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Zaio Corporation gets a
thumbs-up from lenders across America – offers the nation’s only official
appraisal delivered instantly
Services
Real Estate Appraisal Solutions
(TSX-V:ZAO)
Zaio Corporation
Suite 330, 1201 – 5th Street SW
Calgary AB Canada T2R 0Y6
Phone: (403) 802-2033
Thomas J. Inserra
President and Chief Executive Officer
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published April 27, 2006
BIO:
Thomas J. Inserra
Mr. Inserra was elected to the roles of President, CEO & Board Member of publicly
traded Zaio Corporation on 7/1/2006, and was recruited by the Board to lead the company
through what is expected to be a period of rapid national growth. He has an extensive
background in the real estate valuation and lending industries including roles as National
Chief Appraiser for the Federal Deposit Insurance Corporation (FDIC) and Resolution Trust
Corporation (RTC) in Washington DC. The FDIC is a federal agency that insures and
regulates banks in the United States and the RTC was established in 1989 by Congress to
help resolve the $402 billion banking and S&L crisis.
Mr. Inserra has also previously served as a Chief Appraiser with Citicorp (nation’s
largest bank) based in Phoenix, Arizona, National Chief Appraiser with HFC in Chicago, and
as Director of eCommerce and Financial Services with Accenture in Singapore, which
required extensive travel throughout Asia providing consulting services to financial
service corporations. Mr Inserra has an established track record of being recruited to
small companies, successfully building management teams, technology solutions and other
internal resources, acquiring the necessary capital, and then leading those companies
through periods of rapid revenue growth. Prior
to joining Zaio, Mr. Inserra was the founder of Pinnacle Peak Advisors, LLC and Pinnacle
Peak Appraisal located in Scottsdale, Arizona. Mr. Inserra is a Certified General
Appraiser, an MAI and SRA designated member of the Appraisal Institute, holds an MBA
degree from the University of Phoenix, and a B.S. degree from Purdue University. For 6
years Mr. Inserra served as a Trustee with the Appraisal Foundation, which is authorized
by Congress to establish USPAP appraisal standards.
Company Profile:
Zaio is a public corporation
that trades under the symbol "ZAO" on the TSX Venture Exchange in Canada and
additional information is available for USA investors under the symbol "ZAOFF".
Zaio and its network of premiere, local appraiser experts photograph and appraise entire
cities, one building at a time from the street. It is the only known company in the world
that develops and maintains a site-verified database of photos, valuations and property
information of virtually every property in entire cities, using a proprietary “GeoScore”
property rating system.
CEOCFO: Mr. Inserra, you are fairly new in your role as CEO of Zaio
Corporation; what is your vision and how do you get there?
Mr. Inserra:
“I became CEO on July 1st (2006), and prior to that the company was in an
extended period of research and development. Since becoming CEO, I have asked the company
to focus its activities on aggressively expanding throughout the United States and so far,
those plans are progressing quite well. For 8 consecutive months the company has achieved
record breaking levels of sales and growth..”
CEOCFO: Please tell us about the appraisal
industry and how Zaio is going to change it.
Mr. Inserra: “The appraisal industry in
the United States is in a period of transition. Over the last 10 years, appraisers as a
group have lost as much as 70% market share to new products, which include computer models
and new technology solutions that exist on the market. We believe that appraisers as an
industry need to adapt and have to take definitive action, so that they can begin to
regain that lost market share. Zaio’s technology is a way for these appraisers to
regain that lost competitive advantage, because it allows appraisers to produce much
higher quality reports that contain much more accurate value estimates. It also vastly
improves their speed of delivery and takes away the advantages that are now enjoyed by
their competitors.”
CEOCFO: Are the appraisers looking for a
solution like Zaio’s or do you need to convince them this is what they need ?
Mr. Inserra: “I think that the demand
among the appraisers is higher than what we anticipated, which is why we have been able to
in just 120 days to achieve very rapid rates of growth. Appraisers are flocking to our
product because they see the competitive advantages that it gives them in the market.
Quite frankly, our biggest challenge within the company is being able to respond to this
demand more quickly. Quite a few appraisers have requested information and are attempting
to purchase our product; just keeping up with the demand is quite a challenge.”
CEOCFO: Tell us about the Zaio product.
Mr. Inserra: “Zaio offers a proprietary
software solution that we bundle with a data base, which contains photographs of virtually
every single property in a city as well as raw property data that we have purchased.
Therefore, when an appraiser signs up and joins the Zaio network, they receive a license
to use the software, the photos, and raw data and then it helps them to prepare their
traditional appraisal reports much more quickly, and more efficiently. In addition, they
can do a better job of analyzing huge amounts of data that would be virtually impossible
for them to analyze on their own without the software.”
CEOCFO: Do you have to continually update your
software?
Mr. Inserra: “Yes, our software is
continually updated. It is a web based solution, so we continually update the software as
well as the data base that the appraisers have access, which is also constantly updated.”
CEOCFO: How do you get all of these photos
taken?
Mr. Inserra: “Zaio employs a network of
professional photographers around the United States who take photographs of every
property. We then merge that photo image with the property data and we present it to the
appraiser in both a desktop application and a PDA application. The advantage of the PDA
application is that it is a small device about the size of a calculator, so that the
appraiser can walk down the street, physically view the property and ensure that we have
the right photo with the right property. They can actually appraise each property as they
are walking down the street.”
CEOCFO: It must be very time consuming to
photograph an entire city!
Mr. Inserra: “It may sound like a
challenge, but we’ve been refining these techniques over the last 3 years. We employ
a large number of photographers; typically, they will drive through a neighborhood, park
their car and with specially manufactured cameras that we have supplied them with the
photographer will stand in front of a home and take the photographs. The cameras have a
digital recorder that allows the photographer to record the address of the property that
they are viewing. When they return to their home that evening, they type in the address of
the property and compile a database of all the addresses and a photograph for every home.
They typically take 500 to 1,500 photos per day. We do provide our photographers with a
significant amount of training and we actually manually review every photo that is taken
to make sure that it has good quality and that it complies with our standards.”
CEOCFO: How have you chosen the cities that you
have started with? What is your criteria
going forward?
Mr. Inserra: “Our ultimate goal is to
provide lenders, insurance companies and other large investors with a full range of
appraisal and valuation products. Therefore, we have to work where the bulk of the lending
activity is occurring within the United States, analyzing the patterns of consumers who
are obtaining first mortgages, second mortgages and home equity lines of credit. The top
30 metro areas in the country that we have focused on and are currently engaged in
operations, represent about 60% of all the lending volume in the country. Our goal is to
finish production of those 30 metro areas by the end of next year, which will give us a
rather large footprint or geographic coverage in 170 cities. We will then be able to offer
customers a full range of valuation products around the country.”
CEOCFO: Is you product affordable for
appraisers and do they find a good ROI?
Mr. Inserra: “We have actually designed a
rather attractive program for the appraisers who are the customers that are buying the
software. There is a third party finance company that will allow them to make the purchase
of the software at a relatively inexpensive $325.00 per month, which is a low fee for the
appraiser when compared with their increased revenues. Therefore, rather than making a
large cash payment in a large purchase, they can opt to do the financing with a low
monthly payment. This also allows the appraiser to reduce the cost to only $325, so their
purchase of our software becomes cash flow positive almost immediately when Zaio can help
bring them 1 to 2 additional appraisal orders per month.”
CEOCFO: Do you have competition from any
similar system or solution?
Mr. Inserra: “Currently, we are not aware
of any company in America that is photographing or appraising every property. Therefore,
our solutions are quite unique in the market. Obviously, there is always the potential for
competitors to jump in at some future point, but there are rather high barriers that would
make that more difficult. For example, our software has been in development for over 3
years, so it would take a lengthy period of time for a company to come in and try to
develop their own software solution. We also are in the process of spending in excess of
$60 million over the next few years to photograph and inspect all of these properties
across the country, which involves a lot of capital that serves as a barrier to entry for
other competitors.”
CEOCFO: How are you funded to be able to afford
those expenditures?
Mr. Inserra: “Zaio already has 2 big
advantages over any potential new competitor and number one is that we are publicly
traded, so at any time we can go to the public markets if necessary and raise money.
However, at the present time we don’t have a need to raise any more money, because we
are already cash flow positive. We just released our third quarter earnings a while back
and are about to announce our 2006 annual earnings which includes a large year-end cash
balance. That monthly cash flow surplus and the money that we have in the bank are ample
for us to complete this project all around the United States.”
CEOCFO: What do you see as the challenges and
how are you ready to meet them?
Mr. Inserra: “Our greatest challenge is
managing our growth; we are signing up new customers at a very rapid pace, so what we are
focused on is increasing our capacity to bring on customers at an even higher rate in
2007. Therefore, we are hiring additional sales people and pursing different sales
channels to reach our customers. Therefore, our biggest challenge is to tap into what is
proven to be a really huge demand and now we need to go out and successfully meet that
demand.”
CEOCFO: How are lenders, your potential
customers, responding to your service?
Mr. Inserra: “We have already spoken to a
large number of lenders across the United States and almost unanimously, the lenders are
saying that they really like our product and that it is the only solution that exists out
there that fully meets their needs. The lenders are the ones that are encouraging us to
grow this as rapidly as we can, so that we can meet their needs and by having this broader
geographic coverage where we are in the 30 largest metro areas, allows us to cover a very
high percentage of their needs.”
CEOCFO: Please address potential investors and
tell us why they should be interested now.
Mr. Inserra: “When I began as CEO on
7/1/06 Zaio’s stock price was $0.17 per share and is now trading around $2.40/share
which represents significant returns for shareholders. If you take a closer look at our
sales and our rate of growth, we still believe that the stock remains undervalued. We
believe this makes an excellent opportunity for a long term investor to get in at a
relatively low price and enjoy what we think will be tremendous growth in the future.”
CEOCFO: For those that are just finding out
about Zaio, where is you stock traded?
Mr. Inserra: “Our stock does trade on the
Canadian Exchange and sometimes U.S. investors are a little confused about how someone in
the United States can buy a stock that is traded on the Canadian Exchange. We have found
that any of the discount brokers or any of the brokers in America are in fact able to buy
the stock on their behalf. It trades under the symbol ZAO on the TSX Venture Exchange in Canada,
but some of the local U.S. investors can also find information under the symbol ZAOFF on
the USA “pink sheets”.”
CEOCFO: In closing, what should people remember
about Zaio?
Mr. Inserra: “Zaio is a high growth
business with a very unique proprietary solution that is not offered by any other company
and is experiencing tremendous market demand. At the end of the day, every successful
business is going to be fueled by demand from customers and Zaio is tapping into a very
large unmet need among lenders throughout the United States.”
disclaimers
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