MONTRÉAL, Québec, December 16, 2015 – IOU Financial Inc. (TSX Venture Exchange: IOU) (“IOU Financial” or the “Company”), a leading online lender to small businesses, is pleased to announce that it has closed a third and final tranche of its previously announced private placement of 10% convertible unsecured subordinated debentures (the “Debentures”) for gross proceeds of $1,000,000 (the “Third Tranche”) with FinTech Ventures Fund, LLLP (“FinTech”), an affiliate of Qwave Capital LLC, a major shareholder and insider of IOU Financial. This purchase has allowed IOU Financial to reach the maximum gross proceeds of $11,500,000 in principal amount of Debentures sold by way of private placement.

The Debentures will mature on December 31, 2020, bear interest at a rate of 10% per annum, payable monthly and commencing on December 31, 2015, and are convertible at their holders’ option into common shares of IOU Financial (“Common Shares”) at a price of $0.75 per Common Share (the “Conversion Price”), representing a conversion rate of 1,333.33 Common Shares for each $1,000 principal amount of Debentures. The Company will have the right to force the conversion of the Debentures into Common Shares at any time on or after December 31, 2018 should the 20-day volume weighted average price of the Common Shares on the TSX Venture Exchange (the “TSX-V”) exceed 125% of the Conversion Price.

The net proceeds of the Third Tranche will be used primarily by IOU Financial to finance small business loans in the Company’s target markets and for general corporate purposes. The Third Tranche is subject to final approval of the TSX-V.

No brokers were engaged for the Third Tranche. Pursuant to applicable securities laws, all securities issued pursuant to the Third Tranche are subject to a hold period of four months plus one day following the closing of the Third Tranche. The Debentures will not be listed or posted for trading on the TSX-V.

The purchase of $1,000,000 in principal amount of Debentures by FinTech is a related party transaction within the meaning of Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions (“Regulation 61-101”) and Policy 5.9 – Protection of Minority Security Holders in Special Transactions of the TSX-V. In connection with this related party transaction, the Company is relying on the formal valuation and minority approval exemptions of respectively subsection 5.5(a) and 5.7(1)(a) of Regulation 61-101 as neither the fair market value of the Debentures purchased by FinTech nor the fair market value of the consideration therefor exceeds 25% of IOU Financial’s market capitalization. The Board of Directors of IOU Financial has unanimously approved such purchase. A material change report in respect of this related party transaction will be filed by the Company but could not be filed earlier than 21 days prior to its completion due to the fact that the transaction was still subject to confirmation of FinTech’s suitability by the TSX-V.