term value for our shareholders."

On December 31, 2013, a Debentureholders meeting was held in Calgary, at the offices of Dentons Canada LLP, where Debentureholders who voted at the meeting, holding a total of over $3.8 million of Debentures, voted unanimously in favour of amending the Trust Indenture to provide for the Early Conversion. The number of Common Shares to be issued in consideration for the Early Conversion is determined in accordance with the formula set forth in the Trust Indenture, as amended, and remains subject to approval by the TSX Venture Exchange.

The Company also reports today that it has issued 2,250,301 common shares to Debentureholders in consideration of December 31, 2013 interest payments in the amount $328,541.72 pursuant to the terms of the Debentures issued under the Trust Indentures. The conversion price per share for the December 31, 2013 interest payment was $0.146, determined based on the greater of the 20 day weighted average trading price of Zaio's shares prior to December 31, 2013 and closing market price of Zaio's shares on last trading day prior to the interest payment date.

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.

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.

Forward-Looking Information

This news release contains forward-looking statements including the business prospects and financial outlook of the Company as a result of the conversion of Debentures and foregone interest into shares in the capital of the Company. 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.

SOURCE: Zaio Corporation

For further information visit www.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]