CALGARY, Aug. 31, 2016 /CNW/ - Zaio Corporation
(TSXV: ZAO) (the "Company" or "Zaio") announces the decision by the
Court of Queen's bench Alberta in
the application by a group of convertible debenture holders to set
aside the results of the meeting of convertible debentures held
May 25, 2016. The Court has decided
that the convertible debentures will not be automatically converted
as previously announced (press release dated May 25, 2016). During this process, the Company
preserved the rights of the debenture holders. No damages were
sought in the application.
"The intent of the original offer was to help strengthen the
Company's balance sheet and to give a fair and lucrative offer to
the debenture holders," said Shane
Copeland, CEO of Zaio Corporation. "In light of the outcome
of the court case, Zaio will make an issuer bid to allow those who
voted in favour of the original offer to participate."
The Company also announces that Zaio has arranged a standby
facility to payout any outstanding convertible debentures at a
maturity on May 9, 2017. The standby
facility is for the amount of up to $5,000,000, by way of either direct funding by
Stableview Asset Management or co-investment. Zaio (the "Borrower")
will pay a standby fee of 7% of the standby amount to Stableview
upon drawdown of the facility, satisfied by way of promissory
notes, which in turn may be satisfied by the issuance of common
shares of Zaio at the time of the drawdown at the Discounted Market
Price (as defined in TSX Venture Exchange ("TSXV") policies on the
date or added to the standby facility at the discretion of the
Lender Representative. The standby facility will be utilized for
repayment when due upon maturity of all outstanding, 10% secured,
redeemable convertible debentures, maturing May 9, 2017 and to the extent not required for
repayment of convertible debentures such other purposes, subject to
the Lender Representative's prior approval. The standby facility
will be available in a single drawdown of not less than
$3,000,000 (or at the sole discretion
of the Lender Representative) subject to the satisfaction or waiver
of the drawdown conditions. The Borrower shall pay the Lenders on
the Advance Date a drawdown fee of 20% of the amount of the Standby
Facility drawn down to be added to the principal amount of the
Standby Facility outstanding. The Maturity Date is Three (3) months
from the Advance Date, which may be extended at the option of the
Lenders for further nine (9) months (total one year). The Borrower
will pay interest in the amount of 2% per month (for the
three-month term), calculated and payable monthly in cash in
arrears or at the option of the Lender's Representative in common
shares issued at Discounted Market Price based on five-day volume
weighted average price of the common shares. The interest rate
reduces to 8% per annum collected and payable monthly in the event
the standby facility is extended. The principal amount outstanding
of the Standby Facility shall be convertible at the option of the
Lender Representative at the lesser of Market Price (as defined in
TSXV policies) and $0.11. The
Borrower will pay for any and all reasonable legal expenses
incurred with the establishment and maintenance of the standby
facility.
Zaio has also arranged a debt facility of up to $4,000,000 lead by StableView Asset Management
for general working capital needs essentially duplicating the terms
of the facility of January 2016.
Stableview has also agreed to convert the January 2016 facility into common shares of the
Company, subject to the regulatory approval.
The issuer bid, standby facility, the Stableview facility and
conversion are all subject to the approval of the regulatory bodies
and the approval of the TSX Venture Exchange.
Zaio also announces that it is holding a shareholder conference
call scheduled for Wednesday, August 31th,
2016 at 4:00pm Eastern Time.
During the call, the executive management of the Company will
provide shareholders with a corporate update and will discuss the
Company's strategic plans and future growth prospects. A question
and answer session will follow the corporate update.
CONFERENCE CALL DETAILS
Date: Wednesday, August 31,
2016
Time: 4:00 PM Eastern Time
Participant Dial-in Numbers:
Local – Toronto (+1)
416-764-8688
Toll Free – North America (+1)
888-390-0546
Conference ID: 59734882
Recording Playback Numbers:
Toronto (+1) 416 764 8677
Toll Free – North America (+1) 888
390 0541
Passcode: 734882 #
Expiry Date: Wednesday, September 7,
2016 4:00 PM Eastern Time
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 and share subscription which may
include, but is not limited to, the approval of the TSX Venture
Exchange. 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