IOU Board of Directors Continues to Put Insider Interests Ahead of Common Shareholders

MONTREAL, QUEBEC--(Marketwired - July 13, 2015) - Qwave Capital LLC ("Qwave"), a venture capital firm focused on promising technologically advanced companies, today provided the following response to the IOU Financial Inc. ("IOU") Directors' Circular related to Qwave's premium, all-cash offer (the "Offer") to acquire 34,000,000 of the outstanding common shares (the "Common Shares") of IOU for $0.50 per Common Share:

• Insiders first, shareholders second: There is nothing in the IOU Directors' Circular that changes our view that the IOU Board and management have repeatedly put the interests of IOU insiders first and the interests of common IOU shareholders second. In its circular, IOU says it takes its responsibility to shareholders seriously. But the circular ignores the fact that the Board continues to approve transactions that allow Board members and insiders to maintain their dominant interest in IOU, purchase shares for below-market value, and conduct IOU business with related parties that benefit the privately owned entities while IOU continues to lose money.
  
  
• Ineffective capital management, squandered opportunities: IOU recently completed a private placement financing at $0.40 a share, representing a 19% discount to the closing price of IOU shares on June 19, 2015 and a 20% discount to Qwave's Offer. Parties related to IOU management subscribed to approximately 17% of the offering at the discounted offer price. This transaction raises serious questions about who really benefits from IOU management's transactions with related parties, the Board's commitment to creating value for IOU's shareholders, and the Board's and management's suitability to best oversee and run the company.
  
  
• Market has a far different assessment of IOU's value: The pre-Offer share price indicates the market does not agree with IOU's assessment of the company's current value or have confidence in the Board and management's ability to create future value. The IOU share price will likely drop to pre-Offer levels if the Offer is not accepted. Moreover, a better offer is unlikely as IOU's recent private placement was significantly under-subscribed on its original terms and completed at the discounted price of $0.40 a share.
  
  
• Misleading statement in IOU circular: If less than 100 percent of shareholders (including insiders) tender to the Offer, tendering shareholders will have an opportunity to sell significantly more than 55.3% of the shares tendered to the Offer, and potentially 100% of the shares tendered to the Offer. (Incorrect information was provided in IOU's Directors' Circular, which erroneously states that "you will only be able to sell at most 55.3% of your Common Shares.")
  
  
• IOU legal action is costly and unnecessary: By litigating, the IOU Board is wasting funds on an unnecessary lawsuit and standing in the way of its shareholders benefiting from the Qwave Offer, and potentially realizing significant value and immediate liquidity for a substantial portion of shareholdings.
  
  
• Qwave is providing a premium Offer: The all-cash Offer provides immediate value and liquidity for shareholders. It represents a premium of 33.3% over the closing price of the Common Shares on the TSX Venture Exchange ("TSX-V") on June 12, 2015, and a 28.7% premium above the volume weighted average market price of the Common Shares on the TSX-V over the last 20 trading days prior to the announcement of the Offer on June 15, 2015.
  
  
• Qwave is committed to creating value and growing IOU: If we are successful in completing our Offer, we intend to ensure that the IOU Board of Directors is singularly focused on creating value for shareholders and possesses the skills, knowledge and expertise necessary to increase market share and grow the company - profitably.
  
  

Qwave will provide further updates on the IOU litigation and its impact, if any, on the Qwave Offer as developments warrant.

Shareholder Questions

Shareholders may obtain a free copy of the Qwave Offer and take-over bid circular and other documents filed by Qwave with the Canadian securities regulators at www.sedar.com. The Offer and take-over bid circular and other documents may also be obtained for free by contacting the Depositary and Information Agent, Laurel Hill Advisory Group, toll free in North America at 1-877-452-7184, collect outside North America at 416-304-0211, or by email at assistance@laurelhill.com.

About Qwave

Qwave is a venture capital firm focused on promising, technologically advanced companies. Qwave draws upon a management group with more than 20 years of experience and a strong track record of finding and investing in companies with breakthrough technologies and excellent potential for growth and value creation.

ON BEHALF OF QWAVE CAPITAL LLC

Serguei Kouzmine, Manager

Forward-Looking Information

Information and statements contained in this news release that are not historical facts are "forward-looking information" within the meaning of Canadian securities legislation that involves risks and uncertainties. Forward-looking information included herein is made as of the date of this news release and Qwave does not intend, and does not assume any obligation, to update forward-looking information unless required by applicable securities laws. Forward-looking information relates to future events or future performance and reflects management of Qwave's expectations or beliefs regarding future events. In certain cases, forward-looking information can be identified by the use of words such as "plans", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. Examples of forward-looking information in this news release include, but are not limited to, statements with respect to the completion of the Offer; IOU's prospects in the event that the Offer is completed; IOU's prospects in the event that the Offer is not completed; the effect on IOU's share price if the Offer is not completed; Qwave's anticipated actions with respect to IOU if the Offer is completed; the expiry time of the Offer; Qwave's assessment of the effect of the Offer on IOU and the shareholders of IOU; the percentage of Common Shares that will ultimately be taken up and paid for under the Offer on a pro-rata basis, if pro-rata take up is required, and if the Offer is completed; and the timing and prospects for shareholder acceptance of the Offer and the implementation there of. This forward-looking information is based, in part, on assumptions and factors that may change or prove to be incorrect, thus causing actual results, performance or achievements to be materially different from those expressed or implied by forward-looking information. Such factors and assumptions include, but are not limited to: the number of Common Shares validly deposited under, and not withdrawn from, the Offer at the expiry time of the Offer; Qwave's ability to obtain and maintain timely receipt of regulatory approvals including approval of the TSX-V of the Offer and approval of the Autorité des Marchés Financiers of the Offer; and Qwave's ability to take-up and pay for Common Shares under the Offer at the expiry time, which may be prevented by the continued operation of the IOU shareholder rights plan and legal action initiated by IOU.

By its very nature, forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking information. Such factors include, but are not limited to: the need to satisfy regulatory and legal requirements with respect to the Offer; dilution to shareholders from any equity financings; and influence of significant shareholders. Although Qwave has attempted to identify important factors that could cause actual actions, events or results to differ materially from forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated by such forward-looking information. Accordingly, readers should not place undue reliance on forward-looking information.

The TSX-V has neither approved nor disapproved the form or content of this release. Information concerning IOU contained in this news release and has been taken from, or is based upon, publicly available information and records on file with Canadian securities regulatory authorities and other public sources. IOU has not reviewed this news release and has not confirmed the accuracy and completeness of the information in respect of IOU contained herein. Although Qwave has no knowledge that would indicate that any statements contained herein concerning IOU taken from or based on such documents and records are untrue or incomplete, neither Qwave nor its manager Dr. Kouzmine assumes any responsibility for the accuracy or completeness of such information or for any failure of IOU or its directors or officers to disclose events or facts which may have occurred or which may affect the significance or accuracy of any such information but which are unknown to it. The information presented regarding the percentage of Common Shares subject to the Offer is based upon publicly available information and records on file with Canadian securities regulatory authorities.

You may call our Depositary and Information Agent, Laurel Hill Advisory Group, if you have questions or requests for additional copies of the take-over bid circular and other documents filed by Qwave with the Canadian securities regulators. Questions and requests should be directed to the following telephone numbers: