Zaio holders approve debenture conversion

2016-05-25 19:38 ET - News Release

Mr. Shane Copeland reports

ZAIO CORPORATION ANNOUNCES APPROVAL OF PREVIOUSLY PROPOSED AUTOMATIC DEBENTURE CONVERSION

Holders of 10-per-cent secured, redeemable, convertible debentures approved today, by extraordinary resolution, indenture amendments providing for the automatic conversion of outstanding debentures into only common shares of Zaio Corp. in consideration for the issuance of 10,833 common shares for each $1,000 debenture.

"We strongly believe that the automatic conversion of debentures into common shares benefits both the company and our debentureholders," said Phil Wazonek, president and chief operating officer of Zaio. "Through this automatic conversion, we not only strengthen our balance sheet from reduced interest costs, but also ensure that we have the working capital we need moving forward to provide confidence to both new and current clients of our Valuation Vision business. This decision is intended to benefit all stakeholders and increase shareholder value, furthering us towards our goal of having the capital structure required to accelerate growth."

The amendments to the indenture governing the debentures approved today provide for:

• Payment of 10,833 common shares for each $1,000 debenture (or integral multiple thereof) automatically converted;
• Conversion into common shares only instead of units composed of common shares and warrants;
• Automatic conversion of the debentures.

Each debentureholder will be issued 8,333 common shares upon conversion at 12 cents 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 is required of debentureholders. Completion of the trust indenture amendment and issuance of the common shares are subject to receipt of final exchange approval.

We seek Safe Harbor.