MONTRÉAL, May 15, 2017 /CNW Telbec/ - IOU Financial Inc. ("IOU Financial" or the "Company") (TSX‑V: IOU) is pleased to announce that it closed on the date hereof the non-brokered portion of its previously announced private placement of common shares (the "Common Shares") for total gross proceeds of approximately $2.12 million. The Common Shares were offered to investors at a price of $0.20 per Common Share. Considering the upsizing in the first tranche of the private placement, the total amount expected to be issued under the private placement has been increased by IOU Financial from up to $3.5 million to up to $3.62 million.
An insider of IOU Financial, Mr. Serguei Kouzmine, director, participated in the private placement via FinTech Ventures Fund, LLLP, and subscribed for a total of 7,500,000 Common Shares for total gross proceeds of approximately $1,500,000. The issuance of securities to Mr. Kouzmine may be considered a related party transaction within the meaning of Regulation 61-101 respecting protection of minority securityholders in special transactions. However, the private placement is exempt from the valuation and minority approval requirements provided under such regulation since the fair market value of the private placement to related parties is less than 25 per cent of the market capitalization of IOU Financial. The board of directors of IOU Financial has approved the private placement. Mr. Kouzmine declared his interest prior to the approval by the board of directors of IOU Financial an abstained from voting.
A material change report in respect of this related party transaction could not be filed earlier than 21 days prior to the closing of the private placement due to the fact that the private placement 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 private placement were not confirmed.
This news release shall not constitute an offer to sell nor the solicitation of an offer to buy nor shall there be any securities of IOU Financial offered in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Common Shares will be offered on a private placement basis in Canada and only to "accredited investors", as such term is defined under applicable Canadian securities laws.
THE SECURITIES WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "1933 ACT") AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.
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 approval, 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.
The TSX-V has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
SOURCE IOU Financial Inc.
For further information: Philippe Marleau, Chief Executive Officer, (514) 789-0694 ext. 225; David John Kennedy, Chief Financial Officer, (514) 789-0694 ext. 278