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Zaio Corp (2)
Symbol ZAO
Shares Issued 183,104,510
Close 2015-11-27 C$ 0.08
Market Cap C$ 14,648,361
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Zaio loses $4.48-million in Q3

2015-11-27 21:03 ET - News Release

Mr. Shane Copeland reports

ZAIO CORPORATION ANNOUNCES Q3 2015 FINANCIAL RESULTS

Zaio Corp. is releasing its third quarter financial results for the three- and nine-month periods ended Sept. 30, 2015.

"During the quarter, we successfully integrated the operations of Valuation Vision into Zaio, focusing on selling our BPO family of products to our well-established customer base of over 100 asset management, private equity and national mortgage services firms that currently buy our innovative BPO products," said Shane Copeland, chief executive officer of Zaio. "The entire team understands that our immediate task is to drive revenue growth from existing Valuation Vision products, while aggressively managing expenses to maximize shareholder value. We believe we have just started to scratch the surface of the market that will accept BPOMerge as a core valuation product.

"Subsequent to the quarter-end, we also announced that the company is terminating the acquisition of Axis Appraisal Management," continued Mr. Copeland. "After carefully reviewing the strategic synergies among the two companies and the trends in the valuation marketplace, the board decided that the acquisition of Axis Appraisal was not a strategic fit for the primary focus of our business. While we intend to continue to work and collaborate with Axis as a business partner on various products in the future, we are now well positioned to do business with all appraisal management companies, which in our view is a much better opportunity to get our proprietary technology into the greater real estate valuation market."

Financial highlights

Total revenue was $1,130,924 for the three months ended Sept. 30, 2015, compared with nil for the same period in 2014. Total revenue was $1,668,330 for the nine months ended Sept. 30, 2015, compared with nil for the same period in 2014. Total expenses were $2,906,811 for the three months ended Sept. 30, 2015, compared with $1,164,367 for the same period in 2014. Total expenses were $7,236,546 for the nine months ended Sept. 30, 2015, compared with $4,412,067 for the same period in 2014. Net loss and comprehensive loss of $4,484,361 (three cents per share) for the three months ended Sept. 30, 2015, compared with loss of $1,148,457 (two cents per share) for the same period in 2014. Net loss and comprehensive loss of $10,212,168 (six cents per share) for the nine months ended Sept. 30, 2015, compared with loss of $4,330,347 (six cents per share) for the same period in 2014. Note that that loss for the three and nine months ended Sept. 30, 2015, includes the $2.0-million and $3.7-million expenses, respectively, related to terminating the ZDS agreement. As at Sept. 30, 2015, the company's cash position was $480,958, compared with a cash position of $1,583,311 on June 30, 2015.

Operational highlights

During the quarter, the company achieved significant revenue from sales of valuation products to over 100 clients.

Subsequent to the quarter, Zaio:

  • Accepted the resignation of David Gregory from the board;
  • Selected Mr. Copeland as the new CEO, and Phil Wazonek as president and chief operating officer of the company;
  • Announced the termination of the Axis Appraisal Management merger;
  • Materially reduced operating costs at its Calgary office by eliminating staff and contractor positions, saving the company $1,110,677 in annualized personnel costs (approximately 70 per cent), and reviewed and adjusted costs in Carlsbad, while preserving the core technology assets in Calgary as the company focuses on growth opportunities for its Valuation Vision BPO products;
  • Reviewed and adjusted contracts with the intention of minimizing fixed costs;
  • Transferred company-wide financial reporting to the Calgary office.

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