IOU Financial announces the closing of its private placement of convertible debentures for gross proceeds of $9,208,000


MONTRÉAL, Nov. 2, 2015 /CNW Telbec/ - IOU Financial Inc. (TSX Venture Exchange: IOU) ("IOU Financial" or the "Company"), a leading online lender to small businesses, is pleased to announce that it has closed its previously announced private placement of 10% convertible unsecured subordinated debentures (the "Debentures") for gross proceeds of $9,208,000 (the "Offering").

The Offering consisted of a brokered private placement on a "best efforts" agency basis for an aggregate of $9,208,000 in principal amount of Debentures, at a price of $1,000 per Debenture, through Palos Management Inc. (the "Agent").

The Debentures will mature on December 31, 2020, will bear interest at a rate of 10% per annum, payable monthly and commencing on November 30, 2015, and will be convertible at their holders' option into common shares of IOU Financial ("Common Shares") at a price of $0.75 per Common Share (the "Conversion Price"), representing a conversion rate of 1,333.33 Common Shares for each $1,000 principal amount of Debentures. The Company will have the right to force the conversion of the Debentures into Common Shares at any time on or after December 31, 2018 should the 20-day volume weighted average price of the Common Shares on the TSX Venture Exchange (the "TSX-V") exceed 125% of the Conversion Price.

The net proceeds of the Offering will be used primarily by IOU Financial to finance small business loans in the Company's target markets and for general corporate purposes. The Offering is subject to final approval of the TSX-V. The Agent has the option, exercisable in whole or in part until November 24, 2015 (subject to any extension that may be granted by the TSX-V), to sell up to an additional $1,500,000 in principal amount of Debentures. The Company anticipates that a subsequent closing will occur on or about November 20, 2015.

In connection with the Offering, the Company paid the Agent a cash commission of $230,200 representing 2.5% of the total gross proceeds of the Offering, and paid sub-agents an additional cash commission of an aggregate of $23,250 representing 2.5% of the gross proceeds raised by each of them.

Pursuant to applicable securities laws, all securities issued pursuant to the Offering are subject to a hold period of four months plus one day following the closing of the Offering. The Debentures will not be listed or posted for trading on the TSX-V.

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:

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 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.



For further information: Philippe Marleau, Chief Executive Officer, (514) 789-0694 ext. 225; Mayco Quiroz, Chief Financial Officer, (514) 789-0694 ext. 298
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IOU Financial Inc.
600 TownPark Lane
Suite 100
Kennesaw, GA 30144

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