CALGARY, April 22, 2016 /CNW/ - Zaio Corporation
(TSXV: ZAO) (the "Company" or "Zaio") today announced that Zone
Data Systems ("ZDS") and its members have agreed to early
termination of warrants to purchase 13,600,000 of Zaio's common
shares at $0.20 per share, scheduled
to expire on February 4, 2017 (the
"Warrants"). The Company has also agreed to offer ZDS and its
members to subscribe for up to 13,600,000 common shares of Zaio at
CDN $0.11 per share. At scheduled
closing April 28, 2016 Zaio will
issue shares to the ZDS members up to the lesser of a maximum
of 13,600,000 shares and US$1,000,000. The transaction is subject to
Exchange approval.
"The early surrender of ZDS warrants and offer for its members
to subscribe for Zaio's common shares is an example of our
continued goal to drive shareholder value through exploring and
executing on various non-dilutive strategies to raise capital,"
said Phillip Wazonek, President and
COO of Zaio Corporation. "With StableView Asset Management's design
and execution, we are committed to cleaning up our share structure,
reducing our debt obligations and strengthening our balance sheet,
as we continue to grow as a business."
The Company is also pleased to announce that it proposes
automatic conversion (the "Automatic Conversion") of its
outstanding Debentures into only common shares in the capital of
the Company (the "Common Shares") in consideration for the issuance
of 10,833 Common Shares for each $1,000 Debenture that is automatically
converted.
"We strongly believe that the automatic conversion of debentures
into common shares will benefit both the Company and our
debentureholders," continued Mr. Wazonek. "Through the automatic
conversion, our balance sheet will further be strengthened, and
will provide confidence to new clients of our growing Valuation
Vision business, reduce the interest costs all intended to increase
shareholder value through reduced dilution by eliminating the
growth capping warrant overhang. Our goal is to ensure that we have
the balance sheet to accelerate growth."
A meeting of Debentureholders has been called for May 25, 2016, for the purpose of approving the
necessary amendments (the "Amendments") to the indenture governing
the Debentures. The indenture will be amended to provide for:
- payment, of 10,833 Common Shares for each $1,000 Debenture (or integral multiple thereof)
automatically converted;
- conversion into Common Shares only instead of units comprised
of Common Shares and warrants; and
- automatic conversion of the Debentures.
Upon Debentureholder approval, each Debentureholder will be
issued 8,333 Common Shares upon conversion at $0.12 per Common Share and 2,500 Common Shares in
consideration for the Amendments for a total of 10,833 Common
Shares for each $1,000 Debenture or
integral multiple thereof. No further investment of funds
will be required of Debentureholders upon approval of the
Amendments.
StableView Asset Management's Colin
Fisher noted, "With the reduction of December 31, 2015 warrants, early surrender of
ZDS warrants and conversion offer for debentureholders, total
number of outstanding warrants will be reduced by 56,161,900, which
represents a reduction of approximately 75% of total outstanding
warrants, this a win for all stakeholders and drives value for
shareholders through a cleaner & simpler capital structure"
About Zaio Corporation
Zaio Corporation was founded on the simple premise that current
real estate valuation technologies lacked the information and
technology necessary to deal with today's dynamic housing market.
Zaio is disrupting an industry that was once thought not possible
through its proprietary valuation solutions. Every day our
GSE, banking, and investor clients rely on our proprietary
solutions to fund loans and value assets. At Zaio, our mission is
to ensure that our solutions provide businesses and consumers
unparalleled insight into their real estate assets. For more
information, visit www.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 which may
include financial and business prospects, as well as statements
regarding the Company's future plans, objectives or economic
performance and financial outlooks. Such statements are subject to
risk factors associated with the real estate industry, the overall
economy in both Canada and
the United States. Forward-looking
information in this press release, includes, among other things,
information relating to any applicable approvals required in order
to complete the warrant surrender, share subscription and
convertible debenture amendment and automatic conversion, which may
include, but is not limited to, the approval of the TSX Venture
Exchange, approval of the debentureholders and approval by
the shareholders of Zaio. 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.
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)
SOURCE Zaio Corporation