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CALGARY, Jan. 2, 2014 /CNW/ - Zaio Corporation (TSX-V: ZAO) ("Zaio" or the "Company") today announced that at a meeting held on December 31, 2013, debentureholders holding a total of over $3.8 million out of a possible total of $7.36 million had voted by proxy or in person in favour of the Extraordinary Resolution (as defined in the Trust Indenture). This vote amends the Trust Indenture to provide for a one time only "make whole amount payment" pursuant to which debentureholders who elect to convert their debentures into units of the Company. Each unit consists of a common share in the capital of the Company and a common share purchase warrant, and who immediately thereupon exercise such warrants, will receive common shares in the capital of the Company in exchange for the foregone interest on the debentures. The number of common shares will be determined in accordance with a formula more particularly described in the management information circular provided to debentureholders in connection with the meeting.
"We are pleased with the large voter turnout, with every vote cast in favour of our proposal," said David King, President and CEO of Zaio Corporation. "It is encouraging to see overwhelming support from our debentureholders and their focus on the future of our Company. As a result of this election, we will be in a stronger cash position and with reduced long term debt, which gives us a stable foundation to grow our business. Additionally, with a portfolio of products and significant territory expansions underway, we believe we are in an advantageous position to further expand our market presence in the U.S."
As a result of the foregoing, the Company and the debenture trustee, Olympia Trust Company, have signed a supplemental indenture giving effect to the Extraordinary Resolution which was approved at the meeting. A copy of the Supplemental Indenture will be filed under the Company's profile on SEDAR at www.sedar.com. The issuance of the shares in the capital of the Company pursuant to the "make whole amount payment" remains subject to approval of the TSX Venture Exchange.
The Company also reports today that it has entered into an agreement for the fourth tranche of a subordinated secured bridge loan (the "Bridge Loan") in the principal amount of approximately $800,707 for an aggregate principal amount of $1,480,707. The principal amount of the Bridge Loan has been increased to 1,500,000 and is for a term ending March 31, 2014. The Company will pay interest on the Bridge Loan at a rate of 1% per month payable at maturity. The Company will also pay a commitment fee to the lenders equal to 5% of the principal amount of the Bridge Loan. The Bridge Loan is secured against the all of the assets of the Company and subordinated to all senior indebtedness including the Company's convertible debenture. The proceeds of the Bridge Loan will be used for working capital and general corporate purposes.
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.
Neither the 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.
This press release contains forward-looking statements within the meaning of applicable securities laws, including expectations regarding the early redemption of the Debentures, the use of proceeds from such early redemption and conversion of the Warrants and the financial impact of same on the Company. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. These risks include, but are not limited to: the risks associated with the industry in which the Company operates (e.g. operational risks; delays or changes in plans with respect to planned projects or capital expenditures relating thereto; the uncertainty of estimates and projections relating to the Company's operations as well as the costs and expenses relating to servicing the interest payments of the Debentures), uncertainties resulting from potential delays or changes in plans with respect to planned projects or capital expenditures and uncertainties regarding whether regulatory approval for the early conversion described above will be received and if received, on the timelines expected, as well as the intended use of the proceeds of the early redemption. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
SOURCE: Zaio Corporation
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