IOU Determines that the NMEF Proposal does not Constitute a Superior Proposal and Re-Affirms its Unanimous Recommendation that Shareholders Vote FOR the Arrangement

MONTREAL, Aug. 9, 2023 /PRNewswire/ - IOU Financial Inc. ("IOU" or the "Company") (TSXV: IOU) announces that it has delivered a notice to North Mill Equipment Finance LLC ("NMEF") advising NMEF of its determination that the non-binding, indicative unsolicited proposal (the "NMEF Proposal") received from NMEF to acquire all of the outstanding common shares of IOU ("Shares") at a price of $0.28 in cash for each Share does not constitute a "Superior Proposal" under the Arrangement Agreement entered into between IOU and 9494-3677 Québec Inc. (the "Purchaser") on July 13, 2023 (the "Arrangement Agreement") and therefore does not provide a basis upon which to enter into discussions with NMEF. That determination follows a comprehensive review of the NMEF Proposal by the special committee (the "Special Committee") of the board of directors of IOU (the "Board") and the Board, with the benefit of advice of their legal counsel and financial advisor.

The Special Committee and the Board (with Philippe Marleau, Lucas Timberlake and Robert Gloer abstaining from deliberations and voting) arrived at this determination, among other reasons, on the basis of the written confirmation provided to them by the Purchaser and its affiliates, who own, control, direct or have subject to a hard lock-up more than 48% of the issued and outstanding Shares (on a non-diluted basis), that they would not vote (or permit to be voted) any such Shares in favour of the NMEF Proposal. To be successfully consummated, the NMEF Proposal would need, among other things, to gather the support of more than two-thirds of the holders of Shares (the "Shareholders"), which would not be possible in the present circumstances without the support of the Purchaser and its affiliates. Despite having been given an opportunity, in writing and orally, to clarify how it intended to overcome the Purchaser's opposition to the NMEF Proposal, NMEF did not propose any satisfactory course of action pursuant to which the NMEF Proposal could reasonably be expected to be consummated.

The Board therefore reaffirms its unanimous approval and recommendation (with Philippe Marleau, Lucas Timberlake and Robert Gloer abstaining from deliberations and voting) that the Shareholders vote for the plan of arrangement contemplated by the Arrangement Agreement (the "Arrangement") and confirms that IOU will continue with the process set forth in the Arrangement Agreement, including holding a special meeting of the Shareholders called for September 12, 2023 for the purpose of considering and voting on the Arrangement. For more information on the Arrangement Agreement, please see IOU's press release of July 14, 2023.

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 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-V under the symbol "IOU", and on the US OTC markets as "IOUFF". To learn more about IOU's corporate history, financial products, or to join our broker network please visit www.IOUFinancial.com.

Certain statements made in this press release are forward-looking statements within the meaning of applicable securities laws, including, but not limited to, statements with respect to the completion of the Arrangement and the outcome of the NMEF Proposal, and other statements that are not material 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 parties will receive, in a timely manner and on satisfactory terms, the necessary court, shareholder and U.S. State regulatory 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) the possibility of litigation relating to the Arrangement; and (c) the potential of a third party, including, but not limited to, NMEF, making a "Superior Proposal" to the Arrangement; and (d) other factors beyond the Company's 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.

SOURCE IOU Financial Inc.

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