The Mint Corporation

The Mint Corporation

April 23, 2014 06:56 ET

Mint Announces Corporate Update

TORONTO, ONTARIO--(Marketwired - April 23, 2014) -


The Mint Corporation (TSX VENTURE:MIT) ("Mint" or the "Company") announces the following:

Mint North America

The company has taken significant steps to restructure the North American operations, starting with closing down the Pennsylvania office and negotiating with creditors in North America to come to settlements of the amounts owed to them. Operations have been consolidated to the Greater Toronto Area. The company continues to look for further cost saving opportunities.

Mint Operations UAE

The Company continues to restructure its UAE operations. The company has reduced staffing levels significantly and consolidated operating offices into one location. In addition, the company is also looking to enhance the technology to offer product and services in a more cost effective manner.

Special Shareholders Meeting

The Company has called a special meeting of shareholders for May 1, 2014 to consider (a) a special resolution approving a change of name for the Company to such name as the board of directors may determine, (b) a special resolution approving a change of the municipality of the Company's head office from Toronto to Oakville, and (c) a resolution of disinterested shareholders approving Gravitas Financial Inc. ("Gravitas") as a new Control Person (as that term is defined in the TSX Venture Exchange policies).

Gravitas loaned $1,500,000 to Mint in November 2013 under a loan agreement which permits the conversion of that principal amount to common shares at a price of $0.05 per share during the period ending November 25, 2015 and thereafter at $0.10 per share during the period ending November 25, 2015. In March, 2014, Mint agreed that additional loans of $1,121,920 made in January 2014 would be convertible at $0.055 during the period ending November 25, 2014 and thereafter at $0.10 during the period ending November 25, 2015. That additional loan is subject to a hold period expiring on August 1, 2014. The loans bear interest at 12% per annum and Gravitas may elect to receive payments of interest in common shares at the lowest price permitted at the time of conversion and subject to stock exchange approval. Mint may borrow up to an additional $378,080 under the loan facility, subject to agreement by Gravitas. Any additional borrowing would be on the same terms except that the conversion price would be the lowest price permitted at the time of conversion and subject to stock exchange approval. Gravitas has agreed not to exercise its conversion right so as to own more than 50.1% of the outstanding common shares until the earlier of May 22, 2015 and the occurrence of an event of default under the loan agreement. Having regard to this restriction and the change in the conversion price after November 25, 2014, Gravitas could acquire up to 39,738,062 common shares (representing 60% of the common shares) upon conversion of the principal amount. Mint has agreed that Gravitas may nominate a director on Mint's board of directors but Gravitas has not yet exercised that right. Gravitas also has a pre-emptive right to participate in future issuances of common shares while its loan is outstanding. Under TSX Venture Exchange policies, Mint must obtain shareholder approval before Gravitas may increase its ownership of Mint common shares above 20% (thereby becoming a Control Person under the policies of the stock exchange). If Mint fails to obtain disinterested shareholder approval of Gravitas as a Control Person by July 31, 2014, that will constitute an event of default under the Gravitas loans. Shareholders holding approximately 26% of Mint's common shares have entered into voting agreements to support the resolution to approve Gravitas as a new Control Person.

Financing and Other Matters

The Company continues to work toward a target escrow release date of the middle of May. Over the coming weeks, the company and the agent will be reviewing the escrow release conditions.

The Company has been named a co-defendant in a statement of claim issued by investors in Mint's debentures and common shares and claiming, among other things, damages of $920,000 plus punitive damages. Investors in a second action commenced by the same law firm are seeking to add the Company as a defendant in a statement of claim also issued by investors in Mint's debentures and common shares and claiming, among other things, damages of $1,000,000 plus punitive damages. The plaintiffs claim that these investments were unsuitable for them and that their investment advisor should not have made these investments on their behalf. The investors also claim that they were unaware of commissions paid to their advisor and that Mint had a duty to inform them. The Company has appointed a special committee to investigate and respond to the allegations made in the statement of claim and will vigorously defend its interest.

The Company has borrowed approximately $1.5 million from Gravitas under a demand facility which contemplates that the Company may borrow up to $1,750,000. In each case, advances under the facility require the consent of Gravitas. The loan bears interest at 18% per annum and is secured by a security interest in the assets of the Company. The loan is to be paid out of the proceeds from the release of funds to the Company upon conversion of the subscription receipts described in the Company's press release of January 3, 2014, unless earlier payment is demanded by Gravitas.

A more fulsome update on the business will be contained in the Management Discussion and Analysis which should be released shortly.


Investors are encouraged to read the Management Discussion and Analysis Documents filed on SEDAR for a description of additional risks associated with investing in the Company. The following statement is only intended to inform investors on certain of the many risks associated with investing in the Company. The Company operates predominantly in the Middle East and North Africa ("MENA"). It is accordingly exposed to significant political, legal and regulatory risks associated with operating in these emerging and volatile markets. The key management personnel and operations of the Company are based in countries which do not have strong and reliable judicial enforcement. This results directly in additional risk with respect to the enforcement of legal and contractual rights, including, for example but without limitation, the enforcement of the rights of creditors, the protection of intellectual property rights, the enforcement of joint venture arrangements, and binding key employees with non-compete agreements. Since inception, the Company has not reached profitability. The Company relies heavily on high-cost, debt financing to fund its business plan. This has exposed the Company to unique financial risks associated with significantly higher than normal debt levels. Investors in the company are strongly encouraged to be aware of the significant risks of the company, to conduct additional due diligence and to seek the help of a licensed investment advisor before considering to invest in securities of the Company. Moreover, investors must be aware that the purchase of the Company's securities involves a number of additional significant risks and uncertainties, as disclosed in the Management Discussion and Analysis reports filed on SEDAR by the Company. Investors considering purchasing securities of the Company should be able to bear the economic risk of total loss of such investment.


Established in 2004, Mint is the world's first vertically integrated prepaid card and payroll services provider with its own ATM network, payment processing platform and proprietary branded card product delivered to workers in the United Arab Emirates and expanding to other parts of the Middle East. Mint operates through 4 subsidiaries, Mint Middle East LLC, a payroll card services provider; Mint Capital LLC, a financial products distribution company; Mint Global Processing Inc., a fully integrated third party processing platform; and MEPS, a mobile airtime POS and Merchant network solutions business.


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