IOU Financial Achieves Profitability, Provides Update on Alternative Transaction Process and Reminds Shareholders to Reject Qwave’s Coercive Unsolicited Partial Offer

  • IOU Financial achieved profitability with record loan originations in the months of July and August, totaling US$31.3 million, representing a year over year increase of 150%.
  • Board has approved a letter of intent for a credit facility of up to US$50 million from a major institutional lender.
  • Board has received an offer to proceed with a private placement of up to $10 million of convertible debentures, with committed subscriptions in excess of $7 million.
  • Board continues to recommend that shareholders reject and not tender to Qwave’s coercive unsolicited partial offer.
  • Qwave’s partial offer remains opportunistic and does not reflect the true value of IOU Financial given its growth opportunities and ability to increase profitability with a new credit facility.

 

MONTREAL, Québec, September 18, 2015 /CNW/ – IOU Financial Inc. (TSX Venture Exchange: IOU) (“IOU Financial” or the “Company”), a leading online lender to small businesses in the United States, today announced that it has achieved profitability with record loan originations, that it has entered into a letter of intent for a credit facility of up to US$50 million, that it has received an offer to proceed with an additional financing of up to $10 million of convertible debentures, and wishes to remind shareholders to reject the unsolicited partial offer by Qwave Capital LLC (“Qwave”) to purchase 34,000,000 outstanding common shares of the Company (the “Common Shares”) at a price of $0.50 per Common Share (the “Qwave Partial Offer”).

Based on Record Origination Volumes IOU Financial Achieved Profitability in July and August

As previously announced, the Company’s loan originations for the months of July and August, totaled US$31.3 million, representing a year over year increase of 150% in comparison to the same period in 2014. Based on these volumes, IOU Financial achieved profitability for the months of July and August in excess of $500,000 in aggregate (excluding non-recurring costs).

The Board has approved a letter of intent for a credit facility of up to US$50 million from a major institutional lender

The facility would have an initial commitment of US$25 million and would be expandable to US$50 million at IOU’s request and the lender’s acceptance.

It is expected that the credit facility will not only increase the availability of capital to support IOU Financial’s growth but will also significantly lower its funding cost of capital, both of which continue to be part of management’s strategic objectives.

 

The Board has received an offer to proceed with a private placement of up to $10 million in principal amount of convertible debentures, with committed subscriptions in excess of $7 million

 

Since it began its alternative transaction process initiated in response to the Qwave Partial Offer, IOU Financial has received a number of indicative proposals for alternative transactions to the Qwave Partial Offer, including an offer for a private placement of 10% unsecured subordinated convertible debentures convertible at a price of $0.75 per Common Share for gross proceeds of up to $10 million, along with committed subscriptions in excess of $7 million. The debentures would mature on December 31, 2020 and the Company would have the right to force the conversion of the debentures into Common Shares at any time after December 31, 2018 should the 20-day VWAP of the Common Shares exceed 125% of the conversion price. The board of directors of IOU Financial (the “Board”), acting on the recommendation of a special committee composed entirely of independent directors of IOU Financial, has held discussions in respect thereof with the interested parties and will continue to do so.

There can be no assurance that any financing or other alternative transaction will be completed. The Company intends to update shareholders when the circumstances so warrant.

“The Board wishes to reiterate its confidence in management’s ability to grow the Company’s business and its ability to secure additional financing. IOU Financial is at an inflection point in its operating results and the Company is positioned to deliver value to all shareholders,” said Evan Price, the Chairman of the Board.

Qwave Partial Offer

The Board continues to unanimously recommend that shareholders REJECT and NOT TENDER their Common Shares to the Qwave Partial Offer for the reasons set forth in the Company’s press release of July 10, 2015, which included:

–     given the recent profitability achieved by IOU Financial, the Qwave Partial Offer more than ever significantly undervalues the Company’s market position, assets, brand presence and long-term business prospects;

–     the Qwave Partial Offer continues to be financially inadequate;

–     to date, Qwave has still not articulated a credible plan for the Company’s business;

–     Qwave’s track record of managing technology companies remains unknown;

–     the Qwave Partial Offer will have a material adverse effect on the liquidity of the Common Shares;

–     the Qwave Partial Offer seeks to provide Qwave with effective control of the Company, without offering shareholders an appropriate control premium for the Common Shares purchased and no premium for the Common Shares not purchased; and

–     the Qwave Partial Offer continues to be coercive: tendering shareholders will only be able to sell at most 55.3% of their Common Shares, assuming all Common Shares are tendered.

 

Shareholders who have already tendered their Common Shares to the Qwave Partial Offer should WITHDRAW them IMMEDIATELY. A notice of withdrawal, which sets forth in detail how to withdraw Common Shares under the Qwave Partial Offer, is available on the Company’s website at: https://ioufinancial.com/qwave-offer-info/how-to-reject-qwave-partial-offer/

Any questions or requests for assistance in connection with the withdrawal of Common Shares tendered under the Qwave Partial Offer may be directed to IOU Financial at 1-877-419-0934 (toll-free in North America) or investors@ioufinancial.com.

 

About IOU Financial Inc.

IOU Financial provides small businesses throughout the U.S. access to the capital they need to seize growth opportunities quickly. Typical customers include medical and dental practices, grocery and retail stores, restaurant and hotel franchisees and e-commerce companies. In a unique approach to lending, IOU Financial’s advanced, automated application and approval system accurately assesses applicants’ financial realities, with an emphasis on day-to-day cash flow trends. It makes loans of up to US$150,000 to qualified applicants within a few business days, with affordable charges favorable to cash-flow management. IOU Financial’s speed and transparency make it a trusted alternative to banks. To learn more visit: https://ioufinancial.com.

 

Financial Information

Figures reported under the heading “Based on Recent Origination Volumes IOU Financial Achieved Profitability in July and August” are preliminary and are subject to change as the Company’s financial results for the quarter ending September 30, 2015 are finalized. Such figures have not been reviewed or audited by the Company’s independent auditors. The Company does not intend to disclose financial figures outside of its quarterly or annual reporting in the future and will only do so if future circumstances so warrant. The Company is not currently providing financial outlook and no assurance can be given as to the Company’s results or performance for future periods.

 

Forward Looking Statements

Certain information set forth in this news release may contain forward-looking statements. Forward-looking statements are statements, other than statements of historical fact, that address or discuss activities, events or developments that IOU Financial expects or anticipates may occur in the future. These forward looking statements can be identified by the use of words such as “anticipates”, “believes”, “estimates”, “expects”, “may”, “plans”, “projects”, “should”, “will”, or the negative thereof or other variations thereon. These forward-looking statements reflect management’s current views and are based on certain assumptions including assumptions as to future economic conditions and courses of action, as well as other factors management believes are appropriate in the circumstances. Such forward-looking statements are subject to risks and uncertainties and no assurance can be given that any of the events anticipated by such statements will occur or, if they do occur, what benefit IOU Financial will derive from them. A number of factors could cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, risks related to the completion or not of a financing, risks related to the Company’s incapacity to execute on its business plan, risks related to the actions taken by Qwave in connection with the Qwave Partial Offer, risks related to the actions taken by shareholders in response to the Qwave Partial Offer, risks related to the possible effects of the Qwave Partial Offer on the business and prospects of IOU Financial, risks inherent in growing a new business, dependence on third-party service providers, competition, regulatory risk, dependence on key personnel, risks related to rapid growth of IOU Financial, security and confidentiality risk, risk related to inability to attract borrowers and lenders, technological development risk, IT disruptions, maintenance of client relationships, litigation risk, volatility of stock price, and other factors that are beyond its control. Additional information concerning these and other factors can be found beginning on page 15 under the heading “Risks and Uncertainties” in IOU Financial’s management’s discussion and analysis dated August 25, 2015, which is available under IOU Financial’s profile on SEDAR at www.sedar.com.

 

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

 

For Further Information:

Shareholders:

Philippe Marleau Mayco Quiroz
President and Chief Executive Officer Chief Financial Officer
(514) 789-0694 ext. 225 (514) 789-0694 ext. 298

 

Media:

Riyaz Lalani

Bayfield Strategy, Inc.

(416) 907-9365

rlalani@bayfieldstrategy.com

IOU Financial Chairman Releases Letter to Shareholders

  • IOU urges shareholders to REJECT Qwave Partial Offer
  • Qwave lacks credible plan and its offer is substantially inadequate
  • IOU’s business continues to accelerate and has originated US$260 million in loans since inception

MONTREAL, Sept. 8, 2015 /CNW/ – IOU Financial Inc. (TSX Venture Exchange: IOU) (“IOU” or the “Company“), a leading online lender to small businesses, today released a letter from the Chairman of the Board of Directors (the “Board“) to IOU shareholders (“Shareholders“), further responding to the unsolicited partial takeover offer from Qwave Capital LLC (“Qwave“) for the purchase of 34,000,000 outstanding common shares (the “Common Shares“) of IOU (representing approximately 55.3% of the issued and outstanding Common Shares at the date hereof (50.4% of Common Shares on a fully-diluted basis) at a price of $0.50 per Common Share (the “Qwave Partial Offer“).

Shareholders are encouraged to review IOU’s Directors’ Circular which sets forth in greater detail the Board’s recommendation and the reasons for rejecting the Qwave Partial Offer, is available under the Company’s profile on SEDAR at www.sedar.com and was mailed to all Shareholders. The Directors’ Circular is also available on the Company’s Website www.ioufinancial.com.

The full text of the Chairman’s letter follows:

Dear Fellow Shareholders:

You have an important decision to make, one that will affect the future of your investment in IOU.

As you know, an entity called “Qwave” made a partial bid for IOU several weeks ago. If successful, Qwave would gain control of just over 50% of IOU fully diluted outstanding shares, allowing it to effectively control IOU without having to purchase the entire company and without having to pay all Shareholders an appropriate control premium. Due to the effect of pro-ration if all Shareholders were to accept the Qwave Partial Offer, Shareholders will be able to tender at most 55.3% of their outstanding shares to the Qwave Partial Offer.

After the successful completion of the Qwave Partial Offer, the remaining minority shareholders of IOU will have little say in how their company is run, since Qwave’s holdings will allow it to install a board of its choosing. Important decisions about future M&A activity, operations, and leadership, will be in the hands of Qwave’s hand-picked directors. In addition, with 50% fewer Common Shares outstanding, the stock may suffer from significantly lower trading liquidity, resulting in less attention from the marketplace. Most importantly, the Board believes that in the hands of Qwave, IOU will have significantly diminished prospects for growth and profitability given the risk of the potential loss of key management personnel and Qwave’s lack of operating experience.

On July 10 th , the Board unanimously recommended that IOU shareholders REJECT the Qwave Partial Offer and NOT TENDER their Common Shares. Each member of the Board and management team has also rejected the Qwave Partial Offer and will not tender their personal shareholdings.

The timing of the Qwave Partial Offer is highly opportunistic, as it comes at a critical inflection point in IOU’s business and amid increased investor interest in the alternative non-bank lending space. The years of work invested by our management team, and you, our shareholders, to develop IOU’s lending platform, sales channels and partnerships is beginning to bear fruit, and we are seeing a significant acceleration in our business which was apparent in the second quarter of 2015, and has continued in the third quarter. In the second quarter of 2015, IOU originated US$33.8 Million in new loans, representing a year over year increase of 40%. In the current third quarter, for the months of July and August alone, loan originations totaled US$31.3 Million, representing a year over year increase of 150% vs. the same period in 2014.

To-date we have originated over US$260 million of loans since inception.

In addition, IOU announced plans to build on its success in the United States by expanding its offering to Canada – transforming small business lending in its home market.

We believe that further market expansion, backed up by consecutive quarters of strong and consistent loan growth will ultimately be recognized and rewarded by the stock market. We should not be surprised that firms like Qwave would want to get in front of the stock market’s recognition of value with an inadequate and potentially coercive takeover bid. It is up to us as shareholders, to recognize the tremendous opportunity in front of us and reject a bid that your board believes deeply undervalues IOU’s market position, assets, brand presence, and long-term business prospects.

To-date, Qwave has failed to articulate a credible plan for IOU and has said little about its track record and principals other than noting their activities have been focused on “physics and the material sciences”. In contrast, IOU has a well-thought out strategic plan, a track-record of growth and execution and a motivated and highly-qualified management team led by CEO Philippe Marleau. The Board believes that the loss of IOU’s management team could adversely affect the value of the remaining shares of IOU following the completion of the Qwave Partial Offer. The Board also reminds Shareholders that it is pursuing alternative transactions to the Qwave Partial Offer, and it anticipates making an announcement on the conclusion of its deliberations in the short term.

Fellow Shareholders, I urge you to reject the Qwave Partial Offer and allow your Board and management team to remain focused on delivering sustainable profitability and long term shareholder value. IOU has the right plan, the right people and is delivering results for Shareholders.

To REJECT the Qwave Partial Offer, you don’t need to take any action. Simply discard any materials sent to you byQwave or their representatives. If you have tendered your Common Shares to the Qwave Partial Offer, withdraw them as indicated in the Directors’ Circular.

If you have questions or require assistance, please contact IOU Financial at 1-877-419-0934 (toll-free in North America) or investors@ioufinancial.com

Sincerely,

Evan Price, Chairman of the Board

IOU Financial Board Of Directors Unanimously Recommends that Shareholders REJECT Qwave’s Unsolicited Inadequate Partial Offer

• IOU board and management poised to deliver sustainable long term shareholder value, Qwave offer puts that at risk.
• Qwave’s partial offer significantly undervalues IOU’s market position, assets, brand presence, and long-term business prospects.
• Qwave’s track record is unknown and they have not articulated a credible plan for IOU.

Montreal, Quebec, July 10, 2015 – IOU Financial Inc. (TSX Venture Exchange: IOU) (“IOU” or the “Company“), a leading online lender to small businesses, announces today that its Board of Directors (the “Board“) has carefully reviewed and considered the unsolicited partial takeover offer from Qwave Capital LLC (“Qwave“) for the purchase of 34,000,000 outstanding common shares (the “Common Shares”) of IOU (representing approximately 55.3% of the issued and outstanding Common Shares at the date hereof (50.4% of Common Shares on a fully-diluted basis) at a price of $0.50 per Common Share (the “Qwave Partial Offer“) and has received the benefit of advice from the Company’s financial and legal advisers. The Board unanimously recommends that IOU shareholders (“Shareholders“) REJECT the Qwave Partial Offer and NOT TENDER their Common Shares. Shareholders who have already tendered their Common Shares should WITHDRAW them immediately.

“We take our responsibility to you, our Shareholders, seriously and this is why the Board unanimously recommends that you REJECT this opportunistic and financially inadequate unsolicited partial offer which fails to recognize the full value of your Company and its growth story. This partial offer is a coercive attempt by Qwave to gain control of your Company and capture its upside potential, without offering you an appropriate control premium”, stated Evan Price, Chairman of the Board.
“IOU has a bright future ahead, this offer undervalues our strong market position, growing brand presence in the United States, as well as our future earnings and growth. The Board and management of IOU believe that the Company is well positioned to deliver sustainable long term shareholder value – and as such, each of IOU’s directors and officers will reject the Qwave Partial Offer and not tender their Common Shares,” continued Mr. Price.

Board Reasons for Rejection

In unanimously concluding that the Qwave Partial Offer is inadequate and not in the best interests of IOU and Shareholders, the Board identified a number of factors, including the following:

The Qwave Partial Offer Significantly Undervalues IOU’s Market Position, Assets, Brand Presence and Long-Term Business Prospects. The Board believes the Qwave Partial Offer does not reflect the underlying and long-term value of IOU’s assets and businesses and provides inadequate value to Shareholders as the business of IOU is poised to undergo a significant transformation with respect to how it is funded. This is due to the business now having the scale and experience to allow for additional (lower-cost) on-balance-sheet funding that will significantly enhance the earnings profile of the assets under management by IOU. The Company has consistently been an industry leader, and continues to build momentum. IOU’s proprietary platform has enabled it to fund over $200 million in small business loans, leveraging technology to provide a faster and more efficient loan process.

The Qwave Partial Offer is Financially Inadequate. IOU’s financial advisor, Raymond James Ltd. (“Raymond James“), has delivered an opinion that the consideration offered pursuant to the Qwave Partial Offer is inadequate, from a financial point of view, to the Shareholders. The Board has instructed Raymond James to explore alternative transactions to the Qwave Partial Offer. The Board intends to use the time provided by IOU’s shareholder rights plan, effective as of June 29, 2015 (the “Rights Plan“), to vigorously pursue those alternative transactions.

The Timing of the Qwave Partial Offer is Opportunistic. The Board believes that the Qwave Partial Offer was opportunistically made at a time when the Common Shares were trading near their 52-week low.

Qwave Has Not Articulated A Credible Plan For IOU’s Business. Qwave claims that the Qwave Partial Offer will help “grow” the Company, The Qwave Partial Offer does not provide for additional financing which could help such claimed growth as the Qwave Partial Offer does not add to IOU’s treasury. Qwave has failed to provide any visibility as to any planned changes to IOU’s business plan, management or board of directors. It is unclear what benefits, if any, there would be for Shareholders through a successful Qwave Partial Offer. With effective control, it is evident that Qwave can act to its own benefit, however, to the detriment of other Shareholders.

Qwave’s Track Record is Unknown. Qwave claims to have a “strong track record of success” at “finding and investing in companies with breakthrough technologies and excellent potential for growth and value creation”. IOU is not aware of any previous investments made by Qwave in companies similar to IOU or involved in a similar industry. Therefore, IOU doubts that an investor such as Qwave, which is “focused on physics and materials science”, has the expertise or experience needed to “grow the company, increase market share and create value for Shareholders”.

The Qwave Partial Offer Seeks to Provide Qwave with Effective Control of IOU, without Offering Shareholders an Appropriate Control Premium for the Common Shares Purchased and no Premium for the Common Shares not Purchased. If successful, the Qwave Partial Offer will in effect remove Shareholders’ decision-making rights in connection with, among other things, (i) fundamental changes such as certain acquisitions, mergers, amalgamations or other liquidity events, (ii) election of the Board, and (iii) the declaration of dividends.

Qwave’s Offer is at a Price Lower than it Has Indicated it Would Pay in the Recent Past. In respect of its February 2015 private placement offer, Qwave indicated in its press release of June 15, 2015 that it had then offered $0.58 per Common Share for a NON-CONTROL ownership stake in the Company, which is more than the Qwave Partial Offer of $0.50 per Common Share for a CONTROL position in IOU. Shareholders should not accept this low-ball offer which in no way reflects a control premium. In addition, Qwave itself has a robust view of IOU’s near term prospects as in its February proposal, Qwave was ready to invest in warrants to purchase Common Shares, exercisable over a 36-month period at a price of $1.16, which is significantly higher than the Qwave Partial Offer of $0.50 per Common Share.

The Qwave Partial Offer is, by its Nature, Coercive: Tendering Shareholders will only Be Able to Sell at Most 55.3% of their Common Shares. The Qwave Partial Offer is a “partial bid”, meaning it is an offer to acquire less than all of the Common Shares, and accordingly, it is not possible for all Common Shares deposited to the Qwave Partial Offer to be taken up and paid for by Qwave (due to proration). Shareholders will have no assurance as to how the balance of their Common Shares will be valued on the TSX Venture Exchange.

The Qwave Partial Offer is an Unfettered Right to Walk, Subject to 15 Conditions. The Qwave Partial Offer is highly conditional for the benefit of Qwave, resulting in substantial uncertainty for Shareholders as to whether Qwave will acquire any Common Shares under the Qwave Partial Offer. The Qwave Partial Offer is subject to 15 conditions, the majority of which are subject to Qwave’s determination “in its sole judgment”, providing Qwave with an unfettered right to not take up and pay for the Common Shares.

The Qwave Partial Offer will have a Material Adverse Effect on the Liquidity of the Common Shares. The Board believes that the liquidity of the Common Shares after completion of the Qwave Partial Offer will be adversely affected, which may in turn have a negative impact on the trading price of the Common Shares. In the absence of a liquid trading market, the market price of the Common Shares will likely not reflect the fair value of the Common Shares and selling Shareholders may be forced to accept a market price that is not reflective of the fair value of their Common Shares.

Risks Associated with Potential Loss of Key Management Personnel and Qwave’s Lack of Operating Experience. The loss of IOU’s current management team, or any member thereof, including, without limitation, its President and Chief Executive Officer, Mr. Philippe Marleau, would adversely affect the Company’s business and would also deprive IOU of such management’s intellectual and operational expertise, which is at the core of IOU’s competitive advantage and success. Qwave’s lack of experience and expertise in this highly specialized industry, combined with a potential exodus of senior, experienced management of IOU, could adversely affect the value of the residual Common Shares held by shareholders.

The Qwave Partial Offer is not a Permitted Bid. The Rights Plan was adopted by IOU effective on June 29, 2015 in response to the Qwave Partial Offer. Under the Rights Plan, any offer for less than all of the Company’s issued and outstanding Common Shares, including the Qwave Partial Offer, will not be considered a “Permitted Bid”.

Qwave acting in breach of a Confidentiality Agreement with IOU. Pursuant to a Confidentiality Agreement with IOU dated November 5, 2014, Qwave obtained access to non-public information about IOU. In response to the Qwave Partial Offer, IOU has filed a motion with the Québec Superior Court seeking to prohibit the misuse by Qwave of IOU’s confidential information and suspend the Qwave Partial Offer. On July 9, 2015, Justice Riordan of the Québec Superior Court issued an interim order providing “that any acceptance of the Qwave offer to purchase is to be held in trust by the Depositary and Information Agent and not remitted to the Offeror.” This interim order shall expire upon judgment by the Québec Superior Court on the motion for a safeguard order to be heard on July 15th, 2015.

Important Shareholder Information

A copy of the Directors’ Circular, which sets forth in greater detail the Board’s recommendation and the reasons for rejecting the Qwave Partial Offer, is available under the Company’s profile on SEDAR at www.sedar.com and is being mailed to all Shareholders. The Directors’ Circular is also available on the Company’s Website www.ioufinancial.com.

TO REJECT THE QWAVE PARTIAL OFFER – DO NOTHING, DO NOT TENDER
IF YOU HAVE ALREADY TENDERED – WITHDRAW YOUR COMMON SHARES, AS INDICATED IN THE DIRECTOR CIRCULAR

Any questions or requests for assistance may be directed to IOU Financial at 1-877-419-0934 (toll-free in North America) or investors@ioufinancial.com.

About IOU Financial Inc.
IOU Financial provides small businesses throughout the U.S. access to the capital they need to seize growth opportunities quickly. Typical customers include medical and dental practices, grocery and retail stores, restaurant and hotel franchisees and e-commerce companies. In a unique approach to lending, IOU Financial’s advanced, automated application and approval system accurately assesses applicants’ financial realities, with an emphasis on day-to-day cash flow trends. It makes loans of up to $150,000 to qualified applicants within a few business days, with affordable charges favorable to cash-flow management. IOU Financial’s speed and transparency make it a trusted alternative to banks. To learn more visit: www.ioufinancial.com.

Forward Looking Statements
Certain information set forth in this news release may contain forward-looking statements. Forward-looking statements are statements, other than statements of historical fact, that address or discuss activities, events or developments that IOU expects or anticipates may occur in the future. These forward looking statements can be identified by the use of words such as “anticipates”, “believes”, “estimates”, “expects”, “may”, “plans”, “projects”, “should”, “will”, or the negative thereof or other variations thereon. These forward-looking statements reflect management’s current views and are based on certain assumptions including assumptions as to future economic conditions and courses of action, as well as other factors management believes are appropriate in the circumstances. Such forward-looking statements are subject to risks and uncertainties and no assurance can be given that any of the events anticipated by such statements will occur or, if they do occur, what benefit IOU will derive from them. A number of factors could cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, risks related to the actions taken by Qwave in connection with the Qwave Partial Offer, risks related to the actions taken by Shareholders in response to the Qwave Partial Offer, risks related to the possible effects of the Qwave Partial Offer on the business and prospects of IOU, risks inherent in growing a new business, dependence on third-party service providers, competition, regulatory risk, dependence on key personnel, risks related to rapid growth of IOU, security and confidentiality risk, risk related to inability to attract borrowers and lenders, technological development risk, IT disruptions, maintenance of client relationships, litigation risk, volatility of stock price, and other factors that are beyond its control. Additional information concerning these and other factors can be found beginning on page 13 under the heading “Risks and Uncertainties” in IOU’s management’s discussion and analysis dated May 27, 2015, which is available under IOU’s profile on SEDAR at www.sedar.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For more information, shareholders please contact IOU at:
1-877-419-0934 (toll-free in North America) or investors@ioufinancial.com.

or

Philippe Marleau

Chief Executive Officer

(514) 789-0694 ext. 225

Media:
Bayfield Strategy, Inc. – Riyaz Lalani

IOU Financial Commences Legal Proceedings to Suspend the Unsolicited Partial Offer of Qwave

Montreal, Quebec, July 7, 2015 – IOU Financial Inc. (TSXV: IOU) (“IOU Financial” or the “Company”), a leading online lender to small businesses, today announces that it has commenced legal proceedings against Qwave Capital LLC (“Qwave”) and its manager Serguei Kouzmine before the Québec Superior Court.

IOU Financial alleges that, in making its unsolicited partial offer for 34,000,000 common shares of IOU Financial dated June, 25, 2015 (the “Unsolicited Partial Offer”), Qwave misused confidential information and otherwise acted in a manner not permitted by a confidentiality agreement dated November 5, 2014. Accordingly, IOU Financial is seeking, among other things, an order suspending the Unsolicited Partial Offer.

Shareholders are reminded not to take any action with respect to the Unsolicited Partial Offer until the Board of Directors of the Company has made a statement with respect thereto.

IOU Financial Provides Additional Details Regarding Its Previously – Announced Private Placement

MONTRÉAL, Québec, July 6, 2015 –IOU Financial Inc. (TSX Venture Exchange: IOU) (“IOU Financial” or the “Company”). Pursuant to the Press Release dated June 19, 2015, IOU Financial, a leading online lender to small businesses, wishes to provide further details regarding its previously announced private placement for gross proceeds of $3,118,000.

As previously announced on June 19, 2015, a syndicate of agents (the “Agents”) led by Haywood Securities Inc. and including Cormark Securities Inc. completed an offering (the “Offering”) of 7,795,000 common shares (the “Common Shares”) at a price of $0.40 per Common Share (the “Offer Price”).

As compensation for their services in connection with the Offering, IOU Financial has paid to the Agents a cash commission equal to 7% of the gross proceeds of the Offering, other than in respect to 1,250,000 Common Shares sold to a related party of the Company (for which a 5% commission fee was paid), and it has issued to the Agents an aggregate of 545,650 compensation options, each such option entitling the holder thereof to purchase one Common Share at the Offering Price until June 19, 2017.

All securities issued at the closing of the Offering (including underlying securities) are subject to a hold period under applicable Canadian securities legislation and the policies of the TSX Venture Exchange (the “TSX-V”), which expires on October 20, 2015.

This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.

IOU Financial Advises Shareholders Not to Take Action with respect to Qwave’s Unsolicited Partial Offer; Hires Raymond James Ltd. as Financial Advisor and Announces Adoption of a Rights Plan

Montreal, Quebec, June 29, 2015 — IOU FINANCIAL INC. (“IOU Financial” or the “Company”; ticker symbol IOU/TSX-V), a leading online lender to small businesses, acknowledges the filing on June 25, 2015, of a take-over bid circular by Qwave Capital LLC (“Qwave”) for its unsolicited partial offer to purchase 34,000,000 outstanding common shares of IOU Financial (representing approximately 55.3% of IOU Financial’s issued and outstanding shares at the date hereof and 50.4% of IOU Financial’s issued and outstanding shares at the date hereof on a fully-diluted basis) at a price of $0.50 per common share. The current expiry date of the partial offer is July 31, 2015.

The board of directors of the Company (the “Board”) is evaluating Qwave’s partial offer and is also considering other alternatives. To that effect, the Board has hired Raymond James Ltd. as its financial advisor. Once a thorough review of Qwave’s partial offer and other alternatives has been completed, the Board will communicate its views to shareholders by issuing a news release and filing and mailing a circular to them within the statutory time period of 15 days from the date of the filing and mailing of the Qwave partial offer. In the interim, the Board advises shareholders not to take any action with respect to this unsolicited partial offer until the Board and its advisors have evaluated the partial offer and the Company’s other alternatives, and the Company has made a statement with respect thereto.

Given the unsolicited nature of Qwave’s partial offer and the time required to thoroughly consider alternatives to the partial offer, the Board has adopted a shareholder rights plan effective as of this date. The rights issued under the rights plan will become exercisable when a person, together with any parties related to it, acquires 20% or more of the Company’s outstanding common shares without complying with the “Permitted Bid” provisions of the rights plan or without approval of the Board. Should such an acquisition occur, rights holders (other than the acquiring person and related persons) will be able to purchase common shares of the Company at a significant discount to the market price of the common shares at that time.
Under the rights plan, a Permitted Bid is a bid (i) made to all holders of the Company’s common shares for all of the outstanding common shares they hold, (ii) which provides, among other things, that the acquiring person may take up and pay for the common shares only if at least 50% of the outstanding common shares of the Company, other than those held by the acquiring person and related persons, have been tendered, and (iii) which remains open for a minimum of 60 days.

The Board has determined to defer the “Separation Time” for rights under the rights plan in connection with Qwave’s partial offer to a later date to be determined by subsequent decision of the Board.

The issuance of common shares upon exercise of the rights is subject to receipt of certain regulatory approvals, including from the TSX Venture Exchange. The rights plan will take effect immediately and will be subject to confirmation by the Company’s shareholders at its next shareholder meeting. The rights plan will terminate at the earlier of the close of the meeting at which it is not confirmed by the Company’s shareholders and the date that is six months after the date hereof.

IOU Financial Responds to Qwave Announcement of Intention to Make an Unsolicited Partial Bid

MONTREAL, June 15, 2015 /CNW Telbec/ – IOU FINANCIAL INC. (“IOU Financial” or the “Company”) (TSXV: IOU), a leading online lender to small businesses, notes the announcement by Qwave Capital LLC (“Qwave”) of its intention to make a formal offer to acquire 30,000,000 outstanding common shares of IOU Financial, representing approximately 55.9% of the outstanding common shares of IOU Financial, for $0.50 per common share.

IOU Financial wishes to highlight that the announcement made by Qwave does not constitute a formal offer to acquire the common shares of IOU Financial but is merely the announcement of an intention to carry out an unsolicited partial bid. There is no assurance that a formal offer will be made by Qwave.

The Board of IOU Financial continues to believe in IOU Financial’s current business plan, which has allowed IOU Financial to rank as the 32nd fastest growing company in Canada on the 2014 PROFIT 500 list, with a five-year revenue growth of 1,924%. This being said, the Board will continue to evaluate opportunities, given the dynamic nature of IOU Financial’s industry, and remains committed to creating significant value for shareholders.

If and when a formal offer is made by Qwave, the Board will further communicate its views to shareholders of IOU Financial by issuing a news release and filing and mailing a circular to them within the statutory time period. In the interim, the Board advises shareholders not to take any action with respect to Qwave’s unsolicited partial bid until the Board and its advisors have evaluated same and the Company’s other alternatives, and the Company has made a statement with respect thereto.

SOURCE IOU FINANCIAL INC.

For further information: Philippe Marleau, Chief Executive Officer, (514) 789-0694 ext. 225