IOU IOU Financial Inc

Meeting to be held on September 12, 2023 in Virtual-Only Format

MONTREAL, Aug. 10, 2023 /CNW/ - IOU Financial Inc. (TSXV: IOU) ("IOU" or the "Company") today announced that the Superior Court of Québec (the "Court") has issued an interim order (the "Interim Order") authorizing, among other things, the holding of a special meeting (the "Meeting") of shareholders of IOU ("Shareholders") on September 12, 2023. At the Meeting, Shareholders will be asked to consider and, if deemed advisable, to adopt a special resolution (the "Arrangement Resolution") approving the previously-announced plan of arrangement under the Business Corporations Act (Québec) (the "Arrangement") pursuant to which 9494-3677 Québec Inc. (the "Purchaser"), a corporation created by a group composed of (i) funds managed by Neuberger Berman ("Neuberger Berman"), (ii) funds managed by Palos Capital, including Palos IOU Inc. ("Palos IOU" and, collectively with Palos Capital, "Palos"), and (iii) Fintech Ventures Fund, LLLP ("FinTech"), will acquire all of the issued and outstanding common shares of IOU (the "Shares") other than certain Shares (the "Rolling Shares") to be re-invested by Neuberger Berman, Palos, FinTech and certain members of management of IOU (collectively, the "Rolling Shareholders"), for a purchase price of $0.22 in cash per Share (the "Consideration").

Pursuant to the Interim Order, the Meeting will be held on September 12, 2023 at 11:00 a.m. (Montréal time). Shareholders of record as of the close of business on August 8, 2023 will be entitled to receive notice of, to participate in, and to vote at the Meeting. IOU expects to begin the distribution and mailing of its management information circular and related meeting materials on or about August 16, 2023, at which time they will also be available on IOU's profile on SEDAR+ at www.sedarplus.ca and on IOU's website at www.ioufinancial.com.

To provide Shareholders with an equal opportunity to attend and participate at the Meeting, regardless of their geographic location or the particular constraints or circumstances that they may face, the Meeting will be held in a virtual-only format conducted by live videoconference at https://web.lumiagm.com/412704157, the password being "iou2023" (case sensitive). Online access to the Meeting will begin at 10:30 a.m. (Montréal time) on September 12, 2023. Details on the virtual Special Meeting and how Shareholders can access the Meeting will be set out in the circular.

The Board of Directors of IOU (the "Board"), based in part on the unanimous recommendation of an independent committee of the Board (the "Special Committee") and after receiving legal and financial advice, has unanimously (with (i) Philippe Marleau and Lucas Timberlake abstaining from voting due to their relationships with Palos and FinTech, respectively, and (ii) Robert Gloer abstaining from voting due to his participation in the Arrangement as a Rolling Shareholder) determined that the Arrangement is in the best interests of IOU and is fair to the Shareholders (other than the Rolling Shareholders). The Board of Directors unanimously (with Philippe Marleau, Lucas Timberlake and Robert Gloer abstaining from voting) recommends that the Shareholders (other than the Rolling Shareholders) vote FOR the Arrangement Resolution.

In connection with the Arrangement, the Rolling Shareholders and certain other Shareholders, who hold in aggregate 51,245,948 Shares (or approximately 48.6% of the issued and outstanding Shares (on a non‐diluted basis)), have entered into irrevocable voting support agreements with the Purchaser providing for such Shareholders to support the Arrangement and vote all Shares beneficially owned by them in favour of the Arrangement Resolution. In addition, Evan Price, Jeffrey Turner, Kathleen Miller and Yves Roy, each of whom is a director or officer of the Company holding Shares (in the aggregate, 654,777 Shares), representing in the aggregate approximately 0.6% of the issued and outstanding Shares, have entered into "director & officer" voting support agreements pursuant to which each has agreed to support the Arrangement and vote his or her Shares in favour of the Arrangement Resolution, subject to customary exceptions.

The Board and the Special Committee received from Evans & Evans Inc. (i) an opinion to the effect that, as of the date of such opinion, based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations upon the review undertaken by them in preparing their opinion, the Arrangement is fair, from a financial point of view, to the Shareholders (other than the Rolling Shareholders), and (ii) an independent valuation of the Shares that concludes that the Consideration is above the $0.168 to $0.185 per Share range of the fair market value of the Shares.

To become effective, the Arrangement Resolution must be approved by: (i) not less than two-thirds of the votes cast at the Meeting by Shareholders virtually present or represented by proxy and entitled to vote at the Meeting; and (ii) a simple majority of the votes cast at the Meeting by Shareholders virtually present or represented by proxy and entitled to vote at the Meeting, excluding for this purpose the Rolling Shareholders and related parties thereof and any other person required to be excluded pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. The Arrangement is also subject to other customary closing conditions for a transaction of this nature, including Court approval and certain regulatory approvals. If the necessary approvals are obtained and the other conditions to closing are satisfied or, if applicable, waived, it is anticipated that the Arrangement will be completed in the weeks following the Meeting.

Shareholders of IOU with questions regarding the Meeting or needing assistance with voting  should contact Morrow Sodali, IOU's shareholder communications advisor, at 1888- 444-0617 (toll-free within North America) or at 1-289-695-3075 (outside of North America) or by email at assistance@morrowsodali.com.

IOU is a wholesale lender that provides quick and easy access to growth capital to small businesses through a network of preferred brokers across the US and Canada. Built on its proprietary IOU360 technology platform that connects underwriters, merchants and brokers in real time, IOU has become a trusted alternative to banks by originating over US$1 billion in loans to fund small business growth since 2009. IOU was named one of the 50 Best Places to Work in Fintech for 2022 by American Banker and trades on the TSX Venture Exchange (the "TSX-V") under the symbol "IOU", and on the US OTC markets as "IOUFF". For more information, please visit IOU's website at www.ioufinancial.com.

Neuberger Berman, founded in 1939, is a private, independent, employee-owned investment manager. The firm manages a range of strategies – including equity, fixed income, quantitative and multi-asset class, private equity, real estate and hedge funds – on behalf of institutions, advisors and individual investors globally. Neuberger Berman's investment philosophy is founded on active management, engaged ownership and fundamental research, including industry-leading research into material environmental, social and governance factors. Neuberger Berman is a PRI Leader, a designation awarded to fewer than 1% of investment firms. With offices in 26 countries, the firm's diverse team has over 2,750 professionals. For nine consecutive years, Neuberger Berman has been named first or second in Pensions & Investments Best Places to Work in Money Management survey (among those with 1,000 employees or more). The firm manages $443 billion in client assets as of June 30, 2023. For more information, please visit Neuberger Berman's website at www.nb.com.

Palos Capital, based in Montreal, Québec, is a boutique financial services firm that primarily operates through two subsidiaries:  Palos Wealth Management Inc. ("PWM") and Palos Management Inc. ("PMI"). PWM offers wealth management services, including discretionary portfolio management and separately managed account services to individual, corporate and institutional clients. PMI is an independent, investment fund manager and portfolio manager.  Palos IOU is a newly formed corporation consisting of certain (i) affiliates of Palos Capital, and (ii) directors and officers of IOU. For more information, please visit Palos' website at www.palos.ca.

Fintech is an early-stage venture capital firm founded in 2015 and headquartered in Atlanta, GA, with offices in New York, NY. The firm focuses exclusively on investing in and partnering with entrepreneurs building promising technology-enabled companies in the banking, capital markets, and lending sectors. The Fintech Ventures team has multiple decades of collective operational and investment experience, with numerous successful exits. For more information, please visit www.fintechv.com.

Certain statements contained in this press release may constitute forward-looking information or forward-looking statements (collectively, "forward-looking statements") under the meaning of applicable securities laws, including, but not limited to, statements or implications with respect to the rationale of the Special Committee and the Board for the Arrangement, the expected benefits of the Arrangement, the receipt of  required Shareholder, regulatory and Court approvals in respect of the Arrangement, the timing of various steps to be completed in connection with the Arrangement, and other statements that are not historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking terminology such as "may", "will", "expect", "believe", "estimate", "plan", "could", "should", "would", "outlook", "forecast", "anticipate", "foresee", "continue" or the negative of these terms or variations of them or similar terminology.

Although the Company believes that the forward-looking statements in this press release are based on information and assumptions that are reasonable, including assumptions that the parties will receive, in a timely manner and on satisfactory terms, the necessary Court and Shareholder approvals, and that the parties will otherwise be able to satisfy, in a timely manner, the other conditions to the closing of the Arrangement, these forward-looking statements are by their nature subject to a number of factors that could cause actual results to differ materially from management's expectations and plans as set forth in such forward-looking statements, including, without limitation, the following factors, many of which are beyond the Company's control and the effects of which can be difficult to predict: (a) the possibility that the Arrangement will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, required Shareholder, regulatory and Court approvals and other conditions of closing necessary to complete the Arrangement or for other reasons; (b) risks related to tax matters; (c) the possibility of adverse reactions or changes in business resulting from the announcement or completion of the Arrangement; (d) risks relating to the Company's ability to retain and attract key personnel during the interim period; (e) the possibility of litigation relating to the Arrangement; (f) credit, market, currency, operational, liquidity and funding risks generally and relating specifically to the Arrangement, including changes in economic conditions, interest rates, or tax legislation or lending regulatory requirement; (g) the potential of a third party making a superior proposal to the Arrangement; (h) risks related to diverting management's attention from the Company's ongoing business operations; and (i) other risks inherent to the business carried out by the Company and factors beyond its control which could have a material adverse effect on the Company or its ability to complete the Arrangement.

The Company cautions investors not to rely on the forward-looking statements contained in this press release when making an investment decision in their securities. Investors are encouraged to read the Company's filings available under its profile on SEDAR+ at www.sedarplus.ca for a discussion of these and other risks and uncertainties. The forward-looking statements in this press release speak only as of the date of this press release and IOU undertakes no obligation to update or revise any of these statements, whether as a result of new information, future events or otherwise, except as required by law.

Neither TSX-V nor its Regulation Services Provider (as that term is defined in policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.

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SOURCE IOU Financial Inc.