MONTREAL, Feb. 18 /CNW Telbec/ - MCO Capital Inc. ("MCO") (NEX: MCO.H) is pleased to announce that it closed on February 16,
2011 the first tranche of its $5 million private placement of class B
shares (the "Class B Shares") and warrants to purchase Class B Shares at an exercise price of
$0.125 for a one-year term (the "Warrants", and together with the Class B Shares, collectively the "Units") for total gross proceeds of approximately $1.45 million. The Units
were offered to investors at a price of $0.10 per Unit. MCO thus
satisfied the minimun working capital condition, which was one of the
conditions set out by the Canadian National Stock Exchange (the "CNSX") for its listing of MCO following the completion of its previously
announced reverse take-over (the "RTO") of IOU Central Inc. ("IOU Central"), a private corporation existing under the laws of Canada and its
subsidiary IOU Central Inc. (Delaware) ("IOU USA"), a private corporation existing under the laws of Delaware. HDL
Capital Corporation ("HDL"), a Toronto based Exempt Market Dealer, was Lead Agent on the
transaction, and will also be acting as Lead Agent with regards to the
balance of the $5 million placement.
Second Tranche of Private Placement
IOU Financial Inc. ("IOU Financial"), as MCO shall be renamed following the RTO, intends to carry out the
second tranche of the private placement by March 31, 2011 in order to
raise up to $3.5 million. Giving effect to the four-for-one share consolidation of
the Class B Shares of MCO which shall be implemented as part of the
RTO, the second tranche offering shall consist of class B shares of IOU
Financial (the "IOU Class B Shares") and warrants to purchase IOU Class B Shares at an exercise price of
$0.50 for a one-year term (the "IOU Warrants", and together with the IOU Class B Shares, collectively the "IOU Units") at a price of $0.40 per IOU Unit.
Pursuant to the terms of a Share Exchange Agreement entered into between
MCO, IOU Central, IOU USA, and the shareholders of IOU Central and IOU
USA, MCO agreed to acquire from the shareholders of IOU Central and IOU
USA all of the issued and outstanding shares of IOU Central and IOU
USA (other than the shares of IOU USA already held by IOU Central), on
the basis of 63 Class B Shares of MCO for each IOU Central share and
3.25 Class B Shares for each IOU USA share. Based on the closing price
of MCO's Class B shares on the NEX of $0.10 on June 30, 2009, the
exchange ratio implies a value for each IOU Central Share of $6.30 and
for each IOU USA Share of $0.325.
Completion of the RTO is subject to certain conditions, including
receipt of the necessary regulatory approvals of the CNSX.
The RTO is expected to be completed in the first quarter of 2011.
Investors are cautioned that, except as disclosed in the management
information circular of MCO dated November 24, 2010, any information
released or received with respect to the RTO may not be accurate or
complete and should not be relied upon. Trading in the securities of
MCO should be considered highly speculative.
There can be no assurances that the RTO will be completed within the
delays contemplated, or that it will be completed at all.
About IOU Central
IOU Central, via its subsidiary, IOU USA, operates an Internet-based
lending platform aimed at small businesses throughout the United States
that are under served by banks today. IOU Central 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
The business of MCO is to identify and evaluate business assets with a
view to a potential acquisition. MCO shares are presently listed on the
NEX division of the TSX Venture Exchange and MCO has not had any commercial activities over the past 7 years. MCO
was previously known as Matco Ravary.
About HDL Capital
Founded in 1993, HDL is a Toronto based boutique investment bank and
Exempt Market Dealer that completes private/public financings and M&A
transactions for middle market companies across a range of industries
in the Restaurant/Hospitality, Manufacturing, Technology,
Mining/Resources, Marketing Services and Financial Services sectors.
Visit www.hdlcapital.com for more information.
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 MCO, IOU Central and IOU USA, 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. MCO 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.
SOURCE MCO CAPITAL INC.
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