IOU Financial announces the completion of its private placement for gross proceeds of $3,118,000

MONTRÉAL, June 19, 2015 /CNW Telbec/ – IOU Financial Inc. (TSXV: IOU) (“IOU Financial” or the “Company”), a leading online lender to small businesses, is pleased to announce that it closed its previously announced private placement for gross proceeds of $3,118,000.

A syndicate of underwriters (the “Underwriters”) led by Haywood Securities Inc. and including Cormark Securities Inc. completed the Offering of 7,795,000 common shares (the “Common Shares”) at a price of $0.40 per Common Share.

The Company intends to use the net proceeds from the Offering to fund working capital and for general corporate purposes.

Related parties of the Company subscribed for 1,295,000 Common Shares representing approximately 17% of the Offering. The issuance of securities to such related parties may be considered a related party transaction within the meaning of Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions. However, the Offering is exempt from the valuation and minority approval requirements provided under such regulation since the fair market value of the Offering to such persons is less than 25% of the market capitalization of IOU Financial. The Board of Directors of IOU Financial has approved the Offering. Philippe Marleau declared his interest prior to the approval by the Board of Directors of IOU Financial and abstained from voting thereon.

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 the closing of the Offering due to the fact that the Offering was still subject to regulatory approval and the terms of the participation of certain of the non-related parties and the related parties in the Offering were not confirmed.

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.