MONTREAL, Jan. 8, 2014 /CNW Telbec/ - IOU Financial Inc. ("IOU Financial") (CNSX: IOU) is pleased to announce that it has entered into an
agreement with Palos Management Inc. and the Palos/IOU High Yield Fund
(the "Fund"), a fund managed by Palos Management Inc., whereby its wholly-owned US
subsidiary, IOU Central Inc., will have the opportunity, but not the
obligation, to sell to the Fund, and the Fund will have the
opportunity, but not the obligation, to purchase, up to US$7.5 million
aggregate principal amount of loans originated, over the course of the
next twelve months.
This transaction may be considered a related party transaction within
the meaning of Regulation 61-101 respecting Protection of Minority Security Holders in Special
Transactions ("61-101") since Philippe Marleau, Chief Executive Officer and a director of IOU
Financial, is a shareholder in a company that has control over more
than 10% of IOU Financial's common shares and which controls,
indirectly, Palos Management Inc. However, this transaction is exempt
from the valuation and minority approval requirements provided under
such regulation since IOU Financial, as a CNSX-listed issuer, is not
listed on "specified markets", as defined under 61-101, and the fair
market value of the transaction represents not more than 25% of IOU
Financial's market capitalization.
The Board of Directors of IOU Financial has unanimously approved the
transaction. Philippe Marleau declared his interest prior to the
approval by the Board of Directors of IOU Financial and abstained from
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.
The transaction is still subject to due diligence by Palos Management
and there can be no assurances that it will be completed. 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.
The CNSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this release.
SOURCE: IOU FINANCIAL INC.
For further information:
Chief Executive Officer
(514) 789-0694 ext. 225
Chief Financial Officer
(514) 789-0694 ext. 298