IOU Financial Announces Intention to Repurchase up to $2 Million of Convertible Debentures
IOU Financial Inc. announced plans to repurchase up to $2 million of its convertible debentures at a discount. This initiative, part of its Pandemic Resilience Plan, aims to strengthen the company’s financial position as it supports small businesses' recovery. In March 2021, IOU reported a record loan origination of US$12.1 million and maintained a cash position of $11.5 million. If completed, the repurchase could save IOU approximately $500,000 in interest expenses.
- Planned repurchase of $2 million in convertible debentures may strengthen financial position.
- Record loan originations of $12.1 million in March 2021 show strong demand.
- Current cash position of $11.5 million provides liquidity for operations.
- Potential $500,000 savings in interest expenses enhances overall profitability.
- None.
MONTREAL, April 8, 2021 /PRNewswire/ - IOU FINANCIAL INC. ("IOU" or "the Company") (TSXV: IOU), a leading online lender to small businesses (IOUFinancial.com), announced today that it intends to repurchase up to
"IOU's response to the COVID-19 pandemic in 2020 ("Pandemic Resilience Plan") put the Company in a position of strength to consolidate its stake in developing the opportunities ahead. We are proud to be able to stand with our network of brokers and small business owners as we prepare for the economic recovery with great optimism" said Phil Marleau, CEO.
The move to repurchase corporate debt comes after a year of strategic initiatives as part of IOU's Pandemic Resilience Plan that focussed on reducing corporate expenses while reaffirming commitments from its diverse portfolio of funding sources and capitalizing on new opportunities to continue to support small businesses in 2020:
- April 3, 2020: IOU Announces Cost Reduction Initiatives due to the COVID-19 Pandemic
- August 4, 2020: IOU Financial Inc. Announces Debenture Holder Approval of Amendments to Convertible Debentures
- November 4, 2020: IOU Financial Announces Loan Purchase Agreement with Neuberger Berman Fund, Private Placement and Appointment of New Director
- December 3, 2020: IOU Financial Announces the Closing of its Private Placement for Total Gross Proceeds of Approximately
$2.1 Million and Provides Corporate Update
IOU Financial continued to fund small businesses in the US throughout the pandemic, relying on its proprietary IOU360 technology platform and wealth of underwriting data to make adjustments in real time as the pandemic evolved.
During the month of March 2021, IOU's loan originations exceeded US
"We adapted to extreme challenges to continue delivering the same level of service that our stakeholders have come to expect, and I thank them for their confidence in IOU as we support the recovery of small businesses across the US" said Robert Gloer, President.
IOU will seek to repurchase such Debentures pursuant to repurchase agreements to be entered into with individual holders of Debentures and to close the Repurchases by no later than June 30, 2021. There can be no assurances that any Debentures will be so repurchased, that all Debentures that an individual holder wishes to be repurchased will so be, or that the Repurchases will be completed by such date. The total reduction in interest expenses to IOU, should the Repurchases be completed, will amount to approximately
Individual holders of the Debentures who are interested in participating in the Repurchases are invited to contact Benjamin Yi (byi@ioufinancial.com) or David Kennedy (dkennedy@ioufinancial.com) indicating their interest.
About IOU Financial Inc.
IOU Financial Inc. 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 a proprietary technology platform that connects underwriters, merchants and brokers in real time, IOU Financial has become a trusted alternative to banks by underwriting over US
Forward Looking Statements
Certain information set forth in this news release may contain forward-looking statements. Forward looking statements are statements, other than statements of historical fact, that address or discuss activities, events or developments that IOU expects or anticipates may occur in the future. These forward looking statements can be identified by the use of words and phrases such as "anticipates", "believes", "estimates", "expects", "may", "plans", "projects", "should", "will", "intends", "seeks", "allows", "creates a path for", "puts in a position to" or the negative thereof or other variations thereon. In particular, this news release contains forward-looking statements including, without limitation, with respect to the closing of the Offering and the Company's future profitability. These forward-looking statements are subject to and involve substantial known and unknown risks and uncertainties, certain of which are beyond the control of IOU, 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 obtaining of the regulatory approval relating to the Offering, the uncertainty of obtaining additional financing, risks related to the Company's incapacity to execute on its business plan, dependence on third-party service providers, competition, dependence on key personnel, security and confidentiality risk, technological development risk, IT disruptions, maintenance of client relationships, and litigation risk. No assurance can be given that any of the events anticipated by such statements will occur or, if they do occur, what benefit IOU will derive from them. 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 does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events, or otherwise. Additional information concerning these and other factors can be found beginning on page 22 under the heading "Risks and Uncertainties" in IOU's management's discussion and analysis dated November 23, 2020, which is available under IOU's profile on SEDAR at www.sedar.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.
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SOURCE IOU Financial Inc.
FAQ
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