Mr. David King reports

ZAIO CORPORATION APPROVES DEBENTURE INTEREST PAYMENTS, BROKER WARRANT CONVERSIONS AND SHARE CAPITAL ADJUSTMENTS

Zaio Corp.'s debentureholders have agreed to take shares as payment for a total of $253,400 of the Dec. 31, 2014, debenture interest payment pursuant to the terms of the debentures issued under the trust indenture dated May 9, 2013. The total number of shares issued in lieu of cash will be calculated based on the greater of the 20-day weighted-average trading price of Zaio's shares prior to Dec. 31, 2014, and the closing market price of Zaio's shares on the last trading day prior to the interest payment date.

A total of $19,000 of debenture interest payments will be made in cash pursuant to the terms of the May 9, 2013, trust indenture. Holders of approximately 93 per cent of the outstanding debentures have agreed to take shares as their form of interest payment for this semi-annual interest payment date.

Zaio also announces that it has issued 1,725,518 common shares pursuant to the exercise of 1,715,277 broker warrants and 10,241 common share purchase warrants for gross proceeds of approximately $209,370. The broker warrants were issued pursuant to the company's 2013 debenture financing and were exercisable for 12 cents per broker warrant into one common share and one common share purchase warrant at an exercise price of 15 cents per share. Approximately 55 per cent of the broker warrants issued have been exercised to date.

In addition, the company announces that approximately two million common shares have been returned to treasury as a result of subscription adjustments from its Dec. 11, 2014, financing.

We seek Safe Harbor.