Zaio settles C$3.5 million private placement of convertibles

Deal sells 10% four-year convertible debentures that convert to units

By Devika Patel

Knoxville, Tenn., Aug. 28 - Zaio Corp. said that it raised C$1.06 million in the third tranche of a C$3.5 million private placement of 10% secured redeemable convertible debentures. MGI Securities Inc. was the lead agent for the deal, which priced for C$3 million with a 15% greenshoe on April 8, raised C$931,000 on May 9, C$444,000 on June 5 and C$1.07 million on Aug. 15. The greenshoe was fully exercised.

The debentures, sold in increments of C$1,000, mature on May 9, 2017 and are convertible into units at C$0.12 per unit. The notes may be prepaid at a 10% premium.

Each unit consists of one common share and one warrant, with each warrant exercisable at C$0.15 for two years.

The conversion price reflects a 9.09% premium to the April 5 closing share price of C$0.11. The warrant strike price is a 36.36% premium to that price.

Based in Calgary, Alta., Zaio maintains a database of property information.

Issuer:	Zaio Corp.
Issue:	Secured redeemable convertible debentures
Amount:	C$3,498,000 (including C$498,000 greenshoe)
Maturity:	May 9, 2017
Coupon:	10%
Price:	C$1,000
Conversion price:	C$0.12
Call:	At a 10% premium
Warrants:	One warrant per unit upon conversion
Warrant expiration:	Two years
Warrant strike price:	C$0.15
Agent:	MGI Securities Inc. (lead)
Pricing date:	April 8
Settlement dates:	May 9 (for C$931,000), June 5 (for C$444,000), Aug. 15 (for C$1,068,000), Aug. 28 (for C$1,055,000)
Stock symbol:	TSX Venture: ZAO
Stock price:	C$0.11 at close April 5
Market capitalization:	C$8.33 million

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