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: www.ioucentral.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
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.
SOURCE MCO CAPITAL INC.
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