-Zaio Begins to Account for Valuation Vision's Financial Performance-
CALGARY, Feb. 26, 2014 /CNW/ - Zaio Corporation (TSX-V:ZAO), ("Zaio" or "the Company"), is pleased to announce that as a result of receiving audited financial statements of Valuation Vision LLC for the periods of 2011, 2012, and up to June 30, 2013, it has successfully closed in escrow the previously announced acquisition of 60% of privately held Valuation Vision LLC., located in Carlsbad, California. The purchase price for the 60% interest of Valuation Vision is approximately US$1.55 million, payable in two cash instalments over six months. Additionally, Zaio contracted to provide up to US$500,000 in secured short-term working capital loans.
In addition to the previously announced agreement to acquire 60% of Valuation Vision, the Company also announces today that it has simultaneously entered into an agreement to purchase the remaining 40% of Valuation Vision from management in consideration for 8,000,000 common shares of Zaio and also closed this portion of the acquisition in escrow. The terms of the escrow are such that the acquisition of all of Valuation Vision will automatically close two business days after receipt of the annual audited financial statements of Valuation Vision LLC for the period ending December 31, 2013. Closing of these transactions and release from escrow remains subject to approval from the TSX Venture Exchange.
Zaio requested that the Valuation Vision financial statements were prepared to IFRS standards rather than US GAAP standards to match the financial reporting protocols utilized by Zaio, which initially added some time to the audit, but will provide operational and reporting benefits to both companies in the future. The audit to June 30, 2013 was received by the Company without any material issues or adjustments. To meet additional regulatory requirements, Zaio is beginning the process of having Valuation Vision prepare audited IFRS financial statements for the fiscal year ended December 31, 2013.
Under the terms of the definitive agreements, all financial results accrue to Valuation Vision during the escrow period. As the sole shareholder, Zaio will account for the financial performance of Valuation Vision from today's date forward once escrow is released. While full operating plans are being finalized, management's expectations are that an additional $1.0 million of investment to support working capital and technology development will be required into Valuation Vision through 2014.
Valuation Vision's management team will stay with the Company under new employment agreements and in their current capacities. The Valuation Vision management team adds tremendous additional depth and industry experience to the Zaio group. Shane Copeland, CEO; Zan James, COO, Bill Mohler, EVP Product and Marketing, and Ernie Durbin, Chief Valuation Officer bring a well balanced and tenured industry skillset to the operations, development and marketing of the combined Zaio and Valuation Vision product lines. Valuation Vision's offices in Carlsbad, CA provide Zaio with a strong US presence to complement sales staff located in New York, Chicago, Dallas, and California.
"During the month of January 2014, Zaio and Valuation Vision delivered thousands of reports across the United States, generating revenue of over $500,000," said Dave King, President and CEO of Zaio Corporation. "The combination of Valuation Vision and Zaio provides one of the industry's broadest and most complete product lines and a modern and flexible operations platform tuned to serve the massive financial services market in the United States. Valuation Vision's Broker Price Opinion products complement Zaio's Geoscore Evaluation Appraisal Reports that are generated from Zaio's patented database. The development of Zaio's database is on schedule to be completed in the middle of 2014. As the operational integration of the two companies is well underway, the two organizations began cross selling the broad product array in February to asset managers, mortgage originators, banks, and investors and we are forecasting robust growth going forward."
Valuation Vision offers a comprehensive range of detailed and accurate valuation products in all 50 states through its combined network of over 100,000 licensed appraisers and real estate agents.
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.
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.
This press release contains forward looking statements, include release from escrow and formal closing of the acquisition of Valuation Vision, LLC. 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, including risks that the conditions for release from escrow are not met or that regulatory approval is not obtained. 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 TSXV nor their Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Zaio Corporation
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