IOU Financial Inc. announces the completion of the acquisition of IOU Central Inc. and related transactions

MONTREAL, Feb. 28 /CNW Telbec/ - IOU Financial Inc. (formerly MCO Capital Inc.) ("IOU Financial") (CNSX: IOU) is pleased to announce that it closed on February 28, 2011 the acquisition of all of the issued and outstanding shares of IOU Central Inc. ("IOU Central"), a private corporation existing under the laws of Canada and its subsidiary IOU Central Inc. ("IOU USA"), a private corporation existing under the laws of Delaware (other than the shares of IOU USA already held by IOU Central) (the "Acquisition"). Pursuant to a share exchange agreement, IOU Financial issued Class B common shares ("Class B Shares") as consideration on the basis of 63 Class B Shares for each IOU Central share and 3.25 Class B Shares for each IOU USA share. The Acquisition was effected by means of a reverse takeover. As a result of the Acquisition, IOU Central and IOU USA became wholly-owned subsidiaries of IOU Financial.

In connection with the completion of the reverse takeover, IOU Financial effected a share consolidation on the basis of one post-consolidated Class B Share for every four pre-consolidated Class B Shares, and changed its name from "MCO Capital Inc." to "IOU Financial Inc.".

Class B Shares for Debt Exchange

Following the Acquisition, IOU Financial also completed Class B Shares for debt exchanges with related parties and consultants. An aggregate of 582,967 post-consolidated Class B Shares were issued pursuant to Stock Purchase Agreements between the parties as full payment for settling and extinguishing IOU Financial's indebtedness.

Canadian National Stock Exchange ("CNSX") Listing

Approval was obtained to list the Class B Shares on the CNSX under the symbol "IOU".  The Class B Shares shall be delisted from the NEX division of the TSX Venture Exchange.

Conversion of Convertible Demand Promissory Notes (the "Notes")

IOU Financial also issued to Palos Merchant Bank L.P. (formerly known as Palos Capital Pool L.P.) ("Palos"), 347,938 Class B Shares and paid to Palos a cash fee equal to 33.33% of the principal and accrued interest in respect of the Notes (the "Cash Fee"). The Notes, as amended, initially issued to Palos by IOU Central in 2009, 2010 and 2011, were convertible into Class B Shares and subject to the payment of the Cash Fee upon request by the holder.

Second Tranche of Private Placement

IOU Financial expects to proceed by March 31, 2011 with the second tranche of the previously announced private placement of Units in order to raise up to $3.5 million. Each unit is comprised of  one Class B Share and one warrant to purchase a Class B Share for an exercise price of $0.50 for a one-year period.

About IOU Financial

IOU Financial, through its subsidiaries IOU Central and IOU USA, operates an Internet-based lending platform aimed at small businesses throughout the United States that IOU Financial believes are under served by banks today.  IOU Financial allows these businesses to obtain loans (up to $100,000) without having to turn to more expensive factoring type products.  To learn more visit:

Forward Looking Statements

Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of IOU Financial including, but not limited to, the impact of general economic conditions, industry conditions, dependence upon regulatory and shareholder approvals, the execution of definitive documentation and the uncertainty of obtaining additional financing. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. IOU Financial does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events, or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. The CNSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

For further information:
IOU Financial Inc.
Philippe Marleau
President & CEO
Tel. : 514-789-0694
Email :
Mailing Address

IOU Financial Inc.
600 TownPark Lane
Suite 100
Kennesaw, GA 30144

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