Offering conducted by Palos to fund business loans, corporate purposes
By Devika Patel
Knoxville, Tenn., Dec. 16 – IOU Financial Inc. said it raised C$1 million in the third and final tranche of a C$11.5 million private placement of convertible subordinated debentures. The deal priced for C$10 million on Sept. 25, raised C$9,208,000 on Nov. 2 and raised C$1.29 million on Nov. 20.
The 10% debentures mature on Dec. 31, 2020. Beginning Dec. 31, they are convertible into common stock at a conversion rate of 1,333.33 shares per C$1,000 of debentures, which equals a conversion price of C$0.75. This is a 59.58% premium to C$0.47, the Sept. 24 closing share price.
The company may force conversion after Dec. 31, 2018 if the 20-day volume-weighted average price of its shares exceeds 125% of the conversion price.
The debentures were sold at par of C$1,000 on a best-efforts basis by agent Palos Management Inc.
Proceeds will be used to finance small business loans and for general corporate purposes.
The Montreal company is an online lender for small businesses in the United States.
| Issuer: | IOU Financial Inc.
|
| Issue: | Convertible subordinated debentures
|
| Amount: | C$11.5 million
|
| Maturity: | Dec. 31, 2020
|
| Coupon: | 10%
|
| Price: | Par of C$1,000
|
| Conversion premium: | 59.58%
|
| Conversion price: | C$0.75
|
| Mandatory conversion: | At company’s option after Dec. 31, 2018 if the 20-day volume-weighted average price of its shares exceeds 125% of the conversion price
|
| Warrants: | No
|
| Agent: | Palos Management Inc.
|
| Pricing date: | Sept. 25
|
| Settlement dates: | Nov. 2 (for C$9,208,000), Nov. 20 (for C$1,292,000), Dec. 16 (for C$1 million)
|
| Stock symbol: | TSX Venture: IOU
|
| Stock price: | C$0.47 at close Sept. 24
|
| Market capitalization: | C$39.96 million
|
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