IOU Financial Announces Private Placement of Up To $2.2 Million of Equity

IOU Financial Inc. intends to complete a non-brokered private placement of up to 8,148,148 common shares of the company for gross proceeds of up to $2.2-million. The shares will be offered at a price of 27 cents per share (representing the 21-day value-weighted average price of the shares on the TSX Venture Exchange as of Sept. 30, 2016), on a prospectus-exempt basis, in the provinces of British Columbia, Alberta, Ontario and Quebec.

The company expects that insiders of the company, including Philippe Marleau, Serguei Kouzmine, David John Kennedy, Yves Roy and Jason Cawley (or entities related to, or controlled by, them), each of which is a director and/or officer of the company, will participate in the private placement, for approximately up to 60 per cent of the $2.2-million private placement.

The net proceeds of the private placement will be used primarily by IOU Financial to finance small-business loans in the company’s target markets (the United States and Canada) and for general corporate purposes. The private placement is subject to regulatory approval, including the approval of the TSX-V.

The private placement may be considered a related party transaction within the meaning of Regulation 61-101 respecting protection of minority securityholders in special transactions. However, the private placement is exempt from the valuation and minority approval requirements provided under such regulation since the fair market value of the private placement to related parties is less than 25 per cent of the market capitalization of IOU Financial. The board of directors of IOU Financial has approved the private placement. Messrs. Cawley, Marleau, Kouzmine and Roy declared their interest prior to the approval by the board of directors of IOU Financial and abstained from voting thereon.

About IOU Financial

IOU Financial provides small businesses throughout the United States and Canada access to the capital they need to seize growth opportunities quickly. It makes loans of up to $150,000 (U.S.) to qualified U.S. applicants ($100,000 in Canada) within a few business days, with affordable charges favourable to cash flow management.

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