/NOT FOR DISTRIBUTION IN THE UNITED STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/
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.
About IOU Financial
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 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 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.
SOURCE IOU FINANCIAL INC.