Zaio Corporation Announces Acceptance of Early Surrender of ZDS Warrants and Proposes to Automatically Convert Debentures into Common Shares

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:

  1. payment, of 10,833 Common Shares for each $1,000 Debenture (or integral multiple thereof) automatically converted;

  2. conversion into Common Shares only instead of units comprised of Common Shares and warrants; and

  3. 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

For further information: visit www.zaio.com or contact: Shane Copeland, CEO, Zaio Corporation, 760-208-6460, scopeland@zaio.com; Phil Wazonek, President & COO, Zaio Corporation, 403-819-5449, phil.wazonek@zaio.com; Babak Pedram, Investor Relations, Virtus Advisory Group Inc., 416-644-5081, bpedram@virtusadvisory.com

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http://www.zaio.com

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