ZAIO Corporation - Private Placement

TSX Venture Exchange Symbol: ZAO

CALGARY, Sept. 15 /CNW/ - Zaio Corporation (TSX-V ZAO) ("Zaio" or the "Company") announced today a non-brokered private placement of up to 10,000,000 units (the "Units") at a price of $0.15 per Unit for gross proceeds of approximately $1,500,000 (the "Offering"). Each Unit will consist of one (1) common share in the capital of the Corporation (the "Common Shares") and one half of one common share purchase warrant (a "Warrant"). Each whole Warrant entitles the holder to purchase one Common Share of the Corporation at an exercise price of $0.25 for a period of twelve (12) months from the Closing Date (the "Exercise Period"). At the option of the Corporation, the Exercise Period for the Warrants may be shortened from twelve (12) months to thirty (30) days should the Common Shares trade at a price equal to or greater than $0.50 for five (5) consecutive trading days.

Finders' fees are to be paid to arm's length third parties of Zaio consisting of cash in the aggregate amount of up to 6% of the gross proceeds raised by the finders and finders' compensation warrants (the "Finders' Warrants") in the amount of up to 8% of the number of Common Shares subscribed for through the Finders. The Finders' Warrants shall have the same terms and conditions as the Warrants.

The private placement is expected to close on or about October 30, 2009 (the "Closing Date").

The proceeds of the private placement will be used for working capital as the Zaio Concept is re-introduced to the United States mortgage market. The Company is now proceeding with an agreement pursuant to a letter of intent and term sheet with the majority of the original US Zone Appraisers to implement the world's first appraiser certified national valuation database.

    
    Grant of Options
    ----------------
    

Zaio is also pleased to announce that the Board of Directors have approved the issue of 2,160,000 share options (the "Options"), of which 1,600,000 Options were granted to certain directors and officers of Zaio, at an exercise price of $0.30 per share. The Options will fully vest on September 15, 2011 and expire September 14, 2014.

    
    Shares for Debt
    ---------------
    

In addition, Zaio has reached an agreement (the "Settlement Agreements") for the satisfaction of debts owed to arm's length third parties (the "Creditors") in the aggregate amount of US$363,000. Pursuant to the terms of the Settlement Agreements, Zaio and the Creditors have agreed to convert debt owed by Zaio into common shares of the Company (the "Debt Shares") resulting in the issuance of an aggregate of 2,705,790 Debt Shares at the follow prices per Debt Share:

    
    -------------------------------------------------------------------------
    U.S. Dollar           Canadian Dollar   Price per       Number of Debt
     Debt Amount            Debt Amount    Debt Share    Shares to be Issued
    -------------------------------------------------------------------------
        $75,000              $81,427.50       $0.124             658,000
       $130,000             $141,141.00       $0.140           1,008,150
       $158,000             $171,540.60       $0.165           1,039,640
    -------------------------------------------------------------------------
    

The debts being converted have all been previously accrued and reported on the financial statements of Zaio. Completion of the shares for debt transaction contemplated in the Settlement Agreements is subject to the execution of the legal documentation and receipt of all necessary regulatory approvals.

About Zaio

Zaio develops and maintains a site-verified database of photos, valuations and property information of virtually every property in entire cities, using a proprietary "GeoScore" property rating system. Zaio and its network of premiere, local appraiser experts photograph and appraise entire cities, one building at a time from the street. Zaio is a public Company that trades under the symbol "ZAO" on the TSX Venture Exchange in Canada. Zaio shares are also available in the U.S. under the trading symbol "ZAOFF". For more company information, visit www.zaio.com.

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, and the overall economy in both Canada and the United States. 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 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.
    

SOURCE Zaio Corporation

For further information: For further information: Bradley Stinson, CEO, (877) 318-0537; Rodney Mitton, CFO, (877) 318-0537

Organization Profile

Zaio Corporation

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