MONTREAL, QUEBEC--(Marketwire - May 8, 2012) - IOU Financial Inc. (CNSX:IOU) This news release is disseminated pursuant to National Instrument 62-103 The Early Warning System and Related Take Over Bids and Insider Reporting Issues in connection with the filing of an early warning report (the "Early Warning Report") regarding the holdings of Palos Merchant Bank L.P. ("Palos") of common shares and warrants convertible into common shares in the capital of IOU Financial Inc. ("IOU"). Palos advises that it holds directly 1,923,471 common shares of IOU and 1,327,107 warrants convertible into common shares of IOU, representing 10.05% of IOU's issued and outstanding voting shares on a partially diluted basis. The warrants were acquired as a referral fee related to a recent private placement of units of IOU Financial. The position in IOU was acquired for investment purposes and may be increased or decreased in the future as considered appropriate in light of investment criteria, market conditions and other factors and in accordance with the provisions of applicable securities legislation. A copy of the Early Warning Report may be found on www.SEDAR.com. /T/ On behalf of Palos Merchant Bank L.P. 1812-1 Place Ville Marie Montreal, Quebec H3B 4A9 Tel: (514) 397-0188 /T/ Noah Billick, Vice-President, Legal Affairs of Palos Management Inc., sole general partner of Palos Merchant Bank L.P. The Canadian National Stock Exchange (CNSX) has not reviewed and does not accept responsibility for the adequacy or the accuracy of the contents of this release.