IOU Financial Announces New Director and Reports on AGM Results and on Grant of Stock Options

MONTREAL, June 20, 2017 /CNW Telbec/ - IOU Financial Inc. (TSXV: IOU) ("IOU Financial" or the "Company") today reported the results of its Annual General and Special Meeting of Shareholders held on this date (the "Meeting").

At the Meeting, shareholders approved the appointment of all directors proposed for election, which comprised the existing slate of directors other than Jason Cawley, who chose not to stand for re-election for personal reasons and who was replaced by Wayne Pommen. Shareholders also approved the reappointment of PricewaterhouseCoopers LLP as the Company's auditors as well as the Company's rolling Stock Option Plan.

Wayne Pommen is President and CEO of Health Smart Financial Services. Mr. Pommen is currently a director and the Chairman of the Audit Committee of Hudson's Bay Company. Previously, Mr. Pommen was a Principal at TorQuest Partners, one of Canada's leading private equity firms, and a management consultant with Bain & Company in the United Kingdom, the United States, and Canada. Mr. Pommen also served as a strategy director at BPP Holdings plc, a publicly listed provider of professional education in the United Kingdom and Europe. Mr. Pommen holds a Ph.D. from the University of Cambridge and an A.B. from Harvard University. Mr. Pommen has also completed the Directors Education Program of the Institute of Corporate Directors and has received his ICD.D designation.

In acknowledging Jason Cawley's contribution to IOU Financial, Evan Price, Chairman of the Board of Directors, stated "We thank Jason Cawley for his valuable services to the Board of Directors. We wish him much success in his future endeavours."

Grant of Stock Options

On this date, the Company granted options entitling directors, officers, employees and consultants to acquire up to an aggregate of 2,058,000 Common Shares of the Corporation ("Common Shares"); these options have an exercise price of $0.27 and a term of five years from the date of grant with one-third (1/3) vesting immediately and one-third (1/3) vesting on each of the first and second anniversaries of the date of grant.

The Company also granted options to Paradox Public Relations Inc. ("Paradox"), its strategic investor relations consultants, entitling Paradox to acquire 150,000 Common Shares at an exercise price of $0.27; these options have a term of two years and shall vest over a period of 12 months, at a rate of 25% at the end of each three-month period.

Other Corporate Update

At the request of the TSX Venture Exchange, IOU Financial wishes to confirm that, in connection with its recently closed private placement of 17,372,400 Common Shares, Fintech Ventures Fund LLLP ("Fintech"), an entity controlled by Mr. Serguei Kouzmine, a director of the Company, subscribed for 7,500,000 Common Shares for gross proceeds of approximately $1.5 million on a non-brokered basis. Other insiders of IOU Financial, namely Mr. Evan Price, director, Mr. Robert Gloer and Ms. Madeline A. Wade, officers of IOU Central Inc., a wholly-owned subsidiary of the Corporation, and Palos Merchant Fund LP ("Palos"), a fund managed by its General Partner, Palos Management, which in turn is owned by Palos Capital Corporation, which is under the influence of The Marleau Capital Corporation, a corporation of which Mr. Philippe Marleau, the President and Chief Executive Officer of IOU Financial, is a shareholder, also participated in the brokered portion of the private placement. Mr. Price subscribed for a total of 50,000 Common Shares for total gross proceeds of $10,000, Mr. Gloer subscribed for a total of 50,000 Common Shares for total gross proceeds of $10,000, Ms. Wade subscribed for a total of 34,000 Common Shares for total gross proceeds of $6,800, and Palos subscribed for a total of 250,000 Common Shares for total gross proceeds of $50,000.

The private placement may be considered a related party transaction within the meaning of Multilateral Instrument 61-101 ? Protection of Minority Security Holders 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 subscriptions by Fintech, Mr. Price, Ms. Wade, Mr. Gloer, and Palos (together, the "Insiders") is less than 25% of the market capitalization of IOU Financial. The Board of Directors of IOU Financial has approved the terms of the private placement. The relevant Insiders declared their interest prior to the approval by the Board of Directors of IOU Financial and, where applicable, abstained from voting thereon.

In addition, IOU Financial also confirms that it paid Haywood Securities Inc. $90,575 in cash and issued non-transferable compensation options to purchase 479,125 Common Shares at a price of $0.20 for a 24-month period after closing of the brokered portion of the private placement. In connection with subscriptions in the private placement made by certain arm's length third party subscribers in the non-brokered portion thereof, it also paid to Leede Jones Gable Inc. a finder's fee amounting to $46,500 in cash.

About IOU Financial Inc.

IOU Financial provides small businesses throughout the U.S. and Canada 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 US$150,000 to qualified U.S. applicants ($100,000 in Canada) 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: www.ioufinancial.com.

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.

SOURCE IOU Financial Inc.